In Mark Hotel LLC v. Madison Seventy-Seventh LLC , when Madison Seventy-Seventh LLC served its tenant, Mark Hotel LLC, with a notice of lease default, the Hotel sought relief from the New York County Supreme Court.
The tenant wanted to convert part of the building into a "cooperative hotel." Although it asked for the landlord's consent to the renovation plan, when the owner twice failed to object, the tenant relied on a lease provision which provided that the landlord's failure to respond comprised a form of consent to the construction.
After the Supreme Court found in the tenant's favor, the landlord appealed to the Appellate Division, First Department, which also didn't think the tenant violated its lease.
While Madison argued the parties' agreement and governing law prohibited the conversion, the Appellate Court, First Department, didn't buy it.The AD1 was of the view the lease unambiguously permitted the premises' use as a "cooperative hotel," and the contemplated change didn't violate the applicable statute.
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To download a copy of the Appellate Division's decision, please use this link: Mark Hotel LLC v. Madison Seventy-Seventh LLC