Rosenberg & Estis, P.C. (“R&E”), a premier New York City real estate law firm with an award-winning Litigation Department, on appeal, successfully required Equinox to pay more than $750,000 in back rent and $340,000 monthly going forward for its use and occupancy at Zero Bond Street in Noho. Howard W. Kingsley, a member with the firm, represented the landlord, Bond Immobilien LP.
During the COVID-19 pandemic, the landlord accommodated Equinox’s request to defer the payment of rent on 30,000 square feet of space pursuant to an agreement by which Equinox would not have to pay any rent through the end of August 2020. Starting in September 2020, Equinox was required to pay half of the monthly fixed rent plus additional percentages as the City lifted the capacity restrictions, gradually requiring the tenant to pay 100% of the rent due.
Unfortunately, Equinox reneged by failing to pay the amount due, including the gradual increases, even though the tenant was operating the gym. In August of this year, the landlord filed suit seeking the more than $2.5 million in rent that was deferred and the monthly shortfall. At that time, the landlord also asked Supreme Court to award the landlord interim relief by requiring the tenant to timely pay the full amount of rent due each month because the tenant was using and occupying the space.
Supreme Court rejected the landlord’s motion “out of hand” and would not even permit the landlord to argue its position. Accordingly, the landlord moved the Appellate Division, First Department, to require Equinox to pay “rent/use and occupancy in the amount of (a) $150,000 for the month of August 2021, (b) $300,000 for the months of September and October 2021, and (c) $340,500 on the first day of each month thereafter pendente lite until further order of the Court.” On October 5, 2021, the Appellate Division granted such relief
“The Appellate Division sent a very strong message to commercial tenants that they cannot avoid paying rent while using and occupying the leased space and litigating their defenses,” said Howard W. Kingsley. “Equinox, like many other commercial tenants, continues to assert frivolous impossibility of performance, frustration of purpose and other defenses although they have been routinely rejected by the Courts.”