S 421 NY
Requires landlords to mitigate damages when commercial tenants vacate premises in violation of the terms of the lease
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Summary
This bill amends state law to require landlords to mitigate damages when commercial tenants break their leases by vacating in violation of lease terms. Landlords would be required to take reasonable and customary actions in good faith to rent the premises at fair market value or the previously agreed rate, whichever is lower. Once a new tenant's lease takes effect, it would terminate the previous tenant's liability for the remainder of the lease term, limiting the damages the departing tenant owes. Landlords may still recover damages for any rent not recovered through mitigation efforts. Any lease provision that exempts a landlord from the duty to mitigate would be void as contrary to public policy, and the burden of proof for damages claims rests with the party seeking recovery.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Official abstract
Requires landlords to mitigate damages when commercial tenants vacate premises in violation of the terms of the lease.
Sponsor (1)
- John Liu Democratic · primary
Action history (4)
- Jan 8, 2025 REFERRED TO JUDICIARY · upper
- Jan 7, 2026 REFERRED TO JUDICIARY · upper
- May 29, 2026 AMEND AND RECOMMIT TO JUDICIARY · upper
- May 29, 2026 PRINT NUMBER 421A · upper
Text versions (3)
Full text
Full text imported from assembly.state.ny.us
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Bill No.: Summary Actions Committee Votes Floor Votes Memo Text LFIN Chamber Video/Transcript S00421 Summary: BILL NO S00421A   SAME AS SAME AS A02611-A
  SPONSOR LIU   COSPNSR   MLTSPNSR   Amd §227-e, RP L   Requires landlords to mitigate damages when commercial tenants vacate premises in violation of the terms of the lease.
Go to top S00421 Text:
STATE OF NEW YORK ________________________________________________________________________
421--A
2025-2026 Regular Sessions
IN SENATE
(Prefiled)
January 8, 2025 ___________
Introduced by Sen. LIU -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary -- recommitted to the Committee on Judiciary in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the real property law, in relation to requiring land- lords to mitigate damages when commercial tenants vacate premises in violation of the terms of the lease
The People of the State of New York, represented in Senate and Assem- bly, do enact as follows:
1 Section 1. Section 227-e of the real property law, as added by section 2 4 of part M of chapter 36 of the laws of 2019, is amended to read as 3 follows: 4 § 227-e. Landlord duty to mitigate damages. 1. In any lease or rental 5 agreement, excluding any real estate purchase contract defined in para- 6 graphs (a), (c) and (d) of subdivision four of section four hundred 7 sixty-one of this chapter, covering premises occupied for dwelling 8 purposes, if a tenant vacates a premises in violation of the terms of 9 the lease, the landlord shall, in good faith and according to the land- 10 lord's resources and abilities, take reasonable and customary actions to 11 rent the premises at fair market value or at the rate agreed to during 12 the term of the tenancy, whichever is lower. If the landlord rents the 13 premises at fair market value or at the rate agreed to during the term 14 of the tenancy, the new tenant's lease shall, once in effect, terminate 15 the previous tenant's lease and mitigate damages otherwise recoverable 16 against the previous tenant because of such tenant's vacating the prem- 17 ises. The burden of proof shall be on the party seeking to recover 18 damages. Any provision in a lease that exempts a landlord's duty to 19 mitigate damages under this section shall be void as contrary to public 20 policy.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01676-03-6
S. 421--A 2
1 2. In any lease or rental agreement, excluding any real estate 2 purchase contract defined in paragraphs (a), (c) and (d) of subdivision 3 four of section four hundred sixty-one of this chapter, covering prem- 4 ises not occupied for dwelling purposes, if a tenant vacates a premises 5 in violation of the terms of the lease, the landlord shall, in good 6 faith and according to the landlord's resources and abilities, take 7 reasonable and customary actions to rent the premises at fair market 8 value or at the rate agreed to during the term of the tenancy, the new 9 tenant's lease shall, once in effect, terminate the previous tenant's 10 lease and mitigate damages otherwise recoverable against the previous 11 tenant because of such tenant's vacating the premises. Nothing in this 12 section will preclude the landlord from seeking recovery of damages for 13 that portion of the rent not recovered through any successful effort to 14 release the property under the duty to mitigate in this section. The 15 burden of proof shall be on the party seeking to recovery damages. Any 16 provision in a lease that exempts a landlord's duty to mitigate damages 17 under this section shall be void as contrary to public policy. 18 § 2. This act shall take effect immediately.
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