“As-Is” Means “As-Is”: Manlius Center Road Associates, LLC v. Singh and the Reinforced Enforceability of Commercial Lease Disclaimer Clauses Absent True Latent Defect

1. Introduction

Manlius Center Road Associates, LLC v. Singh (2025 NY Slip Op 03426) is a Fourth Department Appellate Division decision that refines New York’s jurisprudence on the enforceability of “as-is” clauses in commercial leases and the difficulty tenants face when attempting to avoid contractual obligations on grounds of mistake, fraud, or frustration of purpose. The litigation arose when Liquor World of Syracuse, Inc. (“Liquor World”) leased a portion of a commercial building owned by Manlius Center Road Associates, LLC (“Landlord”) but later refused to pay rent after learning that an interior wall it wished to remove was load-bearing and therefore more costly to demolish than anticipated.

Key issues before the Court included:

Whether the tenant could rely on theories of mutual mistake, unilateral mistake, fraudulent inducement, or frustration of purpose to void or escape obligations under the lease.
Whether the landlord was entitled to judgment as a matter of law on its breach-of-contract claim despite the tenant’s defenses.
Whether individuals associated with the tenant corporation could be dismissed from the suit for lack of privity.

2. Summary of the Judgment

The Appellate Division modified the Supreme Court’s order by granting partial summary judgment for the landlord on liability against Liquor World for breach of contract. The Court held:

The landlord demonstrated all elements of breach of contract: existence of the lease, landlord’s performance, tenant’s non-payment, and resultant damages.
The “as-is” clause barred the tenant’s claim that the load-bearing wall constituted a latent defect; no evidence showed the wall was defective—only that removal would be costlier than expected.
The tenant failed to establish mutual or unilateral mistake, fraudulent inducement, or frustration of purpose, largely because the landlord disclosed the “as-is” condition and offered inspection prior to leasing.
The matter was remitted to determine unresolved portions of defendants’ motion seeking dismissal of claims against the individual defendants and a related corporate entity.

3. Analysis

3.1 Precedents Cited and Their Influence

Arista Dev., LLC v. Clearmind Holdings, LLC, 207 A.D.3d 1127 (4th Dept 2022) – Reiterated the four basic elements of a breach of contract cause of action, providing the analytical framework the Court used to grant the landlord summary judgment.
Niagara Foods, Inc. v. Ferguson Elec. Serv. Co., Inc., 111 A.D.3d 1374 (4th Dept 2013) – Cited for the same elements of breach and the standard for a plaintiff’s prima facie burden on summary judgment.
Medlock Crossing Shopping Ctr. Duluth, GA, LP v. Kitchen & Bath Studio, Inc., 126 A.D.3d 1463 (4th Dept 2015) – Demonstrated that production of a lease agreement plus evidence of unpaid rent suffices to shift the burden to the tenant.
Zuckerman v. City of New York, 49 N.Y.2d 557 (1980) – The seminal New York case on the summary-judgment burden-shifting paradigm (“demonstrate by admissible evidence the existence of a factual issue”).
228 W 72 LLC v. 228A W. 72 LLC, 213 A.D.3d 608 (1st Dept 2023) & Rivietz v. Wolohojian, 38 A.D.3d 301 (1st Dept 2007) – Both uphold the validity of “as-is” clauses to defeat tenant claims where no hidden defect exists.
Matter of Gould v. Bd. of Educ. of Sewanhaka C.H.S. Dist., 81 N.Y.2d 446 (1993) – Articulated the requirements for mutual mistake; the Court applied Gould to hold that a mistake must be “substantial” and exist at contract inception.
Trahwen, LLC v. Ming 99 Cent City #7, Inc., 106 A.D.3d 1467 (4th Dept 2013) – Provides the elements for fraudulent inducement; the Court found no misrepresentation comparable to Trahwen.
Village of Waterford v. Camproni, 200 A.D.2d 930 (3d Dept 1994) & Long v. Fitzgerald, 240 A.D.2d 971 (3d Dept 1997) – Supply the stringent criteria for voiding a contract based on unilateral mistake, which the defendants could not satisfy.
International Dev. Inst., Inc. v. Westchester Plaza, LLC, 194 A.D.3d 411 (1st Dept 2021) – Reinforces the obligation of sophisticated commercial parties to conduct adequate due diligence.

3.2 Legal Reasoning

Breach-of-Contract Framework
After citing Arista Development, the Court confirmed that prima facie proof of the executed lease, the landlord’s performance (delivery of premises), and nonpayment of rent shifts the burden.
Effect of the “As-Is, Except Latent Defects” Clause
• A wall’s load-bearing status, absent structural failure, is not a latent defect; it merely affects renovation cost.
• The tenant failed to produce expert evidence that the wall was unsafe or violated building codes.
• Consequently, the “as-is” disclaimer remained operative.
No Mutual Mistake
• The landlord actually knew the wall was load-bearing and offered inspection.
• The tenant’s mistaken belief, without shared misapprehension, cannot constitute mutual mistake.
No Fraudulent Inducement
• No affirmative misrepresentation or concealment was shown.
• The specificity of the “as-is” clause rendered any generalized reliance on representations unreasonable, consistent with S.R. Leon Co. v. The Towers, 194 A.D.2d 600 (2d Dept 1993).
Unilateral Mistake & Frustration of Purpose
• The tenant, a sophisticated commercial actor, did not exercise ordinary care—an element that Long v. Fitzgerald makes indispensable.
• Removal of a load-bearing wall relates to the cost of performance, not to an event rendering performance “virtually worthless” as frustration cases typically require.

3.3 Impact on Future Cases and Commercial Leasing

Heightened Due Diligence Expectation: Commercial tenants planning significant renovations must now anticipate that courts will strictly enforce “as-is” clauses, unless they can show a bona fide latent defect affecting habitability or structural integrity.
Narrowing of “Latent Defect”: Load-bearing characteristics or other ordinary building conditions will not qualify as latent defects merely because they are hidden or expensive to remedy.
Difficulty of Mistake-Based Defenses: The decision reiterates the rarity of successful mutual or unilateral mistake defenses absent shared misconception and/or inequitable conduct.
Strategic Lease Drafting: Landlords will likely insert clearer “as-is” and inspection clauses; tenants should negotiate express build-out contingencies or conditions precedent to mitigate risk.
Procedural Significance: Demonstrates that partial summary judgment on liability can be granted even while damages and personal-liability questions remain, streamlining litigation.

4. Complex Concepts Simplified

“As-Is” Clause: A lease provision stating the tenant accepts the premises in its present condition, relieving the landlord of duty to repair or disclose known patent conditions.
Latent Defect: A hidden flaw that could not be discovered by reasonable inspection (e.g., concealed mold, faulty wiring). Not every unseen condition qualifies.
Summary Judgment: A procedural device to obtain judgment without trial where no genuine dispute of material fact exists.
Mutual vs. Unilateral Mistake: Mutual mistake involves both parties sharing the same erroneous assumption at contract formation; unilateral mistake involves only one party’s error and rarely voids a contract absent fraud or unconscionability.
Frustration of Purpose: A doctrine excusing performance when an unforeseen event destroys the contract’s primary purpose for both parties—not merely increases cost.
Burden Shifting: In summary-judgment motions, once the moving party establishes entitlement to judgment, the burden shifts to the opponent to raise a triable issue of fact with competent evidence.

5. Conclusion

Manlius Center Road Associates, LLC v. Singh crystallizes the principle that an “as-is” commercial lease, read in conjunction with a tenant’s opportunity to inspect, will be strictly enforced absent evidence of a true latent defect or fraudulent concealment. The decision underscores the high evidentiary bar for tenants seeking to invoke mistake- or fraud-based defenses and clarifies that cost overruns tied to ordinary structural conditions do not excuse rent obligations. Going forward, parties to commercial leases in New York must perform rigorous due diligence and craft explicit contractual safeguards, as courts will not readily rescue them from unfavorable bargains struck at arm’s length.