- Court
- New York Supreme Court, Appellate Division, Second Department
- Case
- Heung Man Lau v. South Brooklyn Railway Company
- Date
- June 3, 2026
- Slip Op. No.
- 2026 NY Slip Op 03428
Background
Defendant South Brooklyn Railway Company, an MTA subsidiary, entered into a “Retail Concession License Agreement” with plaintiff Heung Man Lau in November 1998, allowing plaintiff to use a warehouse and parking lot on 5th Avenue and 38th Street in Brooklyn for warehousing and parking trucks and vehicles. The agreement expressly stated it did not create a landlord-tenant relationship and gave the defendant authority to terminate with 60-days’ notice for any corporate purpose. After the original term and a 10-year extension expired, the parties executed a month-to-month holdover agreement requiring only 30-days’ notice to terminate.
In April 2022, defendant sent a 30-day termination notice and began locking plaintiff out of parts of the lot. Plaintiff commenced this action alleging commercial tenant harassment under Administrative Code Section 22-902(a) and seeking a declaration of a “valid month-to-month lease.” Defendant issued a new 30-day termination notice in June 2024. Plaintiff moved for a preliminary injunction and a Yellowstone injunction enjoining enforcement of the termination. Supreme Court, Kings County (Peter P. Sweeney, J.), denied the motion. Plaintiff appealed.
Holding
The Appellate Division, Second Department, affirmed the denial of plaintiff’s motion for a preliminary and Yellowstone injunction, with costs. The Court applied the three-part test for preliminary injunctions: (1) likelihood of success on the merits, (2) irreparable injury absent the injunction, and (3) balance of equities favoring the movant. The Court upheld the trial court’s determination that plaintiff failed to demonstrate a likelihood of success on the merits, given the clear terms of the license agreement establishing a revocable license rather than a tenancy. The agreement expressly disclaimed any landlord-tenant relationship and conferred no real property rights. Accordingly, the commercial tenant harassment provisions of the Administrative Code were inapplicable, and the claim for declaratory relief regarding a “lease” could not succeed.
Takeaways
This decision reinforces the distinction between a license and a lease in the commercial real property context. When an agreement expressly disclaims a landlord-tenant relationship and denies the occupant any real property rights, courts will not recharacterize it as a tenancy simply because of long-term occupancy. The anti-harassment protections available to commercial tenants under the Administrative Code do not extend to licensees. Long-term occupants under license agreements should recognize their precarious legal position and negotiate for lease protections if they seek security of tenure.
Why It Matters
Real property practitioners and commercial occupants should carefully evaluate the legal character of their occupancy agreements. This case demonstrates that even decades of occupancy under a license agreement do not transform the arrangement into a tenancy. MTA subsidiaries and other government-related landlords frequently use license agreements precisely to avoid creating tenancy rights, and this decision validates that approach. Occupants who rely on Yellowstone injunctions—designed to protect commercial tenants from lease termination—will find that remedy unavailable when the underlying agreement is a license rather than a lease. The lesson is clear: the agreement’s terms, not the duration of occupancy, determine the occupant’s rights.