New York Commercial Landlord Required Disclosures

While New York's residential disclosure regime is one of the most extensive in the country, commercial tenancies, governed primarily by the Real Property Law (effective since 1896), operate under a framework where contractual disclosures and due diligence replace most statutory mandates.

Limited Statutory Disclosures

Unlike residential tenancies, New York does not impose a manage set of mandatory pre-lease disclosures for commercial landlords. The principle of caveat emptor (buyer beware) applies more broadly in commercial dealings, with the expectation that commercial tenants will conduct their own due diligence.

However, landlords must still comply with:

1. Security Deposit Notice (GOL § 7-103)

Under N.Y. General Obligations Law § 7-103, a landlord receiving a security deposit must hold it in trust and not commingle it with personal funds. Upon depositing the funds in a banking organization within the state, the landlord must provide written notice to the tenant of the name and address of the banking organization and the amount of the deposit.

Note: Unlike residential properties with six or more units, commercial landlords are not statutorily required to place deposits in interest-bearing accounts unless specifically required by the lease agreement.

2. Automatic Renewal Notice (GOL § 5-905)

If a commercial lease contains an automatic renewal clause, the landlord must provide written notice to the tenant (by personal service or registered/certified mail) between 15 and 30 days before the deadline to provide notice of non-renewal. Failure to provide this statutory disclosure renders the automatic renewal clause unenforceable under N.Y. General Obligations Law § 5-905.

3. Asbestos Notification (NYC)

In New York City, building owners must provide notice to occupants (including commercial tenants) at least 10 days (but not more than 15 days) before the commencement of asbestos abatement activities under NYC Admin. Code § 24-146.1 and 15 RCNY § 1-05. For small or minor projects, notice must be provided at least 3 days prior pursuant to 12 NYCRR § 56-3.6.

4. Certificate of Occupancy

Under NYC Admin. Code § 28-118.3.2, no building or portion thereof shall be occupied or used in a manner that is inconsistent with the last issued Certificate of Occupancy (CO). Landlords must ensure the premises comply with the CO for the tenant's permitted use. Failure to provide a premises that can be legally occupied may constitute a breach of the covenant of quiet enjoyment.

5. Termination of Month-to-Month Tenancy (RPL § 232-a)

In New York City, a landlord must provide a written notice of termination to a month-to-month tenant under N.Y. Real Prop. Law § 232-a. Following the HSTPA 2019, the required notice period is based on the length of occupancy:

• 30 days if occupancy is less than one year.
• 60 days if occupancy is between one and two years.
• 90 days if occupancy is two years or more.

Best Practice Disclosures via the Lease

Sophisticated New York commercial leases typically include extensive representations and warranties that function as disclosure mechanisms:

• Zoning Representations: The landlord discloses the current zoning classification but typically disclaims any warranty that the premises are suitable for the tenant's specific use.
• Building Violations: Disclosure of any open NYC Department of Buildings (DOB) violations.
• Litigation: Disclosure of any pending litigation affecting the property.
• Insurance Requirements: Full disclosure of required insurance types and minimum coverage amounts.
• CAM and Tax Escalation Base Years: Detailed disclosure of the base year used for operating expense escalations.
• Subordination to Mortgages: Disclosure that the lease is subordinate to existing or future mortgages.

Estoppel Certificates

New York commercial leases routinely require both landlords and tenants to provide estoppel certificates upon request. These certificates act as disclosure documents confirming the current status of the lease, outstanding defaults, deposit balances, and any modifications.

How Landager Helps

Landager tracks lease terms and security deposit interest - making it easy to handle your property portfolio while staying compliant with New York regulations.

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