In a commercial lease, just as in a residential lease, a departing tenant has an obligation to return the premises to the landlord in good condition. New York's biggest landlord of office space recently filed a lawsuit in the state Supreme Court alleging that a major financial firm failed to do that. The landlord is seeking $20 million in damages.
SL Green Realty claims American International Group breached its lease at 180 Maiden Lane by failing, among other things, to maintain electrical installations in its space. SL Green claims AIG failed to take care of electrical busways that carry supplemental power. SL Green alleges the busways will have to be removed and replaced, at a cost of $17 million.
SL Green also alleges in the suit that AIG made significant renovations to the space, including installing a kitchen that will have to be taken out before a new tenant can move in, installing concrete slabs to provide greater floor support and cutting passages between floors. SL Green also claims AIG did not leave the space "broom clean" as required by the lease. The suit alleges that a significant amount of trash and debris was left behind.
AIG was the largest tenant in the building and moved out in April of this year. They relocated to new offices at 175 Water Street.
Commercial lease disputes can be complex and acrimonious. A lawsuit will typically turn on the interpretation of specific language in the lease. The meaning of key terms in the lease can be determined by case law, as well as prior dealings between the parties. Many of these cases can be successfully settled if counsel are familiar with commercial lease disputes and have an understanding of what is usually negotiable. If the case can't be settled, however, counsel must be prepared to go to trial.
Source: therealdeal.com, "SL Green sues AIG for $20M," Adam Pincus, July 11, 2014