LANDLORD DID NOT DEMONSTRATE TENANT ABANDONED THE LEASED PREMISES AND WAS NOT ENTITLED TO RENT FOR THE PERIODS BEFORE AND AFTER TENANT WAS LOCKED OUT; TENANT WAS ENTITLED TO RECOVER THE VALUE OF THE PERSONAL PROPERTY WHICH REMAINED IN THE LEASED PREMISES AFTER THE LOCKOUT (THIRD DEPT).

The Third Department, reversing the plaintiffs’ verdict in this landlord-tenant dispute, determined plaintiffs did not demonstrate defendants had abandoned the leased premises, a restaurant. Therefore plaintiffs were not entitled to recover rent after defendants were locked out by the plaintiffs, and plaintiffs did not submit sufficient proof of the alleged rent arrears (prior to the lockout). Defendants were entitled to recover on their unjust enrichment counterclaim for the value of the personal property which remained in the restaurant after the lockout:

As relating to commercial premises, “a landlord may avail himself or herself of a lease provision permitting reentry upon breach of conditions as long as he or she reenters peaceably” … . Certain evidence indicating abandonment may include failure to pay bills and rent, surrender of keys and physical relocation of business or personal items previously kept at the subject property … . Contrary conduct found not to demonstrate an intent to abandon a premises includes conduct such as leaving commercial equipment on the premises, paying the utilities, paying lump sum arrears, negotiating the sale of the business that included the leasehold and threatening to call the police on a landlord over a lockout … .

At trial, plaintiffs offered limited evidence of abandonment, namely, that plaintiff Martin P. Patton drove by the restaurant several times in May 2018 or June 2018 and observed it was closed and that defendants were behind on rent, although Patton was not exactly sure what days or what times he drove by or the total amount of rent arrears.  In contrast, Chen [the tenant] testified that, although business was declining, he continued to pay the rent and began to contact potential buyers to take over the restaurant and lease. According to Chen, the restaurant operated the day before the lockout and, when he returned the next day to find the locks changed, he called plaintiffs, who did not respond to him, and then he called the police, who generated an incident report. Defendants entered into evidence several photographs of the premises depicting equipment, furniture, powered-on televisions, liquor bottles on display at the bar and other chattel owned by defendants … . Patton v Modern Asian, Inc., 2022 NY Slip Op 05192, Third Dept 9-15-22

Practice Point: Here the landlord was unable to prove at trial that the tenant had abandoned the leased premises. The landlord was not entitled to rent for the period before and after the tenant was locked out. The tenant was entitled to recover the value of the personal property remaining on the leased premises after the lockout.