Practice point: A contractual provision which provides that the tenant must pay attorneys' fees if it commences an action against the landlord based on the landlord's default is unconscionable and unenforceable as a penalty.
Student note: Parties to a lease may contract for reasonable attorneys' fees provided that they are not in the nature of penalty or forfeiture. Whether a fees provision is an unenforceable penalty is a question of law. A finding of unconscionability requires a showing of an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.
Matter of Krodel v. Amalgamated Dwellings Inc., NY Slip Op 07531 (1st Dep't November 8, 2018)
Here is the decision.
