Landlord & Tenant

Civil Court, Kings Cty

(Heymann, J.)

In landlord's holdover proceeding, tenant sought a stay of execution of the warrant of eviction to allow tenant additional time to relocate. The court granted the motion, holding that Civil Court had discretion to stay execution of the warrant even beyond the six-month statutory stay period.

On July 20, 2006, landlord and tenant and their lawyers entered into a 'so ordered' stipulation that provided landlord with a final judgment of possession, with the warrant to be issued, but with execution stayed through Dec. 31, 2006, at which time tenant, who is 94 years old, agreed to vacate the premises. Eviction was scheduled for Jan.18, 2007. Tenant sought a further stay, but landlord opposed the stay, citing the six-month stay period of RPAPL section 753(1).

In granting tenant's motion, the court held that Civil Court has discretionary power to provide equitable relief to avoid forfeitures and homelessness when the facts so warrant. Here, the court noted that the prejudice to tenant would be significant if tenant were forced to leave prematurely, and emphasized that landlord would be protected by the court's order that tenant tender $2000 ' the equivalent of four months' rent ' as a condition for staying execution of the warrant until Feb. 28, 2007.

Landlord Does Not Have to Return Security Deposit

Bayside Plaza Associates LLC v. Deli Bizz 24 Inc.

NYLJ 1/24/07, p. 22, col. 3

Civil Ct., Queens Cty (Pineda-Kirwan, J.)

In landlord's commercial nonpayment proceeding, tenant moved for an order granting judgment in the amount of its security deposit. The court denied tenant's motion, holding that neither the stipulation of settlement nor the common law required landlord to return a security deposit landlord had never received from its predecessor.

The lease agreement, dated June 11, 1990, required tenant to pay $21,000 as a security deposit, and provided that landlord would return the deposit to tenant upon expiration of the lease. The lease also gave landlord the right to transfer the security deposit to a successor. Finally, the lease provided that covenant, conditions, and agreements in the lease would bind assigns. Subsequently, landlord transferred its rights to current landlord. Current landlord brought the instant nonpayment proceeding against tenant, which resulted in a stipulation awarding landlord a judgment of possession. The stipulation also provided that upon receipt of keys, tenant 'shall also receive his security deposit + interest, if any.' After tenant vacated the premises, landlord failed to pay tenant the security deposit, because landlord had never received that deposit from landlord's predecessor. Tenant then moved for judgment in the amount of the security deposit.

In denying tenant's motion, the court first held that at common law, a lease covenant to return a security deposit does not run with the land unless the leased premises include dwelling units. Because the premises in this case do not include dwelling units, tenant's common law remedy would be against landlord's predecessor, not against current landlord. The court then turned to the stipulation of settlement, and rejected tenant's argument that the stipulation required landlord to return the security deposit even if landlord had not received the deposit from its predecessor. The court rejected tenant's argument that the words 'if any' modified only the word 'interest,' and concluded that the words 'if any' modified 'security deposit plus interest.' As a result, because landlord did not hold any security deposit, the stipulation did not require landlord to return the deposit.

Misrepresentation Voids Stipulation

142 Fulton LLC v. Hyatt

NYLJ 2/7/07, p. 18, col. 1

Supreme Ct., N.Y. Cty

(Lehner, J.)

In landlord's ejectment action, landlord sought summary judgment declaring that tenants are not subject to the Emergency Tenant Protection Act (ETPA) or the Loft Law, and also sought a final judgment of ejectment. The court denied landlord's motion, holding that tenants might be subject to the ETPA, and that tenant's waiver of rights in a 1996 stipulation was unenforceable because of a deliberate factual misrepresentation in the stipulation.

The subject loft building, which contains six dwelling units and is an area zoned for residential use, was built before 1974. The building did not have a residential certificate of occupancy when tenants entered into possession, some time after Dec. 1, 1981. In 1996, when landlord sought to remove tenants from possession, the parties entered into a stipulation of settlement (incorporated into a Supreme Court judgment) in which tenants agreed to waive their rights under the Emergency Tenant Protection Act and the Rent Stabilization Law, in return for landlord's agreement to permit them to remain in their apartments until June 30, 2006, at which time tenants agreed to vacate the apartments. The stipulation recited ' contrary to facts known by both parties ' that the building had been substantially rehabilitated for residential use after Jan. 1, 1974. In 2006, landlord brought this ejectment action, contending that tenants were not entitled to protection under the ETPA, and contending that in any event, tenants were bound by the stipulation of settlement.

In denying landlord's summary judgment motion, the court first concluded, relying on the First Department's recent cryptic memorandum in Duane Thomas LLC v. Wallin, 35 AD3d 232, in which that court indicated that when tenant commenced occupancy of a loft unit after the 'window period' of the Loft Law, if the unit is capable of being legalized, it 'may therefore be subject to rent stabilization.' Relying on that language in Duane Thomas, the court in 142 Fulton held that the subject units may be subject to the ETPA, even though tenant took occupancy outside the window period, which expired on Dec. 1, 1981. The court went on to note that the parties had submitted no proof as to the work necessary to legalize the units, and the steps taken to effect that legalization.

The court then turned to the stipulation, and noted that in 1996 it was unclear whether a loft unit in an area zoned for residential use would be subject to the ETPA if first occupied by tenant after expiration of the window period. Because of that uncertainty, a stipulation in which the tenant waived any claim to rent stabilization protection in return for the benefits of continued occupancy would generally have been enforceable. But the court noted that in this case, the stipulation included a misrepresentation of material fact ' the representation that landlord had substantially rehabilitated the building after 1974. That misrepresentation, the court suggested, was made because case law had established that buildings substantially rehabilitated after 1974 were not subject to the ETPA. Hence, the court concluded that the misrepresentation had been designed to the court, in 1996, to give judicial sanction for the stipulation. The court concluded that this sort of misrepresentation interferes with the integrity of the judicial system, and rendered the stipulation unenforceable. As a result, the court consolidated this action with the various summary proceedings brought in Civil Court, granted landlord a declaration that the premises were not subject to the Loft Law, and otherwise denied landlord the relief requested.

Civil Court Has Discretion To Stay Warrant of Eviction

Errigo v. Diomede

NYLJ 1/31/07, p. 23, col. 1

Civil Court, Kings Cty

(Heymann, J.)

In landlord's holdover proceeding, tenant sought a stay of execution of the warrant of eviction to allow tenant additional time to relocate. The court granted the motion, holding that Civil Court had discretion to stay execution of the warrant even beyond the six-month statutory stay period.

On July 20, 2006, landlord and tenant and their lawyers entered into a 'so ordered' stipulation that provided landlord with a final judgment of possession, with the warrant to be issued, but with execution stayed through Dec. 31, 2006, at which time tenant, who is 94 years old, agreed to vacate the premises. Eviction was scheduled for Jan.18, 2007. Tenant sought a further stay, but landlord opposed the stay, citing the six-month stay period of RPAPL section 753(1).

In granting tenant's motion, the court held that Civil Court has discretionary power to provide equitable relief to avoid forfeitures and homelessness when the facts so warrant. Here, the court noted that the prejudice to tenant would be significant if tenant were forced to leave prematurely, and emphasized that landlord would be protected by the court's order that tenant tender $2000 ' the equivalent of four months' rent ' as a condition for staying execution of the warrant until Feb. 28, 2007.

Landlord Does Not Have to Return Security Deposit

Bayside Plaza Associates LLC v. Deli Bizz 24 Inc.

NYLJ 1/24/07, p. 22, col. 3

Civil Ct., Queens Cty (Pineda-Kirwan, J.)

In landlord's commercial nonpayment proceeding, tenant moved for an order granting judgment in the amount of its security deposit. The court denied tenant's motion, holding that neither the stipulation of settlement nor the common law required landlord to return a security deposit landlord had never received from its predecessor.

The lease agreement, dated June 11, 1990, required tenant to pay $21,000 as a security deposit, and provided that landlord would return the deposit to tenant upon expiration of the lease. The lease also gave landlord the right to transfer the security deposit to a successor. Finally, the lease provided that covenant, conditions, and agreements in the lease would bind assigns. Subsequently, landlord transferred its rights to current landlord. Current landlord brought the instant nonpayment proceeding against tenant, which resulted in a stipulation awarding landlord a judgment of possession. The stipulation also provided that upon receipt of keys, tenant 'shall also receive his security deposit + interest, if any.' After tenant vacated the premises, landlord failed to pay tenant the security deposit, because landlord had never received that deposit from landlord's predecessor. Tenant then moved for judgment in the amount of the security deposit.

In denying tenant's motion, the court first held that at common law, a lease covenant to return a security deposit does not run with the land unless the leased premises include dwelling units. Because the premises in this case do not include dwelling units, tenant's common law remedy would be against landlord's predecessor, not against current landlord. The court then turned to the stipulation of settlement, and rejected tenant's argument that the stipulation required landlord to return the security deposit even if landlord had not received the deposit from its predecessor. The court rejected tenant's argument that the words 'if any' modified only the word 'interest,' and concluded that the words 'if any' modified 'security deposit plus interest.' As a result, because landlord did not hold any security deposit, the stipulation did not require landlord to return the deposit.

Misrepresentation Voids Stipulation

142 Fulton LLC v. Hyatt

NYLJ 2/7/07, p. 18, col. 1

Supreme Ct., N.Y. Cty

(Lehner, J.)

In landlord's ejectment action, landlord sought summary judgment declaring that tenants are not subject to the Emergency Tenant Protection Act (ETPA) or the Loft Law, and also sought a final judgment of ejectment. The court denied landlord's motion, holding that tenants might be subject to the ETPA, and that tenant's waiver of rights in a 1996 stipulation was unenforceable because of a deliberate factual misrepresentation in the stipulation.

The subject loft building, which contains six dwelling units and is an area zoned for residential use, was built before 1974. The building did not have a residential certificate of occupancy when tenants entered into possession, some time after Dec. 1, 1981. In 1996, when landlord sought to remove tenants from possession, the parties entered into a stipulation of settlement (incorporated into a Supreme Court judgment) in which tenants agreed to waive their rights under the Emergency Tenant Protection Act and the Rent Stabilization Law, in return for landlord's agreement to permit them to remain in their apartments until June 30, 2006, at which time tenants agreed to vacate the apartments. The stipulation recited ' contrary to facts known by both parties ' that the building had been substantially rehabilitated for residential use after Jan. 1, 1974. In 2006, landlord brought this ejectment action, contending that tenants were not entitled to protection under the ETPA, and contending that in any event, tenants were bound by the stipulation of settlement.

In denying landlord's summary judgment motion, the court first concluded, relying on the First Department's recent cryptic memorandum in Duane Thomas LLC v. Wallin , 35 AD3d 232, in which that court indicated that when tenant commenced occupancy of a loft unit after the 'window period' of the Loft Law, if the unit is capable of being legalized, it 'may therefore be subject to rent stabilization.' Relying on that language in Duane Thomas, the court in 142 Fulton held that the subject units may be subject to the ETPA, even though tenant took occupancy outside the window period, which expired on Dec. 1, 1981. The court went on to note that the parties had submitted no proof as to the work necessary to legalize the units, and the steps taken to effect that legalization.

The court then turned to the stipulation, and noted that in 1996 it was unclear whether a loft unit in an area zoned for residential use would be subject to the ETPA if first occupied by tenant after expiration of the window period. Because of that uncertainty, a stipulation in which the tenant waived any claim to rent stabilization protection in return for the benefits of continued occupancy would generally have been enforceable. But the court noted that in this case, the stipulation included a misrepresentation of material fact ' the representation that landlord had substantially rehabilitated the building after 1974. That misrepresentation, the court suggested, was made because case law had established that buildings substantially rehabilitated after 1974 were not subject to the ETPA. Hence, the court concluded that the misrepresentation had been designed to the court, in 1996, to give judicial sanction for the stipulation. The court concluded that this sort of misrepresentation interferes with the integrity of the judicial system, and rendered the stipulation unenforceable. As a result, the court consolidated this action with the various summary proceedings brought in Civil Court, granted landlord a declaration that the premises were not subject to the Loft Law, and otherwise denied landlord the relief requested.