Landlord & Tenant

Habitability Claim Raises Issues of Fact

Witherbee Court Associates v. Greene

NYLJ 5/28/04, p. 27, col. 2

AppDiv, Second Dept

(memorandum opinion)

In an action by a landlord for unpaid rent, the tenant appealed from a Supreme Court judgment dismissing the tenant's counterclaim for breach of the implied warranty of habitability. The Appellate Division modified to reinstate the counterclaim, holding that the evidence adduced at trial was sufficient to raise questions of fact about breach.

Tenants have occupied the subject apartment since 1991. The landlord converted the building to condominium ownership in 1994, pursuant to a non-eviction plan. In 1998, the landlord tendered a renewal lease with a rent increase from $2150 to $2400 per month. The tenant, believing the increase was unwarranted, declined to execute the lease, but remained in possession, initially paying the old, lower rental amount. On Oct. 1, 1999, the tenant began withholding rent. When the landlord sold the unit to a third party in June 2000, the landlord brought this nonpayment action, seeking rent arrears for the period between October 1999 and June 2000. The tenant counterclaimed, alleging breach of the implied warranty of habitability. After a jury trial, the Supreme Court dismissed the counterclaim as a matter of law, and the jury awarded the landlord the accrued rent. The tenant appealed.

In holding that the Supreme Court had erroneously dismissed the counterclaim, the court noted that even though the tenant's failure to execute the renewal lease and subsequent failure to pay rent had converted the parties' relationship into a month-to-month tenancy, the warranty of habitability continued to apply. Here, evidence adduced at trial was sufficient to establish a prima facie case of breach of warranty, as tenant testified, supported by photographs, that some radiators and the oven were broken, that sinks and toilets were not fully operational, and that windows were cracked. On this evidence, a rational fact finder could have concluded that landlord had breached the warranty. As a result, the court remanded for a new trial

Landlord Who Serves Notice to Cure By Mail Must Add 5 Days to Cure Period

Matter of ATM One, LLC v. Landaverde

NYLJ 6/4/04, p. 19, col. 1

Court of Appeals

(Opinion by Graffeo, J.)

In a landlord's summary holdover proceeding against a rent-stabilized tenant, the landlord appealed from affirmance of an order dismissing the proceeding because the landlord's notice to cure did not the give tenant a full 10 days to cure specified violations. The Court of Appeals affirmed, holding that when a landlord serves a notice to cure by mail, that landlord must add 5 days to the 10-day period in order to assure that the tenant has the requisite period to cure.

On Sept. 8, 2000, the landlord mailed to the tenant a “Notice of Default,” which included a 10-day notice to cure, and a 30-day notice of cancellation. The notice alleged overcrowding of the one-bedroom apartment in violation of the lease. The notice set a date certain of Sept. 18 for cure. The tenant received the notice on Sept. 9. Once the 30-day cancellation period expired, the landlord brought a holdover proceeding, and the tenant moved to dismiss on the ground that she had not received the 10-day opportunity to cure. The Nassau County District Court ground the motion, borrowing from CPLR 2103 the concept that owners must add 5 days to any prescribed period when serving by mail. The Appellate Term affirmed, but rejected the District Court's approach and held that service should be deemed complete on delivery, which in this case was only 9 days before the date set for cure. A divided Appellate Division affirmed, the majority agreeing with the Appellate Term, and two dissenters voting to reinstate the petition, arguing that DHCR's regulation established that the date of service is the date the notice was mailed. The landlord appealed.

In affirming, the Court of Appeals noted that DHCR's regulations do not expressly provide when service of a notice to cure becomes complete when service is effectuated by mail. The court then concluded that the District Court's approach was preferable because it accomplishes two ends: first, it assures that tenants receive 10 days to cure, and second, it avoids uncertainty inherent in the Appellate Division and Appellate Term rule, which makes it difficult for both landlords and courts to determine when service was actually complete. As a result, the court held that, as in the CPLR 2103, which by its terms is not applicable to summary proceedings, 5 days should be added to the date of mailing in computing the minimum 10-day cure period. The court urged DHCR to amend its regulations consistent with the court's determination.

Illegal Loft Tenants Not Protected By ETPA

Wolinsky v. Kee Yip Realty Corp.

NYLJ 6/9/04, p. 20, col. 2

Court of Appeals

(Opinion by Graffeo, J.)

In an action by loft tenants for an injunction and for a declaration that they are protected by the Rent Stabilization Law and the Rent Stabilization Code, tenants appealed from an Appellate Division order declaring that the tenancies are not covered by rent stabilization. The Court of Appeals affirmed, concluding that the Emergency Tenant Protection Act (ETPA) does not protect tenants who illegally converted loft space for residential use after the “window period” in the Loft Law.

The subject seven-story commercial building is located in a zoning district that permits use for light manufacturing and for joint living/work space for artists. To assure adequate area for industrial growth, the zoning ordinance does not permit ordinary residential occupancy in the district. Nevertheless, in 1997, the landlord entered into commercial leases with the tenants for the rental of raw loft space on the second through the seventh floors of the building. The tenants then renovated their units for residential use, despite the absence of a residential certificate of occupancy. As the expiration of their commercial leases approached, the tenants brought this action, contending that they are protected against eviction through the ETPA. The landlord sought summary judgment dismissing the complaint, contending that the building could not legally be converted to residential use. The Supreme Court granted the landlord's motion, and the Appellate Division modified only to the extent of declaring that the tenancies are not covered by the ETPA. Tenants appealed.

In affirming, the Court of Appeals noted that the Loft Law, article 7-C of the Multiple Dwelling Law, permits conversion of interim multiple dwellings occupied for residential purposes from April 1, 1980 through Dec. 1, 1981 (the window period). The court recognized that the subject units were not converted to residential use until almost 2 decades after expiration of the window period. The Loft Law was not, in the court's view, intended to foster future illegal conversions or to undermine municipal zoning prerogatives. The court also noted that the ETPA could not be read to cover illegally converted loft units, because such a reading would have made the Loft Law entirely unnecessary. As a result, the court concluded that the ETPA does not apply to these illegally-converted loft units.

City As Tenant Liable for Structural Repairs

Sonny Boy Realty, Inc. v. City of New York

NYLJ 6/28/04, p. 26, col. 2

AppDiv, First Dept

(3-1 decision; memorandum opinion; dissenting memorandum by Buckley, J)

In an action by landlord against the City of New York as tenant, the landlord appealed from the Supreme Court's grant of summary judgment to the city on the landlord's claim for structural repairs necessitated by the city's negligent acts. The Appellate Division reversed, concluding that the lease implicitly provided that the city would be liable for structural repairs necessitated by the city's negligence.

The lease provided that the landlord would “make all exterior and structural repairs, excluding such repairs necessitated by the negligence of tenant and its invitees.” The city used the premises as a group home for children, and a fire started by one of the group home's residents resulted in damages to the premises. The landlord then brought this action to recover for the costs of structural repairs made necessary by the fire. The Supreme Court granted summary judgment to the city, holding that the lease imposed no affirmative obligation on the city.

In reversing, the Appellate Division majority concluded that the only rational conclusion to be drawn from the disputed lease provision was that the lease imposed a “coexistent obligation on the part of the tenant to make all exterior and structural repairs necessitated by its negligence and the negligence of its invitees.” As a result, the court held that the city's motion should have been denied. Justice Buckley, dissenting, read the disputed provision as relieving landlord of any obligation to make structural repairs, but not as imposing an affirmative obligation on the city.

Common Ownership Insufficient to Establish Horizontal Multiple Dwelling

In re 721 Ninth Avenue, LLC v. New York State Division of Housing and Community Renewal

NYLJ 6/10/04, p. 26, col. 3

AppDiv, First Dept

(memorandum opinion)

In the landlord's article 78 proceeding to annul DHCR's determination that two adjacent buildings constituted a single horizontal multiple dwelling (HMD), the landlord appealed from the Supreme Court's denial of the petition. The Appellate Division reversed and granted the petition, holding that common ownership of the buildings was not sufficient to treat them as an HMD.

The landlord owns two adjacent buildings at Ninth Avenue and 49th Street in Manhattan, one with four units and the other with three. In 1996, tenants in one of the buildings submitted an application to DHCR requesting a determination that their apartment was subject to rent stabilization because the two buildings were a HMD comprising six or more units. Although in a prior proceeding involving the same buildings, DHCR had concluded that the buildings were not an HMD, DHCR determined in this case that the two buildings were an HMD. DHCR then denied landlord's petition for administrative review. The landlord then brought this article 78 proceeding. From Supreme Court's dismissal of the proceeding, landlord appealed.

The Appellate Division started by rejecting the landlord's argument that DHCR was estopped by its conclusion in the proceeding brought by another tenant. But the court then turned to the merits of the HMD claim, and noted that the two buildings had separate boilers, electric meters, water lines, sewer lines, gas lines, fire escapes, entrance doors, and certificates of occupancy. On these facts, the court concluded that DHCR's determination was irrational, and inconsistent both with DHCR's past practice and with judicial precedents. As a result, the court granted the landlord's petition and annulled DHCR's determination.

Tenant Entitled to Yellowstone Injunction

TSI West 14th, Inc. v. Samson Associates

NYLJ 6/10/04, p. 27, col. 1

AppDiv, First Dept

(memorandum opinion)

In an action by a commercial tenant seeking a declaration that it was not in default of the lease, the tenant appealed from the Supreme Court's denial of its motion for a Yellowstone injunction. The Appellate Division reversed and granted the motion, holding that tenant had demonstrated both the ability and the desire to cure any default in its performance of lease obligations.

The tenant leased the two bottom floors of a commercial building for use as a fitness center. The tenant's lease provided that tenant would not make or allow to be made any noise or vibration that would interfere with the use and occupancy of the building's other tenants. Soon after the tenant began operating the fitness center, the landlord complained about noise and vibrations. Although the tenant then spent more than $100,000 to rectify the situation, the landlord served the tenant with a 15-day notice to cure, alleging violation of the lease prohibition on noise and vibration. The tenant then brought this action, and sought a Yellowstone injunction restraining the landlord from terminating the tenancy on the basis of the alleged default. In a supporting affidavit, the tenant's representative contended that the tenant was not in default, but that the tenant had both the desire and the ability to cure in the event a court concluded that cure was necessary. The landlord disputed these assertions, contending that all of the tenant's remediation efforts predated notice to cure, and that the tenant had not seriously addressed noise issues. The Supreme Court denied the tenant's motion for a Yellowstone injunction, concluding that the tenant had not demonstrated a readiness, willingness, and ability to cure any default.

In reversing, the Appellate Division found no support in the record for the Supreme Court's conclusion that the tenant's position is that having spent more than $100,000, it need do no more. Although tenant has contested the need to make additional repairs, the tenant has also represented that it is prepared to repair any defective condition found by the court. As a result, tenant is entitled to a Yellowstone injunction.

Habitability Claim Raises Issues of Fact

Witherbee Court Associates v. Greene

NYLJ 5/28/04, p. 27, col. 2

AppDiv, Second Dept

(memorandum opinion)

In an action by a landlord for unpaid rent, the tenant appealed from a Supreme Court judgment dismissing the tenant's counterclaim for breach of the implied warranty of habitability. The Appellate Division modified to reinstate the counterclaim, holding that the evidence adduced at trial was sufficient to raise questions of fact about breach.

Tenants have occupied the subject apartment since 1991. The landlord converted the building to condominium ownership in 1994, pursuant to a non-eviction plan. In 1998, the landlord tendered a renewal lease with a rent increase from $2150 to $2400 per month. The tenant, believing the increase was unwarranted, declined to execute the lease, but remained in possession, initially paying the old, lower rental amount. On Oct. 1, 1999, the tenant began withholding rent. When the landlord sold the unit to a third party in June 2000, the landlord brought this nonpayment action, seeking rent arrears for the period between October 1999 and June 2000. The tenant counterclaimed, alleging breach of the implied warranty of habitability. After a jury trial, the Supreme Court dismissed the counterclaim as a matter of law, and the jury awarded the landlord the accrued rent. The tenant appealed.

In holding that the Supreme Court had erroneously dismissed the counterclaim, the court noted that even though the tenant's failure to execute the renewal lease and subsequent failure to pay rent had converted the parties' relationship into a month-to-month tenancy, the warranty of habitability continued to apply. Here, evidence adduced at trial was sufficient to establish a prima facie case of breach of warranty, as tenant testified, supported by photographs, that some radiators and the oven were broken, that sinks and toilets were not fully operational, and that windows were cracked. On this evidence, a rational fact finder could have concluded that landlord had breached the warranty. As a result, the court remanded for a new trial

Landlord Who Serves Notice to Cure By Mail Must Add 5 Days to Cure Period

Matter of ATM One, LLC v. Landaverde

NYLJ 6/4/04, p. 19, col. 1

Court of Appeals

(Opinion by Graffeo, J.)

In a landlord's summary holdover proceeding against a rent-stabilized tenant, the landlord appealed from affirmance of an order dismissing the proceeding because the landlord's notice to cure did not the give tenant a full 10 days to cure specified violations. The Court of Appeals affirmed, holding that when a landlord serves a notice to cure by mail, that landlord must add 5 days to the 10-day period in order to assure that the tenant has the requisite period to cure.

On Sept. 8, 2000, the landlord mailed to the tenant a “Notice of Default,” which included a 10-day notice to cure, and a 30-day notice of cancellation. The notice alleged overcrowding of the one-bedroom apartment in violation of the lease. The notice set a date certain of Sept. 18 for cure. The tenant received the notice on Sept. 9. Once the 30-day cancellation period expired, the landlord brought a holdover proceeding, and the tenant moved to dismiss on the ground that she had not received the 10-day opportunity to cure. The Nassau County District Court ground the motion, borrowing from CPLR 2103 the concept that owners must add 5 days to any prescribed period when serving by mail. The Appellate Term affirmed, but rejected the District Court's approach and held that service should be deemed complete on delivery, which in this case was only 9 days before the date set for cure. A divided Appellate Division affirmed, the majority agreeing with the Appellate Term, and two dissenters voting to reinstate the petition, arguing that DHCR's regulation established that the date of service is the date the notice was mailed. The landlord appealed.

In affirming, the Court of Appeals noted that DHCR's regulations do not expressly provide when service of a notice to cure becomes complete when service is effectuated by mail. The court then concluded that the District Court's approach was preferable because it accomplishes two ends: first, it assures that tenants receive 10 days to cure, and second, it avoids uncertainty inherent in the Appellate Division and Appellate Term rule, which makes it difficult for both landlords and courts to determine when service was actually complete. As a result, the court held that, as in the CPLR 2103, which by its terms is not applicable to summary proceedings, 5 days should be added to the date of mailing in computing the minimum 10-day cure period. The court urged DHCR to amend its regulations consistent with the court's determination.

Illegal Loft Tenants Not Protected By ETPA

Wolinsky v. Kee Yip Realty Corp.

NYLJ 6/9/04, p. 20, col. 2

Court of Appeals

(Opinion by Graffeo, J.)

In an action by loft tenants for an injunction and for a declaration that they are protected by the Rent Stabilization Law and the Rent Stabilization Code, tenants appealed from an Appellate Division order declaring that the tenancies are not covered by rent stabilization. The Court of Appeals affirmed, concluding that the Emergency Tenant Protection Act (ETPA) does not protect tenants who illegally converted loft space for residential use after the “window period” in the Loft Law.

The subject seven-story commercial building is located in a zoning district that permits use for light manufacturing and for joint living/work space for artists. To assure adequate area for industrial growth, the zoning ordinance does not permit ordinary residential occupancy in the district. Nevertheless, in 1997, the landlord entered into commercial leases with the tenants for the rental of raw loft space on the second through the seventh floors of the building. The tenants then renovated their units for residential use, despite the absence of a residential certificate of occupancy. As the expiration of their commercial leases approached, the tenants brought this action, contending that they are protected against eviction through the ETPA. The landlord sought summary judgment dismissing the complaint, contending that the building could not legally be converted to residential use. The Supreme Court granted the landlord's motion, and the Appellate Division modified only to the extent of declaring that the tenancies are not covered by the ETPA. Tenants appealed.

In affirming, the Court of Appeals noted that the Loft Law, article 7-C of the Multiple Dwelling Law, permits conversion of interim multiple dwellings occupied for residential purposes from April 1, 1980 through Dec. 1, 1981 (the window period). The court recognized that the subject units were not converted to residential use until almost 2 decades after expiration of the window period. The Loft Law was not, in the court's view, intended to foster future illegal conversions or to undermine municipal zoning prerogatives. The court also noted that the ETPA could not be read to cover illegally converted loft units, because such a reading would have made the Loft Law entirely unnecessary. As a result, the court concluded that the ETPA does not apply to these illegally-converted loft units.

City As Tenant Liable for Structural Repairs

Sonny Boy Realty, Inc. v. City of New York

NYLJ 6/28/04, p. 26, col. 2

AppDiv, First Dept

(3-1 decision; memorandum opinion; dissenting memorandum by Buckley, J)

In an action by landlord against the City of New York as tenant, the landlord appealed from the Supreme Court's grant of summary judgment to the city on the landlord's claim for structural repairs necessitated by the city's negligent acts. The Appellate Division reversed, concluding that the lease implicitly provided that the city would be liable for structural repairs necessitated by the city's negligence.

The lease provided that the landlord would “make all exterior and structural repairs, excluding such repairs necessitated by the negligence of tenant and its invitees.” The city used the premises as a group home for children, and a fire started by one of the group home's residents resulted in damages to the premises. The landlord then brought this action to recover for the costs of structural repairs made necessary by the fire. The Supreme Court granted summary judgment to the city, holding that the lease imposed no affirmative obligation on the city.

In reversing, the Appellate Division majority concluded that the only rational conclusion to be drawn from the disputed lease provision was that the lease imposed a “coexistent obligation on the part of the tenant to make all exterior and structural repairs necessitated by its negligence and the negligence of its invitees.” As a result, the court held that the city's motion should have been denied. Justice Buckley, dissenting, read the disputed provision as relieving landlord of any obligation to make structural repairs, but not as imposing an affirmative obligation on the city.

Common Ownership Insufficient to Establish Horizontal Multiple Dwelling

In re 721 Ninth Avenue, LLC v. New York State Division of Housing and Community Renewal

NYLJ 6/10/04, p. 26, col. 3

AppDiv, First Dept

(memorandum opinion)

In the landlord's article 78 proceeding to annul DHCR's determination that two adjacent buildings constituted a single horizontal multiple dwelling (HMD), the landlord appealed from the Supreme Court's denial of the petition. The Appellate Division reversed and granted the petition, holding that common ownership of the buildings was not sufficient to treat them as an HMD.

The landlord owns two adjacent buildings at Ninth Avenue and 49th Street in Manhattan, one with four units and the other with three. In 1996, tenants in one of the buildings submitted an application to DHCR requesting a determination that their apartment was subject to rent stabilization because the two buildings were a HMD comprising six or more units. Although in a prior proceeding involving the same buildings, DHCR had concluded that the buildings were not an HMD, DHCR determined in this case that the two buildings were an HMD. DHCR then denied landlord's petition for administrative review. The landlord then brought this article 78 proceeding. From Supreme Court's dismissal of the proceeding, landlord appealed.

The Appellate Division started by rejecting the landlord's argument that DHCR was estopped by its conclusion in the proceeding brought by another tenant. But the court then turned to the merits of the HMD claim, and noted that the two buildings had separate boilers, electric meters, water lines, sewer lines, gas lines, fire escapes, entrance doors, and certificates of occupancy. On these facts, the court concluded that DHCR's determination was irrational, and inconsistent both with DHCR's past practice and with judicial precedents. As a result, the court granted the landlord's petition and annulled DHCR's determination.

Tenant Entitled to Yellowstone Injunction

TSI West 14th, Inc. v. Samson Associates

NYLJ 6/10/04, p. 27, col. 1

AppDiv, First Dept

(memorandum opinion)

In an action by a commercial tenant seeking a declaration that it was not in default of the lease, the tenant appealed from the Supreme Court's denial of its motion for a Yellowstone injunction. The Appellate Division reversed and granted the motion, holding that tenant had demonstrated both the ability and the desire to cure any default in its performance of lease obligations.

The tenant leased the two bottom floors of a commercial building for use as a fitness center. The tenant's lease provided that tenant would not make or allow to be made any noise or vibration that would interfere with the use and occupancy of the building's other tenants. Soon after the tenant began operating the fitness center, the landlord complained about noise and vibrations. Although the tenant then spent more than $100,000 to rectify the situation, the landlord served the tenant with a 15-day notice to cure, alleging violation of the lease prohibition on noise and vibration. The tenant then brought this action, and sought a Yellowstone injunction restraining the landlord from terminating the tenancy on the basis of the alleged default. In a supporting affidavit, the tenant's representative contended that the tenant was not in default, but that the tenant had both the desire and the ability to cure in the event a court concluded that cure was necessary. The landlord disputed these assertions, contending that all of the tenant's remediation efforts predated notice to cure, and that the tenant had not seriously addressed noise issues. The Supreme Court denied the tenant's motion for a Yellowstone injunction, concluding that the tenant had not demonstrated a readiness, willingness, and ability to cure any default.

In reversing, the Appellate Division found no support in the record for the Supreme Court's conclusion that the tenant's position is that having spent more than $100,000, it need do no more. Although tenant has contested the need to make additional repairs, the tenant has also represented that it is prepared to repair any defective condition found by the court. As a result, tenant is entitled to a Yellowstone injunction.