Holdover Tenants Could Be Held Liable for Trespass

If your lease has expired and you are in the process of negotiating a new lease with a new owner, it’s not uncommon to stay in your space, or holdover until you get the deal finalized. But if you stay in the space and another tenant is waiting to move in, you could be sued. That’s what happened to a tenant in New York City. Tahari Ltd. sublet space in a building in NYC and stayed beyond its sublease expiration date. As a result, the new tenant, Kronish, was unable to move in. After approximately one year, the court ordered Tahari to move out of the space and it appealed the ruling. Tahari los the appeal and after almost two years past the expiration date of its sublease, it moved out of the space. Kronish sued Tahari for trespass and the court ruled that it had an immediate right to possess the space and its right to possess was superior to that of Tahari. In the past, a tenant “holding over” was liable to its owner for premium rent, if specified in the lease and any losses incurred by the owner as a result of the holdover. But after Kronish v. Tahari, a tenant may now also be liable for damages incurred by the incoming tenant if the new tenant would have taken possession before the holdover ended.

Case In Point: Kronish Lieb Weiner & Hellman LLP v. Tahari, Ltd.(2006)