PVF Inc. v ZCAM LLC, New York County Supreme Court, Index No. 651360/2013

Justice Charles Ramos has ruled that a landlord’s duty to cooperate in obtaining government approvals includes more than merely executing documents.  In this commercial case brought by a tenant against its landlord, the tenant alleged that the landlord breached the lease by failing to cooperate with the tenant in obtaining a certificate of occupancy.

The parties’ lease provided that the premises was to be used as a restaurant and that the tenant accepted the space “as is” with the knowledge that renovations and approvals from the Department of Buildings and the Landmark’s Preservation Commission would be required.  The tenant contended that the landlord did nothing to remove existing violations of record at the building; most especially, the landlord refused to pay open fines at the building.

When the tenant could not complete its build-out and take occupancy, it sued alleging a number of causes of action, including breach of contract.  New York Commercial Part Justice Charles Ramos ruled that the tenant had stated a viable breach of contract claim and denied the landlord’s motion to dismiss (Justice Ramos dismissed all of the tenant’s other causes of action).  Justice Ramos found that the lease contained an express requirement for the landlord to cooperate with the tenant in obtaining approvals, permits, and licenses that was in addition to the landlord obligation to execute necessary documents.

The lesson of PVF v. ZCAM is that a landlord’s contractual obligation to cooperate in “legalizing” the premises for the tenant’s intended use extends beyond signing the papers the tenant asks.  Cooperation means taking steps to insure that it is possible for the tenant to obtain its permits, approvals, and licenses.