51 LLC v. 34 ABC (2026)

Petitioner 51 East 34th Street LLC commenced this commercial holdover action on February 24, 2024, seeking possession of the premises located at "51 East 34th Street, Ground Floor, New York, NY 10016 (all rooms in Certain Premises on Ground Floor)" (the "subject premises") from the tenant of record, respondent 34 Green Olive Deli Corp. ("respondent"), and fictional undertenant ABC Corp. (collectively, "respondents").

Petitioner alleges that the lease pursuant to which the subject premises were rented by respondent is void in accordance with Real Property Law § 231(1) and Real Property Actions and Proceedings Law § 711(5) and § 715 due to respondent using or permitting the premises for an illegal trade or business, specifically, the unlicensed sale of cannabis and cannabis products. In such an "illegal-use" proceeding, petitioner bears the burden of proving that the premises were used for a "customary and habitual" illegal purpose under RPL § 231, or knowingly used for an "ongoing illegal business" under RPAPL § 715-a.

Based on the credible testimony and evidence adduced at trial, the Court finds that petitioner met its burden of proof that the premises were used for the customary and habitual sale of illegal products. Respondent is correct in its summation that a "single item labeled cannabis is not a 'customary and habitual' practice, nor does it establish an 'ongoing illegal business' devoted to the sale of cannabis." However, that was not the sum and substance of the evidence presented at trial. Indeed, the evidence at trial overwhelmingly supports the conclusion that respondent was engaged in the unlicensed sale of cannabis products, and that such sales were customary and habitual.

Two undercover NYPD officers (UC401 and UC115) credibly testified as to the purchase of items at the respondent's store that were clearly labeled and sold as containing cannabis. These purchases were completed on two separate occasions on two different days.

UC401 testified credibly that on December 4, 2023, he specifically asked the clerk behind the counter for an "eighth" of marijuana. The Clerk provided UC401 with the product (Pet. Ex. 2), which states on the label, "Ganja" and "Cannabis Flower" with "Net Weight 3.5G(0.125OZ)" [i.e., an eighth of an ounce of marijuana], which UC401 purchased for $40.00. UC401 also testified regarding the bodycam video (Pet. Ex. 4) depicting a wide variety of products on display in a glass case, and the clerk pointing out and discussing the different cannabis products, which UC401 also identified as well-known marijuana products. UC401 further testified about (and presented a photo of) the front window of the store (Pet. Ex. 3), which prominently displays to the public what is clearly a brightly lit, green, image of a cannabis leaf. Additionally, above the cannabis leaf display is a lit-up sign that states "Exotic Snacks."

UC115 also credibly testified that upon entering the respondent's store on December 3, 2023, UC115 saw the brightly lit green cannabis leaf, which was next to a brightly lit advertisement for a product called "Runtz," which UC115 testified was well known to be a flavor of marijuana. UC115 specifically asked the clerk behind the counter for "an eighth" of marijuana (which the witness believes he referred to at the time as "weed") and the clerk gave UC115 the product (Pet Ex 6), which UC115 purchased for $45.00. Although the product container is not as clearly labeled as the item purchased by UC401, UC115 testified that Waferz is a well-known cannabis brand. Video of the UC115's undercover buy also depicts the contents of a bag, which appears to be and was identified by UC115 as smelling and looking like marijuana.

The two purchases of cannabis containing items as credibly described by the two undercover NYPD officers, in combination with the testimony and video of the display case containing multiple cannabis products labeled and identified as containing cannabis, along with the brightly lit neon signs in the front window depicting a marijuana leaf, "Exotic Snacks," and a well know brand of flavored cannabis flower ("Runtz"), is sufficient to demonstrate that the premises were customarily or habitually used for the unlicensed retail sale of products marketed or labeled as cannabis.

In addition to this pre-petition evidence of the customary and habitual illegal use of the property, is further evidence of continued illegal use post-petition. In this regard, contrary to respondent's assertions, petitioner is not limited to pre-petition incidents. An illegal use holdover action may be commenced without the service of a termination notice. Gur Assocs. LLC v. Convenience on Eight Corp., 82 Misc 3d 754, 759 (Civ. Ct. 2023). Thus, while in a typical holdover proceeding, the landlord may not submit post-petition evidence to establish a cause of action not sufficiently plead in a notice of termination, there is no such limitation here where there is no need for a termination notice. Here, there is credible and compelling evidence of illegal use pre- and post-petition, and respondent's continuing conduct post-petition is relevant and admissible evidence of respondent's customary and habitual acquiescence to the illegal use of the subject premises.

Petitioner introduced, and the Court admitted, into evidence the certified records of the NYC Office of the City Sheriff's records, which included approximately 100 photographs taken at the premises by the Sheriff's Office on August 1, 2025 and September 27, 2025 (Pet. Ex. 11). These photos depict numerous products clearly and conspicuously labeled as cannabis (Pet. Ex. 11). While perhaps the Court might have benefitted from testimony from someone from the Sherrif's office testifying about and further describing the contents of the photos, this is not a criminal proceeding, and the certified copy of the Office of the City Sherrif's records, produced with an affirmation from an attorney and Sherrif's liaison from the NYC Department of Finance, is admissible. Further, even without the lab reports (which the Court did not admit as the interpretation of lab reports was deemed to require testimony regarding the meaning of the reports subject to cross-examination), the Court does not need testimony or lab reports to see from the admitted photos dozens of products clearly and unambiguously labeled as cannabis products, such as "Wonka Bars" prominently depicting a cannabis leaf on the packaging, "Kid Cannabis Bars," "Silly Sativa Cannabis Infused Live Resin Gummies," "Kahana Cannabis Infused Sativa Pink Guava Gummies," multiple flavored vapes, multiple "cannabis" edibles, and many additional cannabis products. Petitioner may establish an illegal use under RPL § 231(1) by showing that the premises were customarily or habitually used for the unlicensed retail sale of products marketed or labeled as cannabis, and petitioner certainly has done so here. See, Real Property Actions and Proceedings Law § 715-a(4).

The Court also finds notable that respondent conspicuously did not produce any witness (including, for instance, Abrahim Kassim, Saad Haririto, and/or any other officer, agent, or employee) to affirmatively refute petitioner's otherwise unrefuted testimony and evidence of customary and habitual illegal use (and also did not assert any Fifth Amendment right against self-incrimination). Indeed, even if they had, the Court could consider it. See also, El-Dehdan v. El-Dehdan, 26 NY3d 19, 37 (2015)(negative inference permitted in civil action).

The Court has considered respondent's additional arguments (including, without limitation, respondent's lack of standing argument), and finds them unavailing.

The Court finds that the premises were being used for an illegal trade or business (to wit, the unlicensed sale of cannabis), and pursuant to Real Property Law § 231(1), the lease is void. The Court declines to award use and occupancy during the life of this voided lease, without prejudice to seeking such monetary damages in a plenary action.

ORDERED that the Clerk shall enter judgment of possession in favor of petitioner and against respondents 34 Green Olive Deli Corp. and ABC Corp., warrant to issue forthwith, earliest eviction date February 27, 2026.: and it is further

ORDERED that any claims for money are severed and dismissed without prejudice and reserved for a plenary action; and it is further

ORDERED that petitioner shall serve a copy of this decision and order with notice of entry upon respondent within 10 days of the Court uploading to NYSCEF.

This constitutes the decision and order of the Court.

DATED: February 13, 2026

New York, NY

ENTER:

HON. JEFFREY S. ZELLAN, A.J.S.C.

Jeffrey S. Zellan, J.