A New York tenant who intended to operate a store for the sale of pornographic materials has an affirmative duty to disclose that fact to the landlord, because such a store may have an adverse impact on neighboring properties.

When the tenant responded to the landlord’s ad for a vacant store for rent, he stated that he planned to sell videos. However, he did not disclose that he planned to sell adult magazines and videos and to operate video booths showing pornographic films.

When the landlord’s contractor was remodeling the store to suit the tenants purposes, he discovered the tenant’s plans and informed the landlord. The landlord changed the locks and sued the tenant to rescind the contract and recover the damages.

The New York Supreme Court, Duchess County awarded judgment to the landlord holding that he was entitled to rescind the contract on the grounds of fraud. The court found that the tenant’s representation to the landlord that he would be selling videos and magazines, without specifying their type and his affirmative answer to the landlord’s question as to whether tenant’s business was like another business that sold children’s videos, constituted fraud.

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