Landlord & Tenant

Court of Appeals

(opinion by Ciparick, J.)

In a landlord's action for breach of the lease, the tenant appealed from the Appellate Division's reversal of the Supreme Court's denial of the landlord's summary judgment motion. The Court of Appeals affirmed, holding that a lease provision requiring the tenant to return the “premises” in good order and condition referred only to the interior of the buildings, and not the land.

IBM has leased the subject land and building since the 1950s for use in its commercial and manufacturing operations. The current lease, executed in 1981, requires the tenant to return the “premises” in “good order and condition.” During its occupation, IBM installed an underground storage tank to hold chemical waste. IBM's own investigations later revealed groundwater contamination resulting from a leak in the tank. In 1984, IBM accepted responsibility for the pollution, agreeing to abate the pollution to the satisfaction of all governmental agencies, and agreeing to hold landlord harmless for any resulting claims. The parties later agreed that at the termination of the lease, IBM would have a right of access to maintain and operate its monitoring wells and groundwater treatment system. The landlord does not contend that IBM breached these agreements, but brought this action contending that IBM had breached the provision in the lease that requires return of the premises in good order and condition. Both parties moved for summary judgment, and the Supreme Court granted the landlord's motion. The Appellate Division reversed, one justice dissenting, and the tenant appealed.

In affirming, the Court of Appeals relied exclusively on the language of the lease, and concluded that the lease's reference to “premises” unambiguously referred to the building, not to the land. The court relied on a provision of the lease stating that “the premises” is the space shown on a floor plan, consisting of specified square feet “in buildings.” The court also noted that the lease mentions the premises separately from the water tower, appurtenances, land, parking lot, and buildings, and reasoned that the language in these provisions would be superfluous if the premises were intended to include all buildings and land. The court emphasized in particular a provision prohibiting signs on the land or the outside of the building, but permitting them on the entrance doors to the premises. This language, the court held, clearly distinguished premises — as interior space — from the land and exterior portions of the building. The court concluded, therefore, that the lease was clear on its face, making resort to extrinsic evidence impermissible. As a result, the landlord was entitled to summary judgment dismissing the complaint.

Failure to Repair Can Constitute Constructive Eviction

34-35th Corp. v. 1-10

Industry Associates, LLC

NYLJ 3/28/05, p. 34, col. 4

AppDiv, Second Dept

(memorandum opinion)

In a tenant's action for damages for breach of the lease, the landlord appealed from the Supreme Court's grant of partial summary judgment to the tenant on the issue of liability. The Appellate Division modified to deny summary judgment with respect to certain breach of contract issues, and otherwise affirmed.

The lease required the landlord to install 600-amp electric service, to block existing openings, and to install six windows in the leased commercial premises. The landlord did not perform these obligations, contending that it made efforts to block the openings and to install windows, but the parties could not agree on a feasible location. Hence, the court concluded that the case raised factual issues about whether the tenant breached the covenant of good faith and fair dealing, and whether the landlord made reasonable efforts to comply.

The parties also agreed that there were leaks on the premises, and the tenant contends that the landlord's failure to plug the leaks constituted a breach of the covenant of quiet enjoyment. The court noted that to establish breach of the covenant of quiet enjoyment, the tenant would have to show actual or constructive eviction. The court went further and indicated that failure to repair can constitute actual or constructive eviction. In this case, however, there was evidence that the landlord made repairs in an effort to cure the problem. Whether those efforts were sufficient constitutes a triable issue of fact for the jury to determine.

COMMENT

New York courts have relaxed the rule that once required a tenant to vacate the subject premises in order to maintain a claim for constructive eviction. The early rule appears in Barash v. Pennsylvania Terminal Real Estate Corp., 26 N.Y.2d 77, where the Court of Appeals refused to uphold the tenant's constructive eviction defense because the tenant had remained in possession of the premises The Barash court noted that it is inequitable to permit a tenant to claim substantial interference and withhold payment of rent while that tenant remains in possession. In Barash, the complaining tenant alleged that the landlord's failure to provide the promised 24-hour ventilation made the subject office space uncomfortable and uninhabitable. Because the tenant had not abandoned the subject premises, it was barred from claiming constructive eviction.

Almost immediately after the Court of Appeals' decision in Barash, other New York courts began to carve out exceptions to the rule requiring abandonment as a condition precedent to a claim for constructive eviction. In East Haven Associates Inc. v. Gurian, 64 Misc. 2d 276, the court held that, to maintain a claim of constructive eviction, a tenant need only abandon that part of the premises made uninhabitable by the landlord's wrongful acts. The tenant in Gurian had abandoned a terrace when the landlord permitted it to become contaminated by water overflow and ash from the incinerator. In Minjak Co. v. Randolph, 140 A.D.2d 245, the Appellate Division noted that, when a tenant is constructively evicted from a portion of the subject premises, but remains in possession of another portion, the tenant is not obligated to continue payment of the full amount of the rent. The tenants in Randolph abandoned only part of the subject premises after the landlord's construction work caused debris to rain down on portions of the tenants' commercial loft, and the court upheld a rent abatement to the extent of the portion of the loft rendered unusable by the landlord's acts.

To maintain an action for breach of the covenant of quiet enjoyment, a tenant must generally establish either an actual or constructive eviction. In Dave Herstein Co. v. Columbia Pictures Corp., 4 N.Y.2d 117, the Court of Appeals noted that in actions for breach of the covenant of quiet enjoyment, the tenant must either show an ouster from the subject premises, or, if the claim arises out of a constructive eviction, an abandonment of all or part of the premises. However, the court added that it is not necessary to show ouster if the landlord has covenanted, and subsequently failed, to perform a specific obligation. This view was reinforced in Dinicu v. Groff Studios Corp., 257 A.D.2d 218, where the Appellate Division noted that, to prove constructive eviction, a lessee need only prove that a part of the premises cannot be used for its intended purpose, and must be abandoned as a result. In Dinicu, a tenant covenanted to use the subject premises as a combination residence and dance studio. When the landlord, under pressure from other tenants, subsequently forbade use of the premises as a studio, the tenant prevailed in a claim for breach of the covenant of quiet enjoyment on the basis of a partial constructive eviction.

34-35th Corp. is unusual because the court appeared prepared to find a breach of the covenant of quiet enjoyment without any discussion of the tenant's abandonment of any part of the premises.

Failure to Register Premises As Multiple Dwelling

Czerwinski v. Hayes

NYLJ 4/5/05, p. 2., col.

AppTerm, 2nd and 11th Districts

(memorandum opinion)

In a landlord's summary holdover proceeding, the landlord appealed from the Civil Court's dismissal of the petition. The Appellate Term reversed and reinstated the petition, holding that the landlord's failure to register the premises as a multiple dwelling did not bar a holdover proceeding brought for maintaining a nuisance on the premises.

The tenant occupied a second-floor apartment in an owner-occupied two-family building. The landlord brought this proceeding, contending that the tenant was maintaining a “Collyer condition” on the premises. An inspector dispatched by Civil Court to examine the premises discovered that the landlord was renting a basement apartment to a tenant not party to this action. As a result of the two tenancies, in addition to the owner's own occupancy, the building was a “de facto multiple dwelling” that the landlord had not registered as such. As a result, Civil Court dismissed the holdover proceeding, concluding that failure to register the premises as a multiple dwelling was a jurisdictional defect that precluded the landlord from maintaining a holdover proceeding.

In reversing, the Appellate Term acknowledged the existence of a number of cases concluding that failure to register a multiple dwelling constituted an absolute bar to a summary proceeding by a landlord, but concluded that those cases should no longer be followed. The court held that only when a landlord seeks possession based on nonpayment should fail-to-register serve as a bar to a summary proceeding. The court noted that Multiple Dwelling Law section 325 was designed to preclude the landlord from collecting rent on an apartment in an unregistered multiple dwelling. The purpose of the statute, however, did not preclude the landlord from maintaining a summary proceeding on other grounds.

Rent Controlled Tenant Not Subject to Eviction

Leonori Assoc. v. Sultan

NYLJ 3/23/05, p. 18, col. 1

Supreme Ct., N.Y. Cty

(Kapnick, J.)

In an action by a landlord seeking a declaration that the tenant was no longer protected by the rent control laws and granting an order of ejectment, the tenant sought dismissal of the landlord's claims. The court granted the tenant's motion in part, holding that the tenant's alleged practice of charging a roommate more than the controlled rent for the entire apartment did not result in a forfeiture of rent control protection.

The legal regulated rent for the rent-controlled apartment is $1262.90. The landlord alleged that the tenant charged her roommate $1400 per month for her share of the apartment. The landlord contended that this profiteering violated the rent control laws and required the tenant's ejectment from the apartment. The landlord also sought to enjoin the tenant from subletting to roommates for the duration of her tenancy.

In awarding summary judgment to the tenant on the landlord's ejectment claim, the court concluded that unlike the rent stabilization laws, the rent control laws do not permit a landlord to recover possession from a tenant who has engaged in profiteering with respect to roommates. The court nevertheless held that the landlord was entitled to seek injunctive relief against further profiteering, together with damages resulting from that profiteering.

COMMENT

A landlord may evict a rent-stabilized or rent-controlled tenant who sublets the unit for an amount that is in excess of the legally recognized rent. The Rent Stabilization Code explicitly authorizes eviction (9 NYCRR sec. 2525.6(f)), while courts have interpreted the Rent Control law to reach the same result. Thus, in Hurst v. Miske, 133 Misc.2d 362, the court authorized eviction of a rent-controlled tenant who had sublet for more than the controlled rent, noting that the underlying goal of preventing profiteering in regulated apartments exists for rent-control units, even though the rent control statutes do not include the same explicit language found in the Rent Stabilization Code.

Before the rent-stabilization code was amended in 2000 with the adoption of 9 NYCRR ' 2527.7(b), the code was silent on how to treat stabilized tenants who continued to live in the apartment, while charging a roommate more than the regulated rent. While the amended code expressly prohibits profiteering in co-occupant roommate situations (defining profiteering as the act of charging a roommate a rental amount that exceeds the roommate's proportionate share — an amount determined by dividing the legal regulated rent by the total number of tenants named on the lease and the total number of occupants residing in the housing), the language of the amendment did not expressly authorize eviction as a penalty for violating the code. Nevertheless, cases like Ram 1 v. Mazzola, 2001 N.Y. Misc. LEXIS 747, (App Term, 1st Dept.) have held that ' 2527.7(b) gives rise to a cause of action to terminate a rent-stabilized tenancy when the tenant violates the profiteering prohibition. In Mazzola, the tenant charged her roommate a rent that was in excess of the roommate's proportionate share. The appellate court upheld the trial court's denial of a motion to dismiss the proceeding for failure to state a cause of action, stating that the code should be read to provide a landlord in this situation with a possessory cause of action against the tenant.

Courts have been unwilling, however, to extend the permit eviction of a rent-controlled tenant who profits from renting to a roommate, despite the availability of eviction under the stabilization code. Thus, in 270 Riverside Drive, Inc. v. Braun, 4 Misc. 3d 77, the court explained that the DHCR specifically elected not to include a parallel provision in the control code when it created a requirement for proportional rent among roommates in rent-stabilized apartments. The court was unwilling to extend the eviction penalty to rent control cases by implication, especially when the rent control code does not even prohibit the practice of charging disproportionate rent to a roommate.

Lease Obligation Refers to Building, Not Land

South Road Associates, LLC. v. International Business Machines Corp.

NYLJ 3/30/05, p. 18, col. 5

Court of Appeals

(opinion by Ciparick, J.)

In a landlord's action for breach of the lease, the tenant appealed from the Appellate Division's reversal of the Supreme Court's denial of the landlord's summary judgment motion. The Court of Appeals affirmed, holding that a lease provision requiring the tenant to return the “premises” in good order and condition referred only to the interior of the buildings, and not the land.

IBM has leased the subject land and building since the 1950s for use in its commercial and manufacturing operations. The current lease, executed in 1981, requires the tenant to return the “premises” in “good order and condition.” During its occupation, IBM installed an underground storage tank to hold chemical waste. IBM's own investigations later revealed groundwater contamination resulting from a leak in the tank. In 1984, IBM accepted responsibility for the pollution, agreeing to abate the pollution to the satisfaction of all governmental agencies, and agreeing to hold landlord harmless for any resulting claims. The parties later agreed that at the termination of the lease, IBM would have a right of access to maintain and operate its monitoring wells and groundwater treatment system. The landlord does not contend that IBM breached these agreements, but brought this action contending that IBM had breached the provision in the lease that requires return of the premises in good order and condition. Both parties moved for summary judgment, and the Supreme Court granted the landlord's motion. The Appellate Division reversed, one justice dissenting, and the tenant appealed.

In affirming, the Court of Appeals relied exclusively on the language of the lease, and concluded that the lease's reference to “premises” unambiguously referred to the building, not to the land. The court relied on a provision of the lease stating that “the premises” is the space shown on a floor plan, consisting of specified square feet “in buildings.” The court also noted that the lease mentions the premises separately from the water tower, appurtenances, land, parking lot, and buildings, and reasoned that the language in these provisions would be superfluous if the premises were intended to include all buildings and land. The court emphasized in particular a provision prohibiting signs on the land or the outside of the building, but permitting them on the entrance doors to the premises. This language, the court held, clearly distinguished premises — as interior space — from the land and exterior portions of the building. The court concluded, therefore, that the lease was clear on its face, making resort to extrinsic evidence impermissible. As a result, the landlord was entitled to summary judgment dismissing the complaint.

Failure to Repair Can Constitute Constructive Eviction

34-35th Corp. v. 1-10

Industry Associates, LLC

NYLJ 3/28/05, p. 34, col. 4

AppDiv, Second Dept

(memorandum opinion)

In a tenant's action for damages for breach of the lease, the landlord appealed from the Supreme Court's grant of partial summary judgment to the tenant on the issue of liability. The Appellate Division modified to deny summary judgment with respect to certain breach of contract issues, and otherwise affirmed.

The lease required the landlord to install 600-amp electric service, to block existing openings, and to install six windows in the leased commercial premises. The landlord did not perform these obligations, contending that it made efforts to block the openings and to install windows, but the parties could not agree on a feasible location. Hence, the court concluded that the case raised factual issues about whether the tenant breached the covenant of good faith and fair dealing, and whether the landlord made reasonable efforts to comply.

The parties also agreed that there were leaks on the premises, and the tenant contends that the landlord's failure to plug the leaks constituted a breach of the covenant of quiet enjoyment. The court noted that to establish breach of the covenant of quiet enjoyment, the tenant would have to show actual or constructive eviction. The court went further and indicated that failure to repair can constitute actual or constructive eviction. In this case, however, there was evidence that the landlord made repairs in an effort to cure the problem. Whether those efforts were sufficient constitutes a triable issue of fact for the jury to determine.

COMMENT

New York courts have relaxed the rule that once required a tenant to vacate the subject premises in order to maintain a claim for constructive eviction. The early rule appears in Barash v. Pennsylvania Terminal Real Estate Corp., 26 N.Y.2d 77, where the Court of Appeals refused to uphold the tenant's constructive eviction defense because the tenant had remained in possession of the premises The Barash court noted that it is inequitable to permit a tenant to claim substantial interference and withhold payment of rent while that tenant remains in possession. In Barash, the complaining tenant alleged that the landlord's failure to provide the promised 24-hour ventilation made the subject office space uncomfortable and uninhabitable. Because the tenant had not abandoned the subject premises, it was barred from claiming constructive eviction.

Almost immediately after the Court of Appeals' decision in Barash, other New York courts began to carve out exceptions to the rule requiring abandonment as a condition precedent to a claim for constructive eviction. In East Haven Associates Inc. v. Gurian, 64 Misc. 2d 276, the court held that, to maintain a claim of constructive eviction, a tenant need only abandon that part of the premises made uninhabitable by the landlord's wrongful acts. The tenant in Gurian had abandoned a terrace when the landlord permitted it to become contaminated by water overflow and ash from the incinerator. In Minjak Co. v. Randolph, 140 A.D.2d 245, the Appellate Division noted that, when a tenant is constructively evicted from a portion of the subject premises, but remains in possession of another portion, the tenant is not obligated to continue payment of the full amount of the rent. The tenants in Randolph abandoned only part of the subject premises after the landlord's construction work caused debris to rain down on portions of the tenants' commercial loft, and the court upheld a rent abatement to the extent of the portion of the loft rendered unusable by the landlord's acts.

To maintain an action for breach of the covenant of quiet enjoyment, a tenant must generally establish either an actual or constructive eviction. In Dave Herstein Co. v. Columbia Pictures Corp., 4 N.Y.2d 117, the Court of Appeals noted that in actions for breach of the covenant of quiet enjoyment, the tenant must either show an ouster from the subject premises, or, if the claim arises out of a constructive eviction, an abandonment of all or part of the premises. However, the court added that it is not necessary to show ouster if the landlord has covenanted, and subsequently failed, to perform a specific obligation. This view was reinforced in Dinicu v. Groff Studios Corp., 257 A.D.2d 218, where the Appellate Division noted that, to prove constructive eviction, a lessee need only prove that a part of the premises cannot be used for its intended purpose, and must be abandoned as a result. In Dinicu, a tenant covenanted to use the subject premises as a combination residence and dance studio. When the landlord, under pressure from other tenants, subsequently forbade use of the premises as a studio, the tenant prevailed in a claim for breach of the covenant of quiet enjoyment on the basis of a partial constructive eviction.

34-35th Corp. is unusual because the court appeared prepared to find a breach of the covenant of quiet enjoyment without any discussion of the tenant's abandonment of any part of the premises.

Failure to Register Premises As Multiple Dwelling

Czerwinski v. Hayes

NYLJ 4/5/05, p. 2., col.

AppTerm, 2nd and 11th Districts

(memorandum opinion)

In a landlord's summary holdover proceeding, the landlord appealed from the Civil Court's dismissal of the petition. The Appellate Term reversed and reinstated the petition, holding that the landlord's failure to register the premises as a multiple dwelling did not bar a holdover proceeding brought for maintaining a nuisance on the premises.

The tenant occupied a second-floor apartment in an owner-occupied two-family building. The landlord brought this proceeding, contending that the tenant was maintaining a “Collyer condition” on the premises. An inspector dispatched by Civil Court to examine the premises discovered that the landlord was renting a basement apartment to a tenant not party to this action. As a result of the two tenancies, in addition to the owner's own occupancy, the building was a “de facto multiple dwelling” that the landlord had not registered as such. As a result, Civil Court dismissed the holdover proceeding, concluding that failure to register the premises as a multiple dwelling was a jurisdictional defect that precluded the landlord from maintaining a holdover proceeding.

In reversing, the Appellate Term acknowledged the existence of a number of cases concluding that failure to register a multiple dwelling constituted an absolute bar to a summary proceeding by a landlord, but concluded that those cases should no longer be followed. The court held that only when a landlord seeks possession based on nonpayment should fail-to-register serve as a bar to a summary proceeding. The court noted that Multiple Dwelling Law section 325 was designed to preclude the landlord from collecting rent on an apartment in an unregistered multiple dwelling. The purpose of the statute, however, did not preclude the landlord from maintaining a summary proceeding on other grounds.

Rent Controlled Tenant Not Subject to Eviction

Leonori Assoc. v. Sultan

NYLJ 3/23/05, p. 18, col. 1

Supreme Ct., N.Y. Cty

(Kapnick, J.)

In an action by a landlord seeking a declaration that the tenant was no longer protected by the rent control laws and granting an order of ejectment, the tenant sought dismissal of the landlord's claims. The court granted the tenant's motion in part, holding that the tenant's alleged practice of charging a roommate more than the controlled rent for the entire apartment did not result in a forfeiture of rent control protection.

The legal regulated rent for the rent-controlled apartment is $1262.90. The landlord alleged that the tenant charged her roommate $1400 per month for her share of the apartment. The landlord contended that this profiteering violated the rent control laws and required the tenant's ejectment from the apartment. The landlord also sought to enjoin the tenant from subletting to roommates for the duration of her tenancy.

In awarding summary judgment to the tenant on the landlord's ejectment claim, the court concluded that unlike the rent stabilization laws, the rent control laws do not permit a landlord to recover possession from a tenant who has engaged in profiteering with respect to roommates. The court nevertheless held that the landlord was entitled to seek injunctive relief against further profiteering, together with damages resulting from that profiteering.

COMMENT

A landlord may evict a rent-stabilized or rent-controlled tenant who sublets the unit for an amount that is in excess of the legally recognized rent. The Rent Stabilization Code explicitly authorizes eviction (9 NYCRR sec. 2525.6(f)), while courts have interpreted the Rent Control law to reach the same result. Thus, in Hurst v. Miske, 133 Misc.2d 362, the court authorized eviction of a rent-controlled tenant who had sublet for more than the controlled rent, noting that the underlying goal of preventing profiteering in regulated apartments exists for rent-control units, even though the rent control statutes do not include the same explicit language found in the Rent Stabilization Code.

Before the rent-stabilization code was amended in 2000 with the adoption of 9 NYCRR ' 2527.7(b), the code was silent on how to treat stabilized tenants who continued to live in the apartment, while charging a roommate more than the regulated rent. While the amended code expressly prohibits profiteering in co-occupant roommate situations (defining profiteering as the act of charging a roommate a rental amount that exceeds the roommate's proportionate share — an amount determined by dividing the legal regulated rent by the total number of tenants named on the lease and the total number of occupants residing in the housing), the language of the amendment did not expressly authorize eviction as a penalty for violating the code. Nevertheless, cases like Ram 1 v. Mazzola, 2001 N.Y. Misc. LEXIS 747, (App Term, 1st Dept.) have held that ' 2527.7(b) gives rise to a cause of action to terminate a rent-stabilized tenancy when the tenant violates the profiteering prohibition. In Mazzola, the tenant charged her roommate a rent that was in excess of the roommate's proportionate share. The appellate court upheld the trial court's denial of a motion to dismiss the proceeding for failure to state a cause of action, stating that the code should be read to provide a landlord in this situation with a possessory cause of action against the tenant.

Courts have been unwilling, however, to extend the permit eviction of a rent-controlled tenant who profits from renting to a roommate, despite the availability of eviction under the stabilization code. Thus, in 270 Riverside Drive, Inc. v. Braun, 4 Misc. 3d 77, the court explained that the DHCR specifically elected not to include a parallel provision in the control code when it created a requirement for proportional rent among roommates in rent-stabilized apartments. The court was unwilling to extend the eviction penalty to rent control cases by implication, especially when the rent control code does not even prohibit the practice of charging disproportionate rent to a roommate.