Many leases contain “holdover rent” provisions providing that if the tenant holds over in possession of the demised premises after the expiration or earlier termination of the lease, the tenant is liable for “holdover rent,” which is typically some multiple of the last rent payable under the expired lease. These provisions are generally enforceable as valid, liquidated damages provisions. Indeed, the courts have frequently enforced such holdover liquidated damages provisions providing for two and a half, or even three times the last monthly lease rent in the event the tenant holds over. See, e.g., Teri-Nichols Institutional Food Merchants v. Elk Horn Holding Corp., 64 AD3d 424 (1st Dept. 2009) (“holdover clause, providing for…three times the expired monthly rent…is enforceable”); Thirty-Third Equities v. Americo Group, 294 AD2d 222 (1st Dept. 2002) (holdover clause requiring the tenant to pay holdover damages at the rate of two and a half times the monthly rent was enforceable).

‘Hamilton’

Sometimes, however, an imprudent landlord can, by its own actions, prevent itself from taking advantage of an otherwise enforceable holdover rent provision. A noteworthy decision handed down in October of this year by Justice Saliann Scarpulla of the Commercial Division, Supreme Court, New York County in Hamilton 65th Partners v. Smallbone Inc., NYLJ 1202770648871 (Oct. 26, 2016) (Hamilton) presented just such a case.

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