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Posted by TenantNet on December 21, 1997 at 12:35:00:

In Reply to: CAN THEY DO THIS? posted by Justin on December 19, 1997 at 11:41:11:

: My prop. management company is sticking by the claim that all their
guarantors must be from the Tri-State area because their collections
agency only covers these three states.
: My roommate, whose father is from Westchester and currently guarantees
the lease, is moving out. Neither my other roommate nor the new guy
coming in are from the Tri-State area, so I can't provide them with what
they have requested. Just the same, though, my folks are from
California and have filled out the paperwork to become the new guarantors.
: I've heard from people at the property company itself that exceptions
have been granted, but they couldn't confirm whether or not Californians
were among those exceptions.
: Long story short, can they do this? Someone in the know, please e-mail
me with your information and advice at justins@review.com. Thank you.

You should search our Housing Court Decisions. By my reading, if you play
your cards right, you don't need new guarantors. But be careful as this
is a rent stab unit and owners are under no obligation to offer a
renewal for a non-rent stab unit, and the guarantor gave written notice
as to SUCCESSIVE renewals.

Case Caption: Levine v. Segal

Issues/Legal Principles: Guarantor of tenant's lease cannot be held liable to successive renewal leases where guarantor notified landlord
of revocation of the guaranty

Keywords: guarantors; renewal leases

Court: Appellate Term, First Department

Judge: lower court: Hon. Margaret Taylor

Date: October 22, 1997

Citation: NYLJ, page 28, col 3

Referred Statutes: RSC 2523.5(a)

Summary:

The defendant in landlord's action for rent arrears had signed a guaranty to the lease for her son, the tenant of
record, agreeing to pay the rent in the event of his default. The guaranty agreed that she would continue to pay
the rent even if the lease is renewed, changed or extended. After it was renewed the defendant wrote the
landlord that she would no longer guarantee the tenant's obligation on any further lease renewals. When the
tenant defaulted, the landlord sued the guarantor and the lower court granted landlord a judgment against the
guarantor for the tenant's rent arrears. The Appellate Court held that in a Rent Stabilized lease which allows for
an indefinite number of renewals, a guarantor cannot be held indefinitely where the guarantor revokes its
liability, notwithstanding the language in the initial lease. The Appellate Term held that in light of the guarantor's
revocation, the landlord was not compelled to tender the tenant a renewal lease because the Code requires a
landlord to offer a renewal only "on the same terms and conditions as the expiring lease." The guaranty was a
material term of the original lease, and as a result of the revocation by the guarantor, the landlord was relieved
of its renewal obligations under the law.

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Comments:
: : My prop. management company is sticking by the claim that all their 
: guarantors must be from the Tri-State area because their collections 
: agency only covers these three states.
: : My roommate, whose father is from Westchester and currently guarantees 
: the lease, is moving out.  Neither my other roommate nor the new guy 
: coming in are from the Tri-State area, so I can't provide them with what 
: they have requested.  Just the same, though, my folks are from 
: California and have filled out the paperwork to become the new guarantors.
: : I've heard from people at the property company itself that exceptions 
: have been granted, but they couldn't confirm whether or not Californians 
: were among those exceptions.
: : Long story short, can they do this?  Someone in the know, please e-mail 
: me with your information and advice at justins@review.com.  Thank you.

: 
: You should search our Housing Court Decisions. By my reading, if you play
: your cards right, you don't need new guarantors. But be careful as this
: is a rent stab unit and owners are under no obligation to offer a 
: renewal for a non-rent stab unit, and the guarantor gave written notice
: as to SUCCESSIVE renewals.

: Case Caption: Levine v. Segal 

: Issues/Legal Principles: Guarantor of tenant's lease cannot be held liable to successive renewal leases where guarantor notified landlord
: of revocation of the guaranty 

: Keywords: guarantors; renewal leases 

: Court: Appellate Term, First Department 

: Judge: lower court: Hon. Margaret Taylor 

: Date:  October 22, 1997

: Citation: NYLJ, page 28, col 3 

: Referred Statutes: RSC 2523.5(a) 

: Summary:

: The defendant in landlord's action for rent arrears had signed a guaranty to the lease for her son, the tenant of
: record, agreeing to pay the rent in the event of his default. The guaranty agreed that she would continue to pay
: the rent even if the lease is renewed, changed or extended. After it was renewed the defendant wrote the
: landlord that she would no longer guarantee the tenant's obligation on any further lease renewals. When the
: tenant defaulted, the landlord sued the guarantor and the lower court granted landlord a judgment against the
: guarantor for the tenant's rent arrears. The Appellate Court held that in a Rent Stabilized lease which allows for
: an indefinite number of renewals, a guarantor cannot be held indefinitely where the guarantor revokes its
: liability, notwithstanding the language in the initial lease. The Appellate Term held that in light of the guarantor's
: revocation, the landlord was not compelled to tender the tenant a renewal lease because the Code requires a
: landlord to offer a renewal only "on the same terms and conditions as the expiring lease." The guaranty was a
: material term of the original lease, and as a result of the revocation by the guarantor, the landlord was relieved
: of its renewal obligations under the law. 



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