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Bonham Strand LLC v. Paredes

Justice Court of the Town of Greenburgh, Westchester County

December 14, 2017

Bonham Strand LLC, Petitioner-Landlord,
v.
Richard Paredes/LEONOR HILDA CARVAJAL (AKA) HILDA CARVAJAL, Respondents-Tenants.

          GREENBURGH TOWN JUSTICE.

         On September 22, 2017, Petitioner-Landlord, the owner of a rent-stabilized apartment building, located at 2 Main Street, Dobbs Ferry, Town of Greenburgh, NY 10522, brought the instant holdover proceeding against Respondent-Tenants because respondents failed to sign a renewal lease before the termination of the current lease, which ostensibly ended on August 31, 2017. Respondents sought dismissal of the action due to landlord's failure to furnish respondents with a lawful renewal lease pursuant to the Rent Stabilization Code (RSC) and the rules and regulations promulgated thereunder.

         The question presented here is whether landlord's renewal lease furnished to the rent-stabilized tenants was legal when, prior to tenants being permitted to renew their lease, landlord's lease required the advance payment of monies, which were the subject of a pending non-payment proceeding before the same Court. This Court holds that the furnished renewal lease was illegal, and, as such, the instant holdover proceeding is dismissed.

         On November 1, 2017, this Court issued its decision on the Summary Judgment Motion in the non-payment proceeding between the same parties and that case was dismissed Bonham Strand LLC v. Paredes, 2017 NY Slip OP 51532 (U) [Just Ct, Greenburgh, Westchester County, Nov. 1, 2017, Orden, J.]. Although there were numerous grounds upon which this Court ruled in favor of respondent-tenants, the salient rulings as they might pertain to the instant matter included: no rent was due petitioner; clauses of landlord's lease and riders were struck down as void due to unconscionability, such as late fees; lease rule violation damages were non-recoverable in a non-payment proceeding; and claims were erroneously classified as added rent, such as parking fees allegedly owed pursuant to a separate contract .

         The instant holdover proceeding was heard by the Court on November 9, 2017, and respondents argued that based on this Court's ruling on the summary non-payment proceeding, Bonham, 2017 NY Slip OP 51532 (U), the holdover proceeding was moot. Petitioner argued that this Court has only limited jurisdiction and, as such, landlord did not have to provide a renewal lease to tenants without the upfront demand for payment, and that the Court was powerless to order the landlord to provide a lawful lease pursuant to RSC, the Emergency Tenant Protection Act (ETPA), the Division of Housing and Community Renewal (DHCR), and the rules and regulations promulgated thereunder.

         After a review of the documents submitted and brief oral arguments by the parties, on November 9, 2017, this Court dismissed the instant holdover proceeding.

          FACTS AND PROCEDURAL BACKGROUND

         According to the Notice of Petition in the case at bar, petitioner claimed that the respondents owed landlord $18, 306.58 for rent, late fees, lease rule violations, and other fines and fees. When the instant action was filed, respondents' Motion for Summary Judgment on the summary non-payment proceeding included the same substantive claims, but had yet to be decided by the Court. These claims have since been decided. Bonham, 2017 NY Slip OP 51532 (U) .

         During the pendency of the non-payment proceeding, specifically, on July 13, 2017, after learning from the landlord that he intended to bring a holdover action if respondents failed to sign the renewal lease with the mandatory upfront payment requirement built into the lease, the Court instructed petitioner to submit a lawful renewal lease to respondents, consistent with tenant's rights under the Rent Stabilization Code. Petitioner was specifically directed to eliminate the requirement in the renewal lease that the tenants first pay landlord all monies that he believed he was entitled to since the legitimacy of the amounts claimed was the subject of the pending non-payment proceeding. [1] Further, the Court indicated that tenants did not have to sign the unlawful renewal lease as submitted, and until such time as a lawful renewal lease was submitted to respondents, the time period within which respondents had to sign a renewal lease would be tolled. See discussion of 9 NYCRR §§2523.5 (c) (1), infra at 3. During the non-payment proceeding, landlord misrepresented to the Court that the building was not subject to rent stabilization laws and regulations. [2] Landlord's counsel in this holdover proceeding concedes that landlord's building is a rent-stabilized building.

         On September 22, 2017, landlord filed the instant holdover proceeding. [3]

         With knowledge that a holdover proceeding had been filed, this Court in its November 1, 2017, Bonham decision wrote:

... by filing such holdover proceeding, Petitioner went against the explicit instructions of the undersigned; from the July 13, 2017 pre-trial conference, when Petitioner was instructed by this Court not to include the amounts subject to dispute in the summary proceeding as a condition precedent for Respondents to renew their lease. Clearly, Petitioner thought little, if anything, of this Court's directive to submit a new lawful lease to Respondents and until such was done, the time period within which Respondents had to sign a renewal lease would be tolled. Putting aside the applicable case law, why wouldn't any landlord of a rent-stabilized apartment who has a Landlord-Tenant dispute, merely wait for the time to renew and then require that the tenant pay all fees the landlord believes he is entitled to as a condition precedent to obtaining a renewal, in the hopes that the tenant might decide not renew their lease, regardless of the legitimacy of their defense(s) or their rights to a renewal under rent stabilization laws, thereby obviating the need for a Judge to determine the legitimacy of landlord's claims? It is clear that Petitioner was trying to... manipulate the legal system to further his own self-interest id. at 8.

         CONCLUSIONS OF LAW

         Sections 2522.5 (b) (1) and 2523.5 of the RSC, which are codified within the New York Codes, Rules, and Regulations (NYCRR), require an owner to offer a tenant, in writing, the option of a one- or two-year renewal lease. The law indicates that such offer shall be made not more than 150 days and not less than 90 days prior to the end of the tenant's lease term, and may be served on the tenant by mail or personal delivery. The tenant's acceptance of such offer must be returned to the owner, either by mail or personal delivery, within 60 days. Further, under §2523.5 of the RSC, a Landlord must offer to "renew the lease or rental agreement at the legal regulated rent permitted for such renewal lease and otherwise on the same terms and conditions as the expiring lease" (emphasis added). The law can only be read to mean that the renewal lease contains only those provisions of a prior lease that were lawful. 9 NYCRR ยง2523.5 (c) (1) states that: " Where the owner fails to timely offer a renewal lease or rental agreement in accordance with subdivision (a) of this section, the one- or two-year lease term selected by the tenant shall ...


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