Landlord & Tenant

Five-Day Notice Adequate if Signed by Landlord's Agent

QPII-143-45 Sanford Avenue, LLC v. Spinner

NYLJ 9/21/11

AppTerm, 2nd, 11th, and 13th Districts

(2-1 decision; majority opinion by Weston, P.J; dissenting opinion by Rios, J.)

In a nonpayment proceeding, tenant appealed from a Civil Court judgment awarding landlord $11,678.52. The Appellate Term affirmed, holding that landlord's five-day notice was adequate even though it was signed by the landlord's agent rather than the landlord itself.

The lease provides that “Landlord must give Tenant written notice of default stating the type of default,” and provides that notice for failure to pay rent shall be five days. Then if tenant fails to cure, the lease gives landlord the right to cancel by giving tenant a cancellation notice. Landlord served on tenant a five-day notice on April 2, 2009, listing the monthly rent due for more than a year, for a total balance due in excess of $9,000 up to the date the notice was served. The notice, however, was signed by “Cathy McGovern, agent for” the landlord. After tenant was served with a notice of petition in this proceeding, tenant moved to dismiss because the five-day notice did not include any proof of the agent's authority to act on the landlord's behalf. Civil Court denied the motion, and tenant appealed.

In affirming, the Appellate Term held that landlord's notice was adequate. In particular, the majority indicated that because tenant can be expected to know whether he paid rent, the notice did not put tenant in any peril in calling on him to pay arrears or move out. Justice Jaime Rios dissented, arguing that the notice was defective because of the absence of any assurance that it was authorized.

COMMENT

Generally, when a landlord serves a notice of default or termination signed by an agent, the landlord must also provide proof of the agent's authority, unless the agent is specifically mentioned in the lease. In Siegel v. KFC of Long Island, 108 A.D.2d 218, affd 67 N.Y.2d 218, the Second Department held that a notice of termination signed by an attorney with whom the tenant had no prior dealings was invalid because it was not accompanied by proof of the agent's authority. The lease authorized only the landlord to send notices of default or termination. An attorney, who was not mentioned in the lease as an authorized agent for the landlord, sent a five-day notice to cure, and after the tenant failed to cure the defaults, a three-day notice of termination.

In Siegel, both the Second Department and the Court of Appeals indicated that the language of the lease was the key factor in the case. The lease in Siegel had multiple provisions referring to “landlord or landlord's agent,” but the default and termination provisions referred simply to “landlord.” Both courts held that failure to include the word “agent” in the lease provisions dealing with notices of default and notices of termination necessarily precludes an agent who is “a total stranger to the transaction” from signing such notices without accompanying proof of the agent's authority.

On the other hand, where the tenant is familiar with the agent through prior dealings, proof of the agent's authority to sign notices of default or termination is unnecessary. For instance, in 54-55 Street Co. v. Torres, 171 Misc.2d 237, the Appellate Term held that notice of default signed by Landlord's agent was sufficient because the same agent had billed the tenant for rent for three months prior to sending the notice of default. Furthermore, where the tenant has prior notification that the agent is authorized to act on behalf of the landlord, the courts have upheld the validity of the notice, even if the agent is not mentioned in the lease. Thus, in Oswego Properties v. Campfield, 182 A.D.2d 1058, the Third Department held that lack of proof of agent's authority did not invalidate the notice of termination signed by the agent because the landlord had previously notified the tenant that the agent in question had authority to act on the landlord's behalf. In the court's view, the tenant was entitled to rely on the agent's continued authority to act, unless the landlord issued a notice terminating the agent's authority.

Although the notice in Spinner itself was signed by an agent not identified in the lease and apparently not known to the tenant, the Spinner majority concluded that Siegel was not dispositive, for two separate reasons. First, the court emphasized that Siegel was compelled by the particular lease language in that case, which provided for action by “landlord or landlord's agent” at various places in the lease, while providing only that “the landlord” must sign a notice of termination. Second, the court emphasized that Siegel involved a notice of termination, not a notice to cure like the one at issue in Spinner.

Landlord's Liability for Personal Injuries

Alnashmi v. Certified Analytical Group, Inc.

NYLJ 9/21/11, p. 18, col. 5

AppDiv, Second Dept.

(Opinion by Balkin, J.)

In an action for personal injuries, landlord appealed from Supreme Court's denial of its motion for summary judgment dismissing the complaint. The Appellate Division reversed and dismissed the complaint, holding that landlord's reservation of a right to enter the premises to make repairs did not subject landlord to liability for injuries resulting from a failure to repair.

In 1994, landlord leased the subject premises to tenant for a 20-year term. Landlord had no employees and was wholly owned by the majority shareholder of tenant. The lease imposed on tenant an obligation to repair the premises, and reserved to landlord a right to enter to make repairs. The lease also provided that the right to enter did not impose on landlord any responsibility for the care or supervision of the premises. In 2005, tenant
contracted for installation of a new roof to remedy a recurrent water condition. The new roof did not cure the problem, and tenant's roofing contractor returned several times to address the problem. In 2006, drums were installed in a hallway to catch water leaking from the roof. On the day of the accident, however, the drums were not in the hallway, and one of tenant's employees was injured when she slipped therein. She recovered workers' compensation from tenant, but then brought this action against landlord. Supreme Court denied landlord's motion for summary judgment dismissing the complaint.

In reversing, the Second Department noted that plaintiff had grounded her claim entirely on common law, not on any statutory provision. The court held that out-of-possession landlords owe no common law duty in tort to persons within the building unless that duty is imposed by statute or contract, or through a course of conduct. Reservation of a right to repair is not enough to impose such a duty on landlord. As a result, landlord was entitled to summary judgment.

Landlord Liability for Tenant's Attorney Fees

Matter of Casamento v. Juaregui

NYLJ 9/21/11, p. 27, col. 1

AppDiv, Second Dept.

(Opinion by Angiolillo, J.)

In landlord's summary holdover proceeding, tenant appealed from the Appellate Term's affirmance of Civil Court's denial of tenant's motion for an award of attorney's fees. The Appellate Division reversed, holding that the lease provision triggered section 234 of the Real Property Law (RPL 234), and entitled tenant to an award of attorneys' fees.

Tenant leased a residential apartment from landlord. Paragraph 16 of the lease, dealing with remedies, does not directly provide that landlord will be entitled to attorneys fees in the event of tenant breach. Instead, the lease provides that if landlord cancels the lease, any rent received by landlord from reletting the premises shall be applied first towards landlord's expenses, including “the costs of getting possession and re-renting the Apartment, including but not only reasonable legal fees ' ” In March 2007, landlord served tenant with a notice to cure alleged violations of the lease, including making alterations without landlord's consent. The notice represented that tenant would be responsible for landlord's legal fees with respect to the notice to cure and any subsequent actions taken by landlord based on tenant's default. In April, landlord brought the instant summary holdover proceeding, which Civil Court dismissed, concluding that any actions by tenant were a response to landlord's failure to make repairs to the premises. Tenant then made a motion for an award of attorneys' fees, relying on RPL 234, which entitles tenant to attorneys' fees when the lease provides “ that in any action or summary proceeding the landlord may recover attorneys' fees and/or expenses as the result of the failure of the tenant to perform ' .” Civil Court denied the motion, holding that RPL 234 was inapplicable, because paragraph 16 of the lease did not provide a general obligation for tenant to pay landlord's legal fees, but instead a more limited obligation that would only be triggered by tenant's vacatur of the apartment. The Appellate Term affirmed, but the Appellate Division granted tenant leave to appeal.

In reversing, the Appellate Division held that a lease triggers RPL 234 “even if it does not mandate the landlord's full recovery of his or her attorney's fee under very circumstance in which the parties litigate the tenant's alleged default.” Here, because paragraph 16 would entitle landlord to recover attorney's fees in some circumstances, the paragraph triggered RPL 234's implied covenant in favor of the tenant. The court emphasized that legislature's remedial purpose of deterring frivolous and harassing litigation by landlords who seek to relet premises at a higher rent.

COMMENT

Whenever a residential lease provides that “the landlord may recover attorneys' fees and/or expenses incurred as the result of the failure of tenant to perform any covenant or agreement,” RPL ' 234 implies a reciprocal covenant entitling tenant to attorneys' fees.

In Bunny Realty v. Miller, 180 A.D.2d 460, the First Department held that a lease provision permitting a landlord to deduct its attorneys' fees from rents received upon re-renting triggers ' 234 even though the lease does not explicitly authorize landlord to recover legal fees incurred in bringing a summary proceeding. In Bunny Realty, the lease provision allowed landlord to recover costs of getting possession and re-renting the apartment, including attorneys' fees. Despite the absence of a provision allowing landlord to recover costs in an action or summary proceeding, the First Department held that lease was sufficiently broad to allow landlord to procure counsel fees for any reason, so long as the ultimate result would be to take possession or re-rent the apartment. Accordingly, the provision triggered a tenant's reciprocal rights under RPL ' 234 when the tenant was seeking costs in the successful defense of a non-payment proceeding.

Casamento brings the Second Department in line with the First Department by overruling lower-court cases holding that a lease provision permitting a landlord to deduct its attorneys' fees from rents received upon re-renting was not sufficiently broad to trigger ' 234. For example, in Hamilton v. Menalon Realty LLC, 14 Misc.3d 13, the lease, similar to the lease in Bunny Realty, allowed landlord to deduct attorneys' fees from rents received upon reletting, but did not expressly authorize recovery of costs incurred in an action or summary proceeding. The court reasoned that a provision which did not provide for a landlord's right to recovery “in any action or summary proceeding,” but merely allowed for the deduction of attorneys' fees, was insufficient to allow an award to attorneys' fees to the landlord. Accordingly, the provision did not trigger ' 234. Casamento overturned Hamilton, endorsing the reasoning from Bunny Realty. The court emphasized that the wording of ' 234 indicates that a lease provision triggers the implied covenant even if it does not mandate landlord's recovery of fees under every set of circumstances.

Five-Day Notice Adequate if Signed by Landlord's Agent

QPII-143-45 Sanford Avenue, LLC v. Spinner

NYLJ 9/21/11

AppTerm, 2nd, 11th, and 13th Districts

(2-1 decision; majority opinion by Weston, P.J; dissenting opinion by Rios, J.)

In a nonpayment proceeding, tenant appealed from a Civil Court judgment awarding landlord $11,678.52. The Appellate Term affirmed, holding that landlord's five-day notice was adequate even though it was signed by the landlord's agent rather than the landlord itself.

The lease provides that “Landlord must give Tenant written notice of default stating the type of default,” and provides that notice for failure to pay rent shall be five days. Then if tenant fails to cure, the lease gives landlord the right to cancel by giving tenant a cancellation notice. Landlord served on tenant a five-day notice on April 2, 2009, listing the monthly rent due for more than a year, for a total balance due in excess of $9,000 up to the date the notice was served. The notice, however, was signed by “Cathy McGovern, agent for” the landlord. After tenant was served with a notice of petition in this proceeding, tenant moved to dismiss because the five-day notice did not include any proof of the agent's authority to act on the landlord's behalf. Civil Court denied the motion, and tenant appealed.

In affirming, the Appellate Term held that landlord's notice was adequate. In particular, the majority indicated that because tenant can be expected to know whether he paid rent, the notice did not put tenant in any peril in calling on him to pay arrears or move out. Justice Jaime Rios dissented, arguing that the notice was defective because of the absence of any assurance that it was authorized.

COMMENT

Generally, when a landlord serves a notice of default or termination signed by an agent, the landlord must also provide proof of the agent's authority, unless the agent is specifically mentioned in the lease. In Siegel v. KFC of Long Island, 108 A.D.2d 218, affd 67 N.Y.2d 218, the Second Department held that a notice of termination signed by an attorney with whom the tenant had no prior dealings was invalid because it was not accompanied by proof of the agent's authority. The lease authorized only the landlord to send notices of default or termination. An attorney, who was not mentioned in the lease as an authorized agent for the landlord, sent a five-day notice to cure, and after the tenant failed to cure the defaults, a three-day notice of termination.

In Siegel, both the Second Department and the Court of Appeals indicated that the language of the lease was the key factor in the case. The lease in Siegel had multiple provisions referring to “landlord or landlord's agent,” but the default and termination provisions referred simply to “landlord.” Both courts held that failure to include the word “agent” in the lease provisions dealing with notices of default and notices of termination necessarily precludes an agent who is “a total stranger to the transaction” from signing such notices without accompanying proof of the agent's authority.

On the other hand, where the tenant is familiar with the agent through prior dealings, proof of the agent's authority to sign notices of default or termination is unnecessary. For instance, in 54-55 Street Co. v. Torres, 171 Misc.2d 237, the Appellate Term held that notice of default signed by Landlord's agent was sufficient because the same agent had billed the tenant for rent for three months prior to sending the notice of default. Furthermore, where the tenant has prior notification that the agent is authorized to act on behalf of the landlord, the courts have upheld the validity of the notice, even if the agent is not mentioned in the lease. Thus, in Oswego Properties v. Campfield, 182 A.D.2d 1058, the Third Department held that lack of proof of agent's authority did not invalidate the notice of termination signed by the agent because the landlord had previously notified the tenant that the agent in question had authority to act on the landlord's behalf. In the court's view, the tenant was entitled to rely on the agent's continued authority to act, unless the landlord issued a notice terminating the agent's authority.

Although the notice in Spinner itself was signed by an agent not identified in the lease and apparently not known to the tenant, the Spinner majority concluded that Siegel was not dispositive, for two separate reasons. First, the court emphasized that Siegel was compelled by the particular lease language in that case, which provided for action by “landlord or landlord's agent” at various places in the lease, while providing only that “the landlord” must sign a notice of termination. Second, the court emphasized that Siegel involved a notice of termination, not a notice to cure like the one at issue in Spinner.

Landlord's Liability for Personal Injuries

Alnashmi v. Certified Analytical Group, Inc.

NYLJ 9/21/11, p. 18, col. 5

AppDiv, Second Dept.

(Opinion by Balkin, J.)

In an action for personal injuries, landlord appealed from Supreme Court's denial of its motion for summary judgment dismissing the complaint. The Appellate Division reversed and dismissed the complaint, holding that landlord's reservation of a right to enter the premises to make repairs did not subject landlord to liability for injuries resulting from a failure to repair.

In 1994, landlord leased the subject premises to tenant for a 20-year term. Landlord had no employees and was wholly owned by the majority shareholder of tenant. The lease imposed on tenant an obligation to repair the premises, and reserved to landlord a right to enter to make repairs. The lease also provided that the right to enter did not impose on landlord any responsibility for the care or supervision of the premises. In 2005, tenant
contracted for installation of a new roof to remedy a recurrent water condition. The new roof did not cure the problem, and tenant's roofing contractor returned several times to address the problem. In 2006, drums were installed in a hallway to catch water leaking from the roof. On the day of the accident, however, the drums were not in the hallway, and one of tenant's employees was injured when she slipped therein. She recovered workers' compensation from tenant, but then brought this action against landlord. Supreme Court denied landlord's motion for summary judgment dismissing the complaint.

In reversing, the Second Department noted that plaintiff had grounded her claim entirely on common law, not on any statutory provision. The court held that out-of-possession landlords owe no common law duty in tort to persons within the building unless that duty is imposed by statute or contract, or through a course of conduct. Reservation of a right to repair is not enough to impose such a duty on landlord. As a result, landlord was entitled to summary judgment.

Landlord Liability for Tenant's Attorney Fees

Matter of Casamento v. Juaregui

NYLJ 9/21/11, p. 27, col. 1

AppDiv, Second Dept.

(Opinion by Angiolillo, J.)

In landlord's summary holdover proceeding, tenant appealed from the Appellate Term's affirmance of Civil Court's denial of tenant's motion for an award of attorney's fees. The Appellate Division reversed, holding that the lease provision triggered section 234 of the Real Property Law (RPL 234), and entitled tenant to an award of attorneys' fees.

Tenant leased a residential apartment from landlord. Paragraph 16 of the lease, dealing with remedies, does not directly provide that landlord will be entitled to attorneys fees in the event of tenant breach. Instead, the lease provides that if landlord cancels the lease, any rent received by landlord from reletting the premises shall be applied first towards landlord's expenses, including “the costs of getting possession and re-renting the Apartment, including but not only reasonable legal fees ' ” In March 2007, landlord served tenant with a notice to cure alleged violations of the lease, including making alterations without landlord's consent. The notice represented that tenant would be responsible for landlord's legal fees with respect to the notice to cure and any subsequent actions taken by landlord based on tenant's default. In April, landlord brought the instant summary holdover proceeding, which Civil Court dismissed, concluding that any actions by tenant were a response to landlord's failure to make repairs to the premises. Tenant then made a motion for an award of attorneys' fees, relying on RPL 234, which entitles tenant to attorneys' fees when the lease provides “ that in any action or summary proceeding the landlord may recover attorneys' fees and/or expenses as the result of the failure of the tenant to perform ' .” Civil Court denied the motion, holding that RPL 234 was inapplicable, because paragraph 16 of the lease did not provide a general obligation for tenant to pay landlord's legal fees, but instead a more limited obligation that would only be triggered by tenant's vacatur of the apartment. The Appellate Term affirmed, but the Appellate Division granted tenant leave to appeal.

In reversing, the Appellate Division held that a lease triggers RPL 234 “even if it does not mandate the landlord's full recovery of his or her attorney's fee under very circumstance in which the parties litigate the tenant's alleged default.” Here, because paragraph 16 would entitle landlord to recover attorney's fees in some circumstances, the paragraph triggered RPL 234's implied covenant in favor of the tenant. The court emphasized that legislature's remedial purpose of deterring frivolous and harassing litigation by landlords who seek to relet premises at a higher rent.

COMMENT

Whenever a residential lease provides that “the landlord may recover attorneys' fees and/or expenses incurred as the result of the failure of tenant to perform any covenant or agreement,” RPL ' 234 implies a reciprocal covenant entitling tenant to attorneys' fees.

In Bunny Realty v. Miller, 180 A.D.2d 460, the First Department held that a lease provision permitting a landlord to deduct its attorneys' fees from rents received upon re-renting triggers ' 234 even though the lease does not explicitly authorize landlord to recover legal fees incurred in bringing a summary proceeding. In Bunny Realty, the lease provision allowed landlord to recover costs of getting possession and re-renting the apartment, including attorneys' fees. Despite the absence of a provision allowing landlord to recover costs in an action or summary proceeding, the First Department held that lease was sufficiently broad to allow landlord to procure counsel fees for any reason, so long as the ultimate result would be to take possession or re-rent the apartment. Accordingly, the provision triggered a tenant's reciprocal rights under RPL ' 234 when the tenant was seeking costs in the successful defense of a non-payment proceeding.

Casamento brings the Second Department in line with the First Department by overruling lower-court cases holding that a lease provision permitting a landlord to deduct its attorneys' fees from rents received upon re-renting was not sufficiently broad to trigger ' 234. For example, in Hamilton v. Menalon Realty LLC, 14 Misc.3d 13, the lease, similar to the lease in Bunny Realty, allowed landlord to deduct attorneys ' fees from rents received upon reletting, but did not expressly authorize recovery of costs incurred in an action or summary proceeding. The court reasoned that a provision which did not provide for a landlord's right to recovery “in any action or summary proceeding,” but merely allowed for the deduction of attorneys' fees, was insufficient to allow an award to attorneys' fees to the landlord. Accordingly, the provision did not trigger ' 234. Casamento overturned Hamilton, endorsing the reasoning from Bunny Realty. The court emphasized that the wording of ' 234 indicates that a lease provision triggers the implied covenant even if it does not mandate landlord's recovery of fees under every set of circumstances.