Landlord & Tenant

Tenant Did Not Timely Exercise Renewal Right

Redlyn Electric Corp. v. Louis Shiffman, Inc.

NYLJ 2/8/10

p. 32., col. 3

AppDiv, Second Dept.

(memorandum opinion)

In tenant's action for a judgment declaring that it had validly renewed its lease, tenant appealed from Supreme Court's judgment in favor of landlord. The Appellate Division affirmed, holding that tenant had not established that it had timely exercised its renewal right.

In 1999, the parties entered into a three-year commercial lease with two optional renewal terms. The lease provided that if tenant wanted to renew, it had to notify landlord “of its intentions to exercise such options or by a written notice delivered to Lessor personally or by certified mail return receipt requested … ” at least six months before expiration of the term. Tenant did not provide this, but nevertheless brought this action to establish it had validly renewed the lease. Landlord counterclaimed for the fair rental value of the premises for the period tenant remained in possession after expiration of the lease. Supreme Court concluded that the lease provision was not ambiguous, that the first “ or” in the lease provision quoted above was a scrivener's error, and that tenant had not provided the required written notice. Tenant appealed.

In affirming, the Appellate Division emphasized that even if the lease renewal provision was ambiguous about whether oral notice was permitted, tenant never established that it had provided landlord with any timely notice of its exercise of the option to renew.

Late Reimbursement of Overcharge Does Not Preclude Treble Damages

Application of 554 West 181, LLC v. New York State Division of Housing and Community Renewal

NYLJ 2/10/11

Supreme Ct., N.Y. Cty.

(Madden, J.)

In an article 78 proceeding, landlord sought to annul DHCR's determination that tenant was entitled to treble damages on his rent overcharge complaint. The court denied the petition and dismissed the proceeding, holding that DHCR properly assessed treble damages when landlord reimbursed the tenant after the time to answer had passed.

In 2008, tenant filed a fair market rent appeal with DHCR. On Oct. 6 of that year, DHCR sent landlord a notice of tenant's complaint, and landlord filed an answer of Nov. 6. On May 27, 2009, DHCR issued a “Final Notice to Owner” indicating that treble damages would be assessed unless landlord could establish that the overcharge was not willful. Landlord immediately sent tenant two checks for a total of $3551.45, representing the amount of the overcharge, without treble damages. Tenant refused to accept the checks. In July, DHCR awarded tenant treble damages, and ordered landlord to pay $11,161.70. Landlord filed a petition for administrative review, which DHCR denied. Landlord then brought this article 78 proceeding.

In denying the petition, the court concluded that DHCR had acted within its statutory authority in assessing treble damages against landlord. The court relied on DHCR's policy statement, which provides that landlord can establish a lack of willfulness, and avoid treble damages, by paying all back rent, together with interest within the time to interpose an answer to a tenant's overcharge complaint. The court rejected landlord's argument that landlord could not pay all back rent until DHCR determines how much rent is due, and emphasized that in this case, landlord did not pay back rent until long after the time to answer had expired.

Tenant Did Not Timely Exercise Renewal Right

Redlyn Electric Corp. v. Louis Shiffman, Inc.

NYLJ 2/8/10

p. 32., col. 3

AppDiv, Second Dept.

(memorandum opinion)

In tenant's action for a judgment declaring that it had validly renewed its lease, tenant appealed from Supreme Court's judgment in favor of landlord. The Appellate Division affirmed, holding that tenant had not established that it had timely exercised its renewal right.

In 1999, the parties entered into a three-year commercial lease with two optional renewal terms. The lease provided that if tenant wanted to renew, it had to notify landlord “of its intentions to exercise such options or by a written notice delivered to Lessor personally or by certified mail return receipt requested … ” at least six months before expiration of the term. Tenant did not provide this, but nevertheless brought this action to establish it had validly renewed the lease. Landlord counterclaimed for the fair rental value of the premises for the period tenant remained in possession after expiration of the lease. Supreme Court concluded that the lease provision was not ambiguous, that the first “ or” in the lease provision quoted above was a scrivener's error, and that tenant had not provided the required written notice. Tenant appealed.

In affirming, the Appellate Division emphasized that even if the lease renewal provision was ambiguous about whether oral notice was permitted, tenant never established that it had provided landlord with any timely notice of its exercise of the option to renew.

Late Reimbursement of Overcharge Does Not Preclude Treble Damages

Application of 554 West 181, LLC v. New York State Division of Housing and Community Renewal

NYLJ 2/10/11

Supreme Ct., N.Y. Cty.

(Madden, J.)

In an article 78 proceeding, landlord sought to annul DHCR's determination that tenant was entitled to treble damages on his rent overcharge complaint. The court denied the petition and dismissed the proceeding, holding that DHCR properly assessed treble damages when landlord reimbursed the tenant after the time to answer had passed.

In 2008, tenant filed a fair market rent appeal with DHCR. On Oct. 6 of that year, DHCR sent landlord a notice of tenant's complaint, and landlord filed an answer of Nov. 6. On May 27, 2009, DHCR issued a “Final Notice to Owner” indicating that treble damages would be assessed unless landlord could establish that the overcharge was not willful. Landlord immediately sent tenant two checks for a total of $3551.45, representing the amount of the overcharge, without treble damages. Tenant refused to accept the checks. In July, DHCR awarded tenant treble damages, and ordered landlord to pay $11,161.70. Landlord filed a petition for administrative review, which DHCR denied. Landlord then brought this article 78 proceeding.

In denying the petition, the court concluded that DHCR had acted within its statutory authority in assessing treble damages against landlord. The court relied on DHCR's policy statement, which provides that landlord can establish a lack of willfulness, and avoid treble damages, by paying all back rent, together with interest within the time to interpose an answer to a tenant's overcharge complaint. The court rejected landlord's argument that landlord could not pay all back rent until DHCR determines how much rent is due, and emphasized that in this case, landlord did not pay back rent until long after the time to answer had expired.