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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: June 3, 2020

Statute of Frauds Bars Claims Based on Alleged Oral 99-Year Lease

On May 13, 2020, the Second Department issued a decision in Roman Catholic Church of the Epiphany v. City of New York, 2020 NY Slip Op. 02818, holding that the statute of frauds barred claims based on an alleged oral 99-year lease, explaining:

The statute of frauds prohibits, inter alia, the lease of real property for a period of more than one year without a written contract. While the statute of frauds permits courts of equity to compel specific performance of an otherwise prohibited agreement in cases of part performance (see General Obligations Law § 5-703[4]), the claimed partial performance must be unequivocally referable to the alleged agreement. It is insufficient that the alleged agreement gives significance to a party’s actions. The relevant inquiry is whether the actions alone would be unintelligible or at least extraordinary, explainable only with reference to the oral agreement.

Here, the plaintiff’s causes of actions are barred by the statute of frauds, as there was no written contract between the parties establishing the existence of a 99-year, rent-free lease for the disputed parcel. Moreover, contrary to the plaintiff’s contention, there is no evidence in the record of conduct by the plaintiff which is unequivocally referable to a purported 99-year, rent-free lease and inconsistent with any other explanation.

(Internal quotations and citations omitted).

New York contract law–usually straightforward–has traps for the unwary, like the requirement that some contracts be in writing (the statute of frauds). There are ways to escape from those traps, but the exceptions are narrow and difficult to meet. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client face a situation where you are unsure how to enforce rights you believe you have under a contract.

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