The New York Court of Appeals issued a long-awaited decision today in a case that has significant implications for commercial lease good guy guaranties. Typically, a good guy guaranty provides for a release of the guarantor upon surrender of the premises – often after a notice period – and payment of all rent and additional rent up through the surrender date. The problem arose when a lease required any surrender to be in writing and signed and accepted by the landlord. Lower court decisions incorporated that lease provision into the guaranty and as a result if the landlord did not accept the surrender, the guarantor was not released and remained liable under the guaranty. That all changed by the decision issued today in 1995 CAM LLC v. West Side Advisors, LLC, 2025 NY Slip Op 05782, with an opinion written by Court of Appeals Chief Judge Rowan D. Wilson. The court ruled that tethering the guarantor’s liability to the landlord’s acceptance of surrender “would rent most of the language in the guaranty superfluous.” All of the language in the guaranty, including the notice provision, demonstrated that the parties’ intended the surrender to be unilateral and not dependent upon landlord acceptance. Thus, so long as the guarantor complied with the obligations for release as written in the guaranty, the guarantor would be released without a signed or accepted surrender. Note that if the guaranty on its face does specifically require a written or signed surrender, that will still be enforced.

Following up on our May 20, 2025 post, we are pleased to report that this week the State Senate and Assembly passed the long-awaited bill that allows a private members club in New York to be licensed to a for-profit company. The legislation will add a new section 64(f) to the Alcoholic Beverage Control Law and will create a new license class, a “for-profit club,” that can be licensed for a recreational, social, patriotic, political, athletic or benevolent purpose. A for-profit club license may also be obtained for communal workspace and corporate dining rooms, a change from existing law. To qualify for a license under this new section, the club must have at least 100 members. Liquor service will be limited to dues paying members and their guests. The bill still must be signed by Governor Hochul and then has a 180-day waiting period before it becomes effective. Any not-for-profit members club licensees will likely have to file a class change with the New York State Liquor Authority after the law becomes effective on notice to the local community board or municipality. This is a dramatic change in licensing and Bernstein Redo & Savitsky, P.C. is proud to have been involved in its passage.

Mayor Eric Adams signed into law the controversial Safe Hotels Act, claimed by its sponsors to be a historic step towards enhancing public safety and ensuring worker protection in the city’s hotel and hospitality industry.  The legislation requires hotels to obtain a license to operate in New York City and implements enhanced security and safety measures such as panic buttons for housekeepers, human trafficking recognition training, and subcontracting and employment restrictions for critical, public-facing hotel staff. While the legislation received support form numerous hotel and trade unions, groups supporting hotel owners claimed that it would kill jobs, burden the industry and throw it into turmoil by, among other things, leading to skyrocketing room rates.  Smaller hotels are exempt from the legislation. The bill passed with overwhelming support by the City Council.

A long awaited amendment to the laws on temporary retail permits was signed by Governor Hochul on Wednesday.  The prior law only permitted temporary retail liquor permits on new applications in New York City if the premises had been licensed within the past two years.  The new law, passed by the legislature in June and awaiting the governor’s signature, eliminated the two year requirement. Now, any applicant for an on premises license can apply for a temporary permit, even if the space was never previously licensed. Approval of the temporary permit, however, is conditioned upon the New York State Liquor Authority making a preliminary finding, after the 500 foot law hearing, that the public interest test has been met.  An applicant operating under a temporary permit on a new application must close by midnight, and is not permitted to have a DJ or live music.  This is a hugely significant change in the law, especially given how long it takes for final approval of liquor license applications.

On May 15, 2024, the New York City Bar Association will present a webinar on Restaurant Law from 9:00 am until 1:00 pm sponsored by the Hospitality Law Committee. The program will focus on the corporate, real estate, liquor license, and employment/labor issues in opening and operating a restaurant. Donald Bernstein of Bernstein Redo & Savitsky, P.C. will present a one-hour section on retail liquor licenses in New York, including reviewing who can be licensed, what can be licensed, the 200 foot and 500 foot laws, and how to navigate the New York State Liquor Authority and the local community boards. He will also discuss the ever popular private members club and the rules in New York that govern the licensing of private members clubs.