9.26 IX. Dispute Resolution

• Jurisdiction: New York

IX. Dispute Resolution

Landlords’ proposed leases often include a clause saying that in a dispute about such items as operating costs, electricity, and real estate taxes, the tenant must pay whatever ownership has billed, but can take the landlord to court. This is a bad idea for your clients. It gives them nothing they did not have already, and the landlord has no incentive to settle. Time-consuming and costly litigation may leave a tenant with no answer for years. Meanwhile, the landlord has your client’s money even if the court eventually rules in favor of your client.

Provide for dispute resolution in the lease. Here are a few guiding principles:

• Arbitration may be the best method to resolve disputes like disagreement over the fair market rent or whether a tenant’s

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