Illegal cannabis shops have been popping up all over New York City. Businesses are selling marijuana and various cannabis-related products without required licenses, including from New York’s Office of Cannabis Management. Such operations expose the landlords to liability, including, nuisance and criminal behavior around the premises interfering with other tenants; threats from various agencies such as the NYPD, Sheriff’s office, and the Attorney General; fines, violations, and penalties; closure orders and injunctions by the Sheriff and NYPD; and padlocked ghost premises where tenants become unresponsive and stop paying the rent once the Sheriff seals the business with little hope of reopening.

Adam Leitman Bailey, P.C. is aggressively representing commercial landlords against such illegally operating tenants. The matter often starts when an agency sends a letter to the landlord informing the landlord of illegal activity in the premises, demanding that the landlord take action and threatening the landlord with fines or other enforcement action. In such case we investigate the facts, analyze the commercial lease, and typically start with a cease and desist letter to the tenant and a response to the agency informing it that the landlord is taking the allegations seriously and will ensure compliance.

If the problem persists, a landlord has the power to commence an illegal business holdover proceeding, which does not require a predicate notice, and allows a landlord to go straight to holdover petition. In some cases, the NYPD starts a proceeding in Supreme Court, seeking a closure order.

By this time, in many cases, the tenant is already padlocked by the Sheriff’s office.

We prosecute the cases aggressively to eviction, or engage in settlement negotiations with the tenant or their attorney for a surrender of the premises. The negotiation often involves questions of who gets the security deposit, payoff of any rent arrears, and the terms for releasing any guarantor.

The tenant must sign a surrender statement, which the landlord can then submit to the Sheriff’s office with a request for the padlock to be removed so that the landlord can re-rent the premises and start generating income from the space again.

Current wait times for an order to unlock the premises can range from six weeks to two months. However, with an issued warrant of eviction in the holdover proceeding and a scheduled marshal’s eviction against the tenant, and with proper coordination with the Sheriff and NYPD, a landlord can expedite unsealing the premises. Furthermore, few people know that requests can be made for limited access to the premises while the landlord awaits a determination on the unsealing request.

Vladimir Mironenko, co-managing partner of the Adam Leitman Bailey, P.C. Landlord-Tenant department, and his colleagues are representing commercial landlords concerning illegal cannabis shops in New York City.