A retail lease in SOHO provided for a renewal rent determined by an “independent MAI appraiser chosen by Landlord”. Should be pretty easy, right? Not so fast says Justice Tolub in Georg Jensen v. 130 Prince Associates LLC, NYLJ, 6/26/09, pg 26. The appraiser hired by the landlord worked for the management company for the landlord. In addition, there was no written retainer agreement with the appraiser, the written report was prepared well after the oral appraisal was given and the appraiser didn’t seem credible to the court. ”[T]he court finds it so flawed in its methodology as to render it worthless. Moreover, the court can only conclude that …[the] appraisal was not rendered in good faith, was biased, and motivated by [the] desire to confirm [Landlord]’s ‘reading of the market’.” Ouch. The old joke about MAI standing for “made as instructed” won’t work in Justice Tolub’s court.
PartnerTom represents owners, operators and developers in the acquisition, financing, development, ground leasing, and sale of significant properties. His experience includes office towers, commercial condominiums, industrial ...