A restaurant tenant commenced an action against its landlord (owner) for, inter alia, rescission of the parties’ lease and for breach of contract, breach of the implied covenant of good faith and fair dealing, negligent misrepresentation, a declaratory judgment, “severe economic loss,” and punitive damages. The tenant asserted that the owner breached the lease by failing “to commence and complete construction work in the leased premises and the building in a timely manner, thereby preventing [tenant] from opening a restaurant at the premises.” The owner countered that it performed its construction work “with all reasonably possible speed, and…the lengthy delay in the completion of the work was beyond its control.” A non-jury trial had been held.

The property was located near subway lines and the landlord’s work required approval by the Metropolitan Transportation Authority (MTA). The tenant was to occupy ground floor and cellar space for operation of a restaurant. The lease term commenced on June 6, 2007 and expired on May 31, 2024. Following the trial, the parties stipulated to terminate the lease as of Dec. 12, 2017. At the time the lease was executed, the owner intended to commence a “large construction project that would add several stories to the building.” Thus, work was to be done inside and outside of the demised premises.

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