## Facts

- Tenants leased a fourth-floor Manhattan loft under a commercial lease, using about two-thirds as a music studio and one-third as a residence.
- A fifth-floor spa business kept water-filled equipment, causing at least 40 leaks over several years that damaged tenants’ property and musical instruments.
- The spa tenant’s sandblasting sent sand and dust into the loft through ceiling and pipe openings, affecting living conditions and continuing through trial.
- The landlord began major construction to convert the building to a Class A multiple dwelling, creating noise, dust, debris, and vibrations and disrupting services.
- Construction conditions rendered the studio portion unusable for its intended purpose, and tenants stopped using that portion while continuing to occupy the residential area.
- In a summary nonpayment proceeding, tenants asserted defenses and counterclaims seeking rent abatements for loss of use and for breach of the warranty of habitability, including punitive damages.
- The trial court granted substantial tenant relief; the landlord appealed, challenging constructive eviction (including a partial theory), abatements, and punitive damages.

## Issues

1. Whether constructive eviction may be asserted as a defense to nonpayment when the tenant abandons only a portion of the premises made unusable by the landlord’s conduct.
2. How rent relief should be measured when part of the premises is unusable and the remainder is occupied under impaired conditions.
3. Whether punitive damages are available for breach of the warranty of habitability, and what level of landlord misconduct is required.

## Decision

- The appellate court held that constructive eviction may apply where the tenant abandons only the affected portion of the premises, if the landlord’s acts substantially interfere with that portion’s use.
- The court approved a rent abatement corresponding to the portion from which the tenants were constructively evicted (the studio area) for the relevant period.
- For the portion the tenants continued to occupy, the court allowed an additional partial abatement based on breach of the statutory warranty of habitability.
- The court reaffirmed that punitive damages may be awarded in warranty of habitability cases when the landlord’s conduct reflects sufficiently high moral culpability, including intentional or malicious disregard for tenant rights and safety.

## Legal Principles

- Constructive eviction can be established by landlord conduct that substantially and materially deprives a tenant of use and enjoyment; abandonment is required, but it may be limited to the affected portion when the interference is partial and identifiable.
- Rent may be fully excused for the portion of premises from which the tenant is constructively evicted, while separate habitability-based abatements may apply to portions still occupied.
- Under New York’s warranty of habitability, a tenant may receive a rent abatement reflecting the diminished value of the premises “as is” compared to “as warranted,” even where occupancy continues.
- Punitive damages may be available for habitability violations when the landlord’s actions or inaction show intentional or malicious conduct, or comparable moral culpability demonstrating disregard for tenant rights and safety.

## Conclusion

The court recognized partial constructive eviction as a defense to nonpayment, permitting rent to be proportionally excused for the abandoned, unusable portion of the premises while allowing additional habitability abatements for the occupied portion, and it confirmed that punitive damages may be awarded for egregious habitability violations marked by high moral culpability.


Minjak Co. v. Randolph, 140 A.D.2d 245, 528 N.Y.S.2d 554 (App. Div. 1st Dep’t 1988)