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In a recent court decision regarding COVID-19’s impact on rent obligations, the Appellate Division of the First Department in The Gap Inc. v. 170 Broadway Retail Owner LLC, 2021 NY Slip Op 04115 (June 29, 2021), reversed the lower court and rejected various claims asserted by tenant that it didn’t need to pay rent as a result of the pandemic. Relying on both the lease and legal precedent, the Appellate Division ruled that tenant could not rely on the legal doctrines of frustration of purpose or impossibility. The Appellate Division also held that tenant was not entitled to a rent abatement under the lease in connection with tenant’s casualty claim since the casualty provision refers to physical damage and did not contemplate loss of use due to a pandemic or resulting government lockdown. The decision is available here:

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