Sublease Shifted Maintenance Obligation to Tenant

Facts: A tenant that rented five floors of an office building and the attached parking garage sublet the garage space to a parking garage operator. The owner later discovered water damage in the garage. It sued the tenant, asserting that the tenant was obligated under the lease to maintain the garage and its failure to do so caused the water damage.

The tenant claimed that the subtenant was responsible for maintaining the garage. It sued the subtenant, asserting that it was entitled to indemnification for any damages that it might have to pay to the owner if the owner prevailed in its lawsuit against the tenant. The subtenant argued that the dispute was between the owner and tenant. It asserted that by the express terms of its sublease with the tenant, repairs to the floor and ceiling slab that sustained water damage were the tenant’s sole responsibility. It asked a court for a judgment in its favor without a trial. 

Decision: The New York Supreme Court ruled in favor of the subtenant.

Reasoning: The court stated that the unambiguous terms of the sublease established that the tenant was responsible for all repairs to water-damaged areas and that the subtenant bore no responsibility for maintenance or repair of them, except to keep them in clean condition and to apply a sealer to them every three years. The court determined that the clear intent of this language was to shift all burdens associated with major repairs to the floor and ceiling slabs of the parking garage from the subtenant to the tenant, with the exception of any structural repairs arising out of the subtenant’s negligence, which wasn’t an issue here.

• Excelsior 57th Corp. v. Excel Assoc., October 2013