Oral Lease Modification Doesn’t Get Good Guy Guarantor Off the Hook

What Happened: The landlord sued a dry-cleaning tenant for nearly $200,000 in damages, including $46,733 in unpaid rent that accrued up to the time the tenant vacated. It also went after the good guy guarantor that “unconditionally, irrevocably and as a primary obligor” guaranteed the tenant’s “full and faithful performance and observance” of the lease terms. The trial court rejected the tenant’s COVID-19 force majeure, frustration of purpose, and other defenses and awarded the landlord summary judgment. But it also found the good guy guarantor not liable for the tenant’s unpaid rent. The tenant didn’t appeal, but the landlord did.

Ruling: The New York appeals court reversed.

Reasoning: The lower court should have also awarded the landlord summary judgment against the good guy guarantor. After all, the landlord won the underlying claims against the tenant and the guarantor raised no valid defenses as to its own liability for the tenant’s failure to pay rent. The guarantor’s assertion that the landlord orally agreed to modify the amount of rent due flew in the face of the lease provision requiring that all modifications be in a writing signed by the landlord, the court reasoned, while also noting that there were no claims of partial performance or equitable estoppel.  

• 9-11 Stanton St. Realty Corp. v. Stanton St. Cleaners, Inc., 2023 N.Y. App. Div. LEXIS 6997, 2023 NY Slip Op 06795