liquidated damages clause is absolute and unjustly enriches one party over another, such
a clause should be considered unconscionable and held unenforceable by law because
same constitutes a penalty, (see, 3 Dolan, Rasch's Landlord and
Tenant—Summary Proceedings, § 6.13, at 282 [4th Ed] ).
In Rossrock Fund II LP v. Arroyo, 34 Misc 3d 1211(A), 2012 WL 127444
(NY Sup.) a forbearance agreement in a foreclosure action was rescinded on the grounds
of unconscionability. The Court (J. Steinhart) concluded that case authority reveals " two
major elements which have been labeled by commentators [as] procedural and
substantive unconscionability" (State of New York v. Wolowitz, 96 AD2d 47, 67
[1983] ). "The procedural element of unconscionability concerns the contract formation
process and the alleged lack of meaningful choice; the substantive element looks to the
content of the contract, per se" (State of New York v. Wolowitz, 96 AD2d at 67; see Lawrence v. Graubard
Miller, 11 NY3d 588, 595 [2008] ). Examples of procedural unconscionability
"include, but are certainly not limited to, high pressure commercial tactics, inequality of
bargaining power, deceptive [*21]practices and language
in the contract, and an imbalance in the understanding and acumen of the parties"
(State of New York v. Wolowitz, 96 AD2d at 67). "Examples of unreasonably
favorable contractual provisions are virtually limitless but include inflated prices, unfair
termination clauses, unfair limitations on consequential damages and improper
disclaimers of warranty" (id. at 67—68).
Having said all of the above, in summary, late charges are recoverable;
however, the amount of a late charge, when awarded, must be reasonable and
nonpunitive, and must bear some reasonable relationship to the amount of rent involved.