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Cardozo Public Law, Policy and Ethics Journal

Abstract

Difficulties in the residential and commercial real estate markets have caused an influx of cases in the New York State courts through which banks seek the foreclosure of delinquent mortgages and landlords seek the eviction of tenants that are in default of rent payment obligations.

New York State has long recognized 'Yellowstone injunctions" in the context of commercial leases, where tenants have been permitted to preemptively obtain court orders enjoining their landlords fom terminating breached leases. The concept is named after its case oforigin, First National Stores, Inc. v. Yellowstone Shopping Center, Inc., which was decided by the state's court of appeals in 1968. To be entitled to Yellowstone injunctions, tenants must establish that 1) they hold a commercial lease, 2) they have received fom the landlord a notice of default, notice to cure, or threat of termination of the lease, 3) their applications were made prior to the expiration of the cure period and the termination of the lease, and 4) they have the desire and ability to cure the alleged default by any means short of vacating the premises. Various public policy grounds support the grant of Yellowstone injunctions in favor ofcommercial tenants willing to cure their lease breaches.

The current economic climate may raise the question of the extent to which the Yellowstone concept might be expanded beyond commercial tenants, to residential tenants as well. Indeed, there have been a small number of cases where residential tenants have sought to co-opt Yellowstone remedies in their favor.

This Article examines the extent to which Yellowstone relief has been recognized by courts in non-commercial contexts. Based upon a review of the relevant decisional and statutory authorities, it appears that Yellowstone injunctions may be obtained by residential owners of cooperative apartments who have equitable interests in maintaining their proprietary leases; commercial tenants who breach their leases by improperly permitting residential uses of the premises; and holders of purely residential leases that have an articulable, peculiar, equitable interest in maintaining their tenancies, such as continuing in long-term rent-controlled apartments.

Yellowstone injunctions are not available in favor of any residential tenants residing in the City of New York or tenants of commercial space in the City ofNew York used residentially under the state's "Loft Law, " as their cure remedies have been statutorily preempted by section 753 of the Real Property Actions and Proceedings Law (RPAPL). As to the ultimate focus of this Article-tenants subject to pure residential leases outside of the City of New York-tenants that have no particular equitable or proprietary interest in maintaining their leasehold are not entitled to Yellowstone injunctions, either. This is true despite the language of certain recent appellate cases suggesting, superficially, that Yellowstone remedies have been extended in favor of residential tenants.

The law is fairly well-developed in the foregoing areas of landlordtenant interaction, yet this is the first research article that examines Yellowstone relief in the context of various forms of residential tenancies. The Article may be socially, legally, and economically timely to the extent that further cases in New York courts will probe the limits of Yellowstone injunctions relative to residential leases.

Disciplines

Housing Law | Law | Legal Remedies | Legislation

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