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Can I void a lease with my commercial tenant if he is engaged in an illegal activity?

Brooklyn, NY |

I recently discovered that my NYC commercial tenant has been running a real estate brokerage firm without a real estate broker license. I would like to commence eviction proceedings, but I am concerned that he may retaliate and try to sue me on some other provision on the lease. Ideally, I would like to void the lease completely. Would the fact that they are conducting an illegal business be grounds for voiding the lease? What are my rights in this case?

Attorney Answers 3

Posted

Your rights are governed by the terms of the lease. Presumably, there is a provision in the lease that describes what the premises will be used for by the tenant and contains a warranty by the tenant that it is licensed to transact said business. The lease may provide that the breach of this and other warranties provides grounds for termination of the lease. What protections you have under the lease cannot be determined without reviewing it carefully.

You need to engage an attorney to review the lease and explain your rights and liabilities - especially if you are concerned that the tenant will invent some pretext for counterclaiming against you. You may be stepping on an hornet's nest here and should not take any action against this tenant until you have had your consultation with an attorney.

Good Luck

Answering this question does not create an attorney-client relationship between us. The answer given is for informational purposes only and is not a substitute for contacting an attorney licensed to practice in your jurisdiction and obtaining legal advice from such an attorney.

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Posted

Mr. Greenspan is correct, although I'd suggest that the type of "illegal" activity of which you speak might not rise to the level of rendering your lease voidable. I wonder what reason you actually have for wanting to evict this tenant, as I cannot see how this hurts you, provided he is paying the rent. You might report the illegal brokerage to the Department of State and let them deal with it - but, are you sure that his business is not properly licensed? What are the "other provisions" of the lease under which you fear he may retaliate? I cannot help but wonder if he has already confronted you about something you have done or not done and you're hoping to find a shortcut to get him out without addressing a bigger concern. Please provide more information.

I'm just 3 "helpful" answers away from a free toaster-oven! I may be guessing or not licensed in your state. No atty/client relationship exists.

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Posted

Dear Brooklyn Landlord:

You may also have legal liability for the illegal business conducted by the tenant if you do not go about regaining legal possession from the tenant.

Running an unlicensed real estate office may not rise to the level of the type of unlawful business subject to New York Real Property Law Section 231, where a landlord is allowed to consider a lease void in certain circumstances where the use is for an unlawful business:

">>>1.Whenever the lessee or occupant other than the owner of any building or premises, shall use or occupy the same, or any part thereof, for any illegal trade, manufacture or other business, the lease or agreement for the letting or occupancy of such building or premises, or any part thereof shall thereupon become void, and the landlord of such lessee or occupant may enter upon the premises so let or occupied. 2. The owner of real property, knowingly leasing or giving possession of the same to be used or occupied, wholly or partly, for any unlawful trade, manufacture or business, or knowingly permitting the same to be so used, is liable severally, and also jointly with one or more of the tenants or occupants thereof, for any damage resulting from such unlawful use, occupancy, trade, manufacture or business.>>>"

http://codes.lp.findlaw.com/nycode/RPP/7/231

You may have other remedies beyond the statute involving a judicial declaration of your rights and to rescission of the lease.

Consult with an attorney and learn about the legal options you have to end the tenancy and save your self from liabiity.

The answer provided to you is in the nature of general information. The general proposition being that you should try to avoid a bad outcome if you can.

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