New York Real Estate Journal published an article on January 27 authored by Olshan Real Estate Of Counsel Thomas Kearns entitled “Top 2025 Legal Developments Affecting New York’s Commercial Real Estate Industry."
Legislatures and regulators continued to pass laws affecting New York’s commercial real estate industry and New York courts continue to issue decisions interpreting agreements. Here are a few highlights:
1. Landlord Broker Fees. The New York City Council passed the FARE Act which prohibits residential landlords from passing on the costs of the landlord’s broker to residential tenants. The law is being challenged in court as this column is being written.
2. Title Insurance Changes. The title policies governing New York’s title insurance industry have changed significantly. Decades long practices have been replaced by new endorsements. The good news is that the endorsements appear to be reasonably priced. The bad news is that prior no-fee informal “affirmative insurance” may no longer be used requiring more work for transactional lawyers to make sure coverage is obtained and some old coverages that may have been granted may no longer be available.
3. Access to Adjacent Properties. As of December 5, 2025, New York amended Real Property Actions and Proceedings Law Section 881 (“RPAPL 881”), the statute that enables courts to grant temporary licenses to adjoining properties for access during construction. Often, work on one property cannot be performed without access to a neighboring property. In addition, building codes require those doing work on their own property to place protections on adjoining properties. RPAPL 881 allows those performing work on their property to obtain a court order granting a license to enter adjoining properties, where such access is necessary but has been refused. As property values have soared, RPAPL 881 litigation has increased. The amendment to RPAPL 881 appears to be an effort to provide more clarity to courts and litigants concerning adjoining access licenses.
4. Oral Agreements and LLCs. New York’s highest appeals court upheld the written contract between two parties to an LLC agreement over the objections of the non-managing member that there was an oral agreement that should supersede the written agreement. The court’s decision was split as was the lower appellate court’s decision showing how close a call it was. (My firm represented to prevailing party.) The decision, Behler v Tao, may signal a renewed adherence to the terms of written agreements. The lesson is to make sure that any agreement you think you have with a controlling LLC member be in writing.
5. Good Guy Guarantees Survive. New York’s highest appeals court also issued a decision on a landlord’s creative argument in an attempt to avoid the consequences of a good guy guaranty. Good guys are lease guarantees from a credit worthy guarantor which are limited only to the rent payable while the tenant remains in possession of the leased space. The idea is that the tenant may surrender the space, usually after advance notice, and the good guy guarantor would be required to pay the rent only through the surrender date. A creative landlord claimed that a clause in the guaranty incorporating the terms of the lease prohibited a surrender because the lease had a prohibition against surrender. But the Court held that, read together, the clear intent was to limit the guarantor’s obligations.
Thomas Kearns is Of Counsel in the real estate department with Olshan Frome Wolosky LLP, New York, N.Y.
Of CounselTom represents owners, operators and developers in the acquisition, financing, development, ground leasing, and sale of significant properties. His experience includes office towers, commercial condominiums, industrial ...