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Landlord Cannot Recover Lost Rent In Action Based Upon Breach of Covenant to Keep the Premises in Good Repair

Over the dissents of two justices, the First Department determined that lost rent was not recoverable for breach of a lease provision requiring a tenant to keep the premises in good repair:

It is well settled that lost rent is not recoverable as damages for breach of a lease covenant requiring a tenant to keep the premises in good repair. An action alleging breach of such a covenant can be brought either before or after the expiration of the lease term … . In Appleton v Marx (191 NY 81 [1908]), the Court of Appeals identified two different measures of damages, depending on when the action is commenced. If the action is brought before the lease expires, a landlord can recover “the injury done to the reversion” (id. at 83), i.e. “the difference between the value of the premises with the improvement and absent the improvement” … . On the other hand, if the action is brought after the expiration of the lease term, “the measure of the damages is the cost of putting the premises into repair” … . In neither circumstance, however, did the Court of Appeals provide that lost rent is included in the measure of damages.  Building Serv Local 32B-J Pension Fund v 101 Ltd Partnership, 2014 NY Slip Op 01544, 1st Dept 3-11-14

 

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