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Yellowstone Injunctions: A Threat to Board's Eviction Power

When a troublesome commercial tenant uses this tool …

A PROACTIVE STRATEGY IS CRUCIAL

 

For boards grappling with problematic commercial tenants, few legal tools strike more concern than the Yellowstone injunction. This powerful legal mechanism, dating back to the 1970s, can significantly complicate a board’s efforts to address issues with commercial tenants, potentially turning what should be a straightforward eviction into a prolonged legal battle.

Named after a landmark case involving the Yellowstone company, this injunction serves as a protective shield for commercial tenants, effectively halting eviction proceedings and moving cases from civil court to the New York Court of Appeals. This transition typically results in a more extended legal process, complete with discovery proceedings that aren’t available in standard eviction cases.

LIFE SAFETY ISSUES. When sponsors retain ownership of commercial units, a three-tiered relationship is created: the board, the commercial unit owner and the tenant leasing the space. Such arrangements often result in two separate contracts and potentially two separate legal actions, which may or may not be consolidated depending on judicial discretion. If your commercial tenant is problematic, two specific circumstances can prevent them from obtaining a Yellowstone injunction: failure to pay rent and lapsed insurance coverage during the lease term. 

Consider the emerging challenge of lithium-ion batteries from e-bikes and electric scooters, which have caused fires and fatalities throughout New York City. Boards facing such safety concerns can use the threat of eviction — and the possibility of a Yellowstone injunction — as leverage to prompt immediate action. This typically begins with serving a default notice outlining specific safety concerns, followed by a termination notice if the issues remain unaddressed.

Even when a Yellowstone injunction is granted, the process often leads to swift resolution of immediate safety concerns. Courts typically prioritize life safety issues, facilitating expedited inspections and remediation. Most cases ultimately end in settlement, whether through problem resolution or negotiated tenant relocation.

PREPARATION IS KEY. When preparing a commercial lease, make sure your attorney includes favorable language allowing quick action against problematic commercial units. The 2019 Housing Stability and Tenant Protection Act added new layers of complexity to the process, implementing additional notice periods and requirements for landlord-tenant proceedings. Failure to follow these requirements precisely can result in case dismissal and costly delays.

While Yellowstone injunctions may seem daunting, they often serve their intended purpose: bringing parties together to resolve disputes through negotiation rather than prolonged litigation. Understanding this tool — and the narrow circumstances in which it doesn’t apply — can transform it from a source of frustration into a catalyst for problem resolution, ultimately serving the best interests of buildings and residents.

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