A recent decision by the Appellate Division, First Department in Theatre Row Phase II Associates v. National Recording Studios, Inc.[1]� emphasizes that a landlord’s damages for its tenant’s unauthorized subletting might, in appropriate circumstances, include the rent collected by the tenant from its subtenant in excess of the tenant’s own rent. This article discusses the reasoning of the case and the legal precedent it cites on the issue.
In Theatre Row, the tenant, National Recording Studios, in 1979 entered into a twenty-five year lease for the former West Side Airline Terminal building at 460 West 42nd Street. National operates at the premises a video and audio studio, and provides studio time, space and services to production companies and related entities. National’s lease specifically prohibits subleasing without the landlord’s written consent.
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