NY Statute (2019) Prohibiting Lease Provisions Waiving the Right to Bring a Declaratory Judgment Actions Held Not Retroactive

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As noted by the Supreme Court, Kings County, the issuance of a Yellowstone injunction must be predicated on an action for a declaratory judgment. Leases entered into in 2010 provided that the tenants waived the right to bring declaratory judgment actions with respect to any lease provision or any notice sent pursuant to the leases. Based on that waiver, the tenants’ motion for a Yellowstone injunction was denied. In 2019, the Court of Appeals, in 159 MP Corp v. Redbridge Bedford, LLC (33 NY3d 353), affirmed the ruling of the Appellate Division, Second Department, holding the waiver in these leases was enforceable.

Real Property Law Section 235-h (“Waiver of right to bring a declaratory judgment action”), was enacted December 19, 2019. “Effective immediately”, it states that “[n]o commercial lease shall contain any provision waiving or prohibiting the right of any tenant to bring a declaratory judgment action with respect to any provision, term or condition of such commercial lease. The inclusion of any such waiver in a commercial lease shall be null and void as against public policy.”

Based on the enactment of Section 235-h, the tenants moved to renew their prior motion seeking a Yellowstone injunction. The Supreme Court, Kings County, denied the motion, holding that Section 235-h was not to be applied retroactively. 159 MP Corp v. Redbridge Bedford LLC, 2021 NY Slip Op 31716, decided April 9, 2021:

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Mike Berey
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