Landlord & Tenant

In reversing, the Appellate Division cited the Rent Stabilization Code, which permits an owner to file an application to modify services with no change in rent on the ground that the modification “is not inconsistent with” the Rent Stabilization Law or Code. To qualify, the modification must provide an adequate substitute for any discontinued services. In this case, the court concluded that DHCR rationally determined that the proposed surveillance system constituted an adequate substitute for the lobby attendants. As a result, the court denied the petition and dismissed the proceeding.

*****

Yellowstone Injunction Unavailable When Tenant Could Not Establish Willingness to Cure

146 Broadway Associates, LLC v. Bridgeview at Broadway, LLC NYLJ 9/13/18, p. 27., col. 1 AppDiv, Second Dept. (memorandum opinion)

In commercial tenant's action for declaratory and injunctive relief, landlord appealed from Supreme Court's grant of a Yellowstone injunction to tenant. The Appellate Division reversed on the facts and in the exercise of discretion, holding that tenant had not established that it was willing and able to cure the alleged lease violation.

In 2011, landlord leased the commercial portion of a mixed-use building to tenant, who began operating a nightclub on the property in October 2014. In February 2014, landlord served a notice to cure on tenant, alleging that tenant was violating the lease by permitting unreasonable noise in violation of local laws and restrictions. Tenant then brought this action to enjoin termination and sought a Yellowstone injunction to preclude termination pending resolution of the action. The case was adjourned several times over a two-year period. Tenant had apparently built a new wall and installed more soundproof doors, but after these installations, tenant's own expert measured sound levels in one of the building's residential apartments that exceeded the permissible levels in the Administrative Code of the City of New York. In an October 2014 report, tenant's expert recommended additional steps tenant could take to ameliorate the noise issue, but tenant did not obtain a proposal to do that work until Jan. 27, 2016. The following week, Supreme Court granted tenant a Yellowstone injunction, and landlord appealed.

In reversing, the Appellate Division started by noting that a Yellowstone injunction is available to a tenant only if the tenant is prepared to, and maintains the ability to, cure the alleged default. The court then indicated that to show that it is willing and able to cure, the default tenant must indicate in its motion papers that it has made a substantial effort to address the default identified in the notice to cure. In this case, the court held that because tenant had not made any effort to cure the defect between the time of its own expert's October 2014 test and the submission of papers to Supreme Court on Feb. 3, 2016, tenant had not established its entitlement to a Yellowstone injunction.

*****

Landlord Prevails In Nonprimary Residence Proceeding

Matter of 92 Cooper Assoc., LLC v. Roughton-Hester NYLJ 10/2/18, p. 23., col. 5 AppDiv, First Dept. (memorandum opinion)

In landlord's nonprimary residence proceeding, landlord appealed from Appellate Term's reversal of Civil Court's award of possession to landlord. The Appellate Division reversed and reinstated Civil Court's judgment of possession in favor of landlord, holding that the trial court's determination was based on a fair interpretation of the evidence.

Before the trial court, tenant testified that she spent only 139 and 161 days in the apartment in 2012 and 2013, respectively. She also testified that she used a Pennsylvania address on her tax returns and voter registration records. Based on this evidence, the trial court concluded that tenant had not maintained a substantial physical nexus with the apartment during the relevant statutory period. The Appellate Term reversed and directed a new trial, apparently because the trial court's decision indicated that the tax returns and voter registration records were dispositive. Landlord appealed.

In reversing, the Appellate Division agreed that no single factor is dispositive in a non-primary residence proceeding, but concluded that it was evident from the trial court's order that the trial court did not rely on any single factor in concluding that tenant did not maintain the apartment as her primary residence. Because a fair interpretation of the evidence supported the trial court's determination, the Appellate Terms should not have substituted its judgment for that of the trial court.