This month Governor Cuomo signed a new law that simplifies and improves the state’s power of attorney form. A power of attorney is one of the most widely used legal documents, allowing people to transfer the power to manage their own affairs, especially when they may no longer be able to do so due to health issues or age, to someone else. Executing a power of attorney is an important estate planning tool which avoids the need for a time consuming and expensive guardianship proceeding if a person becomes incapacitated.

It has long been complained that the current power of attorney form was too complex, costly and difficult for individuals to readily use. Residents of nursing homes and long-term care facilities found it difficult to prepare the current power of attorney forms during the pandemic when an attorney was not present to guide the preparation of the forms. The prior law contained a rigid requirement that the exact language of the statute be incorporated in the document which resulted in the power often being invalidated for harmless errors.

The new law, which takes effect in 180 days, makes language that substantially conforms with the statute sufficient rather than requiring the language in the form to incorporate the exact wording of the statute. The new law also importnantly creates a presumption in favor of the validity of a power of attorney form. Furthermore, the new law discourages banks and other financial institutions from improperly refusing to accept the form by authorizing a judge to impose penalties and attorney fees against institutions that unreasonably refuse to accept the new, valid power of attorney form.

Additional changes to the power of attorney include:

  • The form will be condensed from the current two-document format of the Short Form and Statutory Gifts Rider, to a single, more user-friendly document format.
  • Witness requirements are simplified.
  • The new provisions will also allow the document to be executed on behalf of a client who has a physical inability to sign the paperwork.

We fully expect that documents executed prior to the new legislation will be honored and will remain enforceable under New York State law. This means documents currently in effect will not be invalidated.

In this commercial landlord-tenant case commenced in the Supreme Court, the plaintiff landlord sought rent and additional rent claiming that the defendant tenant leased a portion of the twelfth floor at plaintiff’s building in Manhattan as office space with a lease which was not to expire until February 2022 and that the tenant stopped paying rent in February 2020 and eventually vacated the space five months thereafter on June 30, 2020. In opposition, defendants cited the ongoing pandemic as the reason the tenant stopped paying rent. Defendants argued that performing under the lease was objectively impossible and, therefore, any default was excusable. Defendants also relied on the frustration of purpose doctrine to excuse the tenant’s failure to pay rent.

The Court concluded that the frustration of purpose doctrine did not apply where the tenant rented office space under a generic office lease, simply because the tenant’s industry experienced a precipitous downfall and the tenant was no longer able to pay the rent.

Similarly, the Court found the impossibility doctrine inapplicable holding that:

“Impossibility excuses a party’s performance only when the destruction of the subject matter of the contract or the means of performance makes performance objectively impossible. Moreover, the impossibility must be produced by an unanticipated event that could not have been foreseen or guarded against in the contract.”

Daniels Norelli Cecere & Tavel, PC anticipates this case to be the first of many such cases which will be decided on this issue of the defenses of frustration of purpose and impossibility to the nonpayment of rent in a commercial lease. It is expected that every case will seek to distinguish itself based upon some unique facts. We will be following the cases closely and will keep you apprised of any significant developments.

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