On September 22, 2025, Justice Masley of the New York County Commercial Division issued a decision in CORE 5th Ave. LLC v. 711 Fifth Ave. Principal Owner LLC, 2025 NY Slip Op. 33557(U), refusing to enforce a lease provision that had the effect of barring a tenant from seeking a Yellowstone injunction, explaining:
Tenant also relies on RPAPL §235-h, which was enacted in 2019, and provides that no commercial lease shall contain any provision waiving or prohibiting the right of any tenant to bring a declaratory judgment action any such waiver provision in a commercial lease shall be null and void as against public policy. Tenant asserts that the 2021 Lease here effectively contracts around RPAPL §235-h by omitting a cure period.
Enactment of RPAPL §235-h was triggered by 159 MP Corp. v Redbridge Bedford, LLC (33 NY3d 353 [2019]), where tenant sought a Yellowstone injunction during the cure period, but the lease contained a provision that waived the tenant’s right to seek a declaratory judgment on which a Yellowstone would be based. In 159 MP Corp., landlord gave tenant 15 days to cure various breaches. The lower courts held that tenant had no ability to extend the cure period because of the waiver provision and thus could not avail itself of Yellowstone. The Court of Appeals sustained the wavier provision, finding that the strong public policy in favor of enforcing contracts trumped a new public policy protecting the right to a declaratory judgment. The legislature enacted RPAPL §235-h within nine months of the decision.
Landlord contends that Tenant has no right to seek a Yellowstone. Landlord does not dispute that Tenant satisfied elements one to three. Rather, Landlord argues that Tenant has no ability to cure because the Lease defines failure to timely pay rent as a default for which there is no cure period. According to Landlord, without a right to cure for non-payment of rent, Tenant is not entitled to even seek a Yellowstone injunction. Landlord insists this is a bargained for provision to which RPAPL §235-h does not apply.
The court finds that the Lease here effectively, and impermissibly, prohibits Tenant’s right to seek a declaratory judgment by omitting a right to cure before termination of this valuable Lease. The court rejects Landlord’s reading of the 2019 enactment of RPAPL §235-h following 159 MP Corp. (33 NY3d 353 [2019]) and finds the absence of cases in support of its position fatal. Rather, the enactment of RPAPL §235-h has been interpreted such that a lease cannot bar a timely Yellowstone application. However, that is precisely Landlord’s argument here. In his dissent in 159 MP Corp., Judge Wilson predicted that in the aftermath of the decision, landlords will undoubtedly include a waiver of declaratory and Yellowstone relief in their leases as a matter of course. Those clauses will enable them to terminate the leases based on a tenant’s technical or dubious violation whenever rent values in the neighborhood have increased sufficiently to entice landlords to shirk their contractual obligations. Now, landlords omit a cure period entirely to get around RPAPL §235-h. However, the legislative intent is clear; allowing a tenant to seek a declaratory judgment before it loses its valuable lease trumps enforcement of a lease as written when that lease is against public policy. Moreover, long before the decision in 159 MP Corp., a tenant could seek a Yellowstone in the face of a threat of termination of the lease. As Tenant’s application for a Yellowstone is timely (before the lease expired), the court finds that it may exercise its equitable powers to issue a Yellowstone injunction.
(Internal quotations and citations omitted).