Landlord & Tenant

Default By Tenant Did Not Render Lease Renewal Ineffective

112 West 34th Street Associates v. 112-1400 Trade Properties, LLC

NYLJ 6/19/14, p. 24, col. 3

AppDiv, First Dept.

(memorandum opinion).

In tenant's action for a judgment declaring that it had effectively renewed its lease, landlord appealed from Supreme Court's award of summary judgment to tenant. The Appellate Division affirmed, holding any default by tenant after exercising its renewal option and before commencement of the renewal term did not render the lease renewal ineffective.

The initial lease between the parties was for 30 years, but provided tenant with the option to renew for eight additional terms of 10 or 11 years each. The lease permitted tenant to renew at any time for one or more of the renewal terms by written notice at least two years before expiration of the then-current lease term. The lease also provided that if tenant has defaulted, and landlord has given notice of the default, and tenant has not cured, a subsequent attempted exercise of the renewal term shall not be effective, “nor shall any such renewal term be created, if any such default shall exist on the purported commencement date of any such renewal term.”

When tenant exercised an option to renew until 2077, landlord had not served tenant with any notice of default. Landlord, however, contends that landlord had provided notice of a default before the commencement of the renewal term, and that, as a result, the renewal term had not been created. Supreme Court, however, rejected landlord's argument, and landlord appealed.

In affirming, the Appellate Division held that the words “any such default” referred to a default in existence at the time of exercise. Because tenant was not in default at the time of exercise, tenant's exercise effectively created a renewal term. Landlord's remedies for subsequent defaults are those provided in the lease for defaults, including termination of the lease upon 15 days' notice.

Tenant May Assert Succession Rights As a Defense

Cenpark Realty LLC v. Gurin

NYLJ 6/19/14, p. 25, col. 2

AppDiv, First Dept.

(memorandum opinion)

In landlord's eviction action, tenant appealed from Supreme Court's award of summary judgment to landlord dismissing tenant's claim for succession rights. The Appellate Division reversed and granted tenant's motion to amend its pleadings to assert succession rights.

Current tenant's sister entered into a lease for a rent-stabilized apartment in 1989. That lease was renewed until 1998. Landlord brought a holdover proceeding in 1998, and tenant asserted succession rights in that proceeding, which was later abandoned by the then-landlord. In 2007, current landlord sought back rent, and then sought an eviction and a declaration that current tenant was not entitled to succession rights. Current tenant then asserted succession rights as an affirmative defense, but Supreme Court dismissed the affirmative defense.

In reversing, the Appellate Division held that even if an action for declaratory relief with respect to succession rights may be time-barred, tenant may nevertheless raise a claim to succession rights defensively. Here, because there were issues of fact about whether tenant resided in the apartment from the inception of the tenancy and when she asserted her claim for succession rights, Supreme Court should not have granted summary judgment.

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Default By Tenant Did Not Render Lease Renewal Ineffective

112 West 34th Street Associates v. 112-1400 Trade Properties, LLC

NYLJ 6/19/14, p. 24, col. 3

AppDiv, First Dept.

(memorandum opinion).

In tenant's action for a judgment declaring that it had effectively renewed its lease, landlord appealed from Supreme Court's award of summary judgment to tenant. The Appellate Division affirmed, holding any default by tenant after exercising its renewal option and before commencement of the renewal term did not render the lease renewal ineffective.

The initial lease between the parties was for 30 years, but provided tenant with the option to renew for eight additional terms of 10 or 11 years each. The lease permitted tenant to renew at any time for one or more of the renewal terms by written notice at least two years before expiration of the then-current lease term. The lease also provided that if tenant has defaulted, and landlord has given notice of the default, and tenant has not cured, a subsequent attempted exercise of the renewal term shall not be effective, “nor shall any such renewal term be created, if any such default shall exist on the purported commencement date of any such renewal term.”

When tenant exercised an option to renew until 2077, landlord had not served tenant with any notice of default. Landlord, however, contends that landlord had provided notice of a default before the commencement of the renewal term, and that, as a result, the renewal term had not been created. Supreme Court, however, rejected landlord's argument, and landlord appealed.

In affirming, the Appellate Division held that the words “any such default” referred to a default in existence at the time of exercise. Because tenant was not in default at the time of exercise, tenant's exercise effectively created a renewal term. Landlord's remedies for subsequent defaults are those provided in the lease for defaults, including termination of the lease upon 15 days' notice.

Tenant May Assert Succession Rights As a Defense

Cenpark Realty LLC v. Gurin

NYLJ 6/19/14, p. 25, col. 2

AppDiv, First Dept.

(memorandum opinion)

In landlord's eviction action, tenant appealed from Supreme Court's award of summary judgment to landlord dismissing tenant's claim for succession rights. The Appellate Division reversed and granted tenant's motion to amend its pleadings to assert succession rights.

Current tenant's sister entered into a lease for a rent-stabilized apartment in 1989. That lease was renewed until 1998. Landlord brought a holdover proceeding in 1998, and tenant asserted succession rights in that proceeding, which was later abandoned by the then-landlord. In 2007, current landlord sought back rent, and then sought an eviction and a declaration that current tenant was not entitled to succession rights. Current tenant then asserted succession rights as an affirmative defense, but Supreme Court dismissed the affirmative defense.

In reversing, the Appellate Division held that even if an action for declaratory relief with respect to succession rights may be time-barred, tenant may nevertheless raise a claim to succession rights defensively. Here, because there were issues of fact about whether tenant resided in the apartment from the inception of the tenancy and when she asserted her claim for succession rights, Supreme Court should not have granted summary judgment.

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