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Chronic Non-Payment

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Chronic Non-Payment

Postby TenantNet » Wed Aug 20, 2014 7:59 am

Also called Chronic Rent Delinquency, a landlord in NYC may bring a Chronic Non-Payment Holdover proceeding, claiming the tenant has committed a substantial breach of the lease by his/her chronic non-payments, forcing the landlord to commence a number of non-payment proceedings within a short period of time.

Below is a discussion from the August 13, 2014 New York Law Journal. Also below is the decision in Herald Towers from 2001 with a discussion whether or not a Chronic Non-Pay is "curable," thereby requiring a landlord to serve a Notice to Cure prior to the Notice of Termination and petition in a new holdover proceeding.

Landlord-Tenant—Chronic Non-payment Holdover Proceeding Dismissed—Four Non-payment Proceedings Were Insufficient to Sustain A Chronic Delinquent Holdover Proceeding Where Only Two Resulted In Judgments Against the Tenant and the Tenant Had Asserted Warranty of Habitability Defenses

A landlord commenced a chronic non-payment holdover proceeding against a rent-stabilized tenant. The tenant moved to dismiss "on the grounds that the four non-payment proceedings upon which this proceeding" was predicated upon are "insufficient to support the commencement of a chronic non-payment proceeding."

The court explained that:

[in a chronic non-payment holdover proceeding] there is no "magic number" of prior proceedings required, as each case is sui generis"….While there is no "magic number," courts have found that the commencement of frequent non-payment proceedings in a short amount of time, due to a tenant's "'long term, unjustified and persistent failure' to pay rent as it became due" meets the requirements in a chronic non-payment petition….

The landlord had commenced "four non-payment proceedings against the [tenant]—two in 2010, which resulted in judgments, one in 2012 and one in 2013, for a total of four proceedings in four years." The tenant had asserted "a warranty of habitability defense in the 2012 and 2013 proceeding[s], and the DHCR issued a rent reduction order due to violations at the premises" in 2013.

The court held that in view of the tenant's "warranty of habitability defenses asserted…, the issuance of rent reduction order…for violations at the premises, and the lack of frequency of cases in the past four years," the proceeding should be dismissed. The court emphasized that only two non-payment proceedings resulted in judgments against the tenant, warranty of habitability defenses had been asserted, and the tenant had resided in the apartment for 20 years. Additionally, "in the two most recent proceedings, the [tenant] satisfied the petitions in court…." The court concluded that the alleged predicate proceedings did "not demonstrate that the tenant has breached a substantial obligation of his tenancy" and the court dismissed the proceedings with prejudice.

Kerem Realty v. Hussein, 91560/13, NYLJ 1202655815017, at *1 (Civ., KI, Decided May 7, 2014), Scheckowitz, J.
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Re: Chronic Non-Payment

Postby TenantNet » Wed Aug 20, 2014 8:07 am

Civil Court, City of New York,New York County.

HERALD TOWERS LLC, Petitioner, v. Darrell B. PERRY, et al., Respondents.
Decided: December 19, 2001


John D. Gorman, New York City, for Darrell B. Perry, respondent.

Borah, Goldstein, Altschuler, Schwartz & Nahins, P.C., New York City (Gregory G. Vail of counsel), for petitioner.

Petitioner commenced this holdover summary proceeding to recover possession of apartment A15-14, located at 50 West 34th Street a/k/a 1282 Broadway, in Manhattan (the “Apartment”), after expiration of a notice of termination, alleging that respondent had violated a substantial obligation of his tenancy by “consistently, chronically and unjustifiably exhibit [ing] a pattern of late payment of rent, refusing to pay rent when due, and/or compell[ing] the landlord to commence numerous proceedings in the New York City Housing Court to collect rent.”   Respondent has interposed a written answer asserting a general denial, and affirmative defenses of failure of the petition to state a cause of action for failing to plead service of a notice to cure, and of acceptance of rent.   Respondent now moves to dismiss this proceeding based upon the failure to serve a notice to cure;  petitioner cross-moves for summary judgment on the grounds that no notice to cure is necessary and that respondent asserts no viable defense to this proceeding.

The central issue to each party's motion is whether, in a holdover proceeding alleging violation of a substantial obligation of tenancy through the chronic non-payment of rent, the petitioner is required to plead and prove service of a notice to cure.   It is undisputed that no notice to cure was served;  the notice of termination asserts that “it has been determined that a breach of a substantial obligation of tenancy for the chronic late and/or nonpayment of rent is not subject to cure as a matter of law and accordingly this is the only Notice you will receive.”   Respondent, in the motion-in-chief, urges that petitioner misapprehends the law, and that a notice to cure must be served pursuant to both the Rent Stabilization Code (“RSC”) and respondent's lease.

The RSC provides, in pertinent part, that:

Without the approval of the DHCR, an action or proceeding to recover possession of any housing accommodation may only be commenced after service of the notice required by section 2524.2 of this Part (Termination Notices), upon one or more of the following grounds, wherein wrongful acts of the tenant are established as follows:

(a) The tenant is violating a substantial obligation of his or her tenancy other than the obligation to surrender possession of such housing accommodation, and has failed to cure such violation after written notice by the owner that the violations cease within ten days;  or the tenant has willfully violated such an obligation inflicting serious and substantial injury upon the owner within the three month period immediately prior to the commencement of the proceeding.

(RSC § 2524.3).   Respondent's lease provides, at paragraph 17, that:

[y]ou default under the Lease if You act in any of the following ways:  (a) You fail to carry out any agreement or provision of this Lease․ If You do default in any one of these ways, other than a default in the agreement to pay rent, Owner may serve You with a written notice to stop or correct the specified default within 10 days.   You must then either stop or correct the default within 10 days, or, if You need more than 10 days, You must begin to correct the default within 10 days and continue to do all that is necessary to correct the default as soon as possible.

Respondent asserts that the regulatory and lease provisions mandate service of a notice to cure prior to termination of respondent's tenancy.   Respondent correctly anticipates petitioner's reliance on Adam's Tower Limited Partnership v. Richter, 186 Misc.2d 620, 717 N.Y.S.2d 825 (App. Term 1st Dept.2000), and upon 3363 Sedgwick L.L.C. v. Medina, 187 Misc.2d 421, 723 N.Y.S.2d 592 (App. Term 1st Dept.2000).   Petitioner's position rests heavily upon the holding in Adam's Tower, as petitioner asserts that “[t]he Adam's Tower decision not only relieves petitioner from the obligation to serve a notice to cure, but requires that this Court decline to apply the post judgment cure of RPAPL § 753(4) if summary judgment is appropriately rendered against respondent.”

In Adam's Tower, the court affirmed:

that part of the order holding that a notice to cure was not required because the cumulative pattern of tenant's course of conduct was incapable of ‘cure’ within ten days (National Shoes, Inc. v. Annex Camera & Electronics, Inc., 114 Misc.2d 751, 452 N.Y.S.2d 537 [Civ.Ct. N.Y. Co.1982] ).   The fact that a lease or statute provides time for a cure “does not necessarily imply that a means or method to cure must exist in every case.”  (National Shoes v. Annex Camera, [114 Misc.2d at 752, 452 N.Y.S.2d 537] ).

(Adam's Tower, 186 Misc.2d at 622, 717 N.Y.S.2d 825).   In 3363 Sedgwick, the court held that “[s]ervice of a formal notice to cure was not a sine qua non of the landlord's maintenance of this summary holdover proceeding based upon allegations that the tenant's history of chronic rent defaults constituted a violation of a substantial obligation of the tenancy, since ‘the cumulative pattern of [tenant's] course of conduct was incapable of ‘cure’ within ten days' (Adam's Tower Ltd. Partnership v. Richter, [186 Misc.2d 620, 622, 717 N.Y.S.2d 825 [App. Term, 1st Dept. 2000] ] )” (3363 Sedgwick, 187 Misc.2d at 422, 723 N.Y.S.2d 592.).  Seminal to both these decisions is the court's determination that ten days provides insufficient time to effect a cure of chronic nonpayment of rent.

There has been considerable litigation concerning the differing remedies and standards of proof in those chronic nonpayment holdovers styled as nuisance proceedings and those alleging violations of substantial obligations of tenancy and the intermingling of those standards.   A petitioner seeking to recapture an apartment because of chronic nonpayment of rent may choose to bring a proceeding based upon a theory that the chronic nonpayment of rent constitutes either a violation of a substantial obligation of tenancy or that chronic nonpayment of rent constitutes a nuisance. The RSC also permits, without the service of a notice to cure, service of a termination notice on the grounds that the “tenant has willfully violated such an obligation inflicting serious and substantial injury upon the owner within the three month period immediately prior to the commencement of the proceeding” (RSC § 2524.3[a] ).   This ground plays no part in this proceeding as it is neither addressed by the notice of termination nor by the petition.

To establish that chronic nonpayment of rent constitutes a nuisance, the petitioner must demonstrate that “it was compelled to bring numerous nonpayment proceedings within a relatively short period and that the tenant's nonpayment was willful, unjustified, without explanation, or accompanied by an intent to harass the landlord ” (25th Realty Associates v. Griggs, 150 A.D.2d 155, 156, 540 N.Y.S.2d 434 [1st Dept.1989] )(emphasis supplied).   If the landlord succeeds in meeting this significant burden of proof, upon entry of judgment, respondent is not entitled to any opportunity to cure (Sharp v. Norwood, 223 A.D.2d 6, 11, 643 N.Y.S.2d 39 [1st Dept.], lv. granted, 231 A.D.2d 974, 647 N.Y.S.2d 939 [1st Dept.1996], aff'd 89 N.Y.2d 1068, 659 N.Y.S.2d 834, 681 N.E.2d 1280 [1997], rearg. den., 90 N.Y.2d 889, 661 N.Y.S.2d 833, 684 N.E.2d 283 [1997] ) (holding that “a nuisance found to be caused by chronic late payment of rent cannot be cured”).   By contrast, a landlord seeking to establish that a tenant's chronic nonpayment of rent constitutes a violation of a substantial obligation of tenancy faces a different and less stringent burden of proof.   A landlord may demonstrate this by showing that it has been “repeatedly forced to institute nonpayment proceedings and to serve rent demands on respondent to collect chronically late rental payments” (Sharp v. Norwood, 89 N.Y.2d 1068, 1069, 659 N.Y.S.2d 834, 681 N.E.2d 1280 [1997], rearg. den., 90 N.Y.2d 889, 661 N.Y.S.2d 833, 684 N.E.2d 283 [1997] ).

A nuisance created by chronic non-payment of rent necessarily involves violation of a substantial obligation of tenancy.   It has been held that “while a nuisance based on chronic late payment of rent also constitutes a breach of a substantial obligation of the lease, the type and degree of evidence required to establish a nuisance differs from the proof needed to show a breach of a leasehold obligation․ As stated above, the landlord must prove more than a mere pattern of late payment of rent” (Sharp v. Norwood, 223 A.D.2d at 11, 643 N.Y.S.2d 39).   The court concluded that a significant consideration for a landlord in selecting its theory of litigation is the availability of an opportunity to cure;  the court noted that “t is quite probable that the landlord did not predicate this action upon a breach of a lease provision so as to avoid the remedial prescription of RPAPL § 753(4), which grants a 10 day stay for tenant to cure the breach.   By contrast, a nuisance found to be caused by chronic late payment of rent cannot be cured” (Id. at 11, 643 N.Y.S.2d 39).   The court did not eliminate the requirement for an opportunity to cure when there exists difficulty or improbability that such a cure can be effected (See, e.g. National Shoes v. Annex Camera and Electronics, Inc., 114 Misc.2d at 752, 452 N.Y.S.2d 537 [“But, there is no contractual or statutory right inuring to a party, of a means to cure.   The fact that the lease provides time for a cure does not necessarily imply that a means or method to cure must exist in every case.”] ).   The court in National Shoes found the notice to cure sufficient, although questioning the utility of the opportunity it afforded the tenant.

Courts have recognized that landlords may commence a holdover proceeding based on either nuisance or breach of a substantial obligation of tenancy due to chronic nonpayment of rent, that the burden of proof is greater when the claim is one of nuisance, and that, when a petitioner claims a breach of a substantial obligation, a respondent has the right to attempt to effect a cure.   This is consistent with the compelling public policy to avoid the forfeiture of leases (See Sharp v. Norwood, 223 A.D.2d at 11, 643 N.Y.S.2d 39;  Marbar, Inc. v. Katz, 183 Misc.2d 219, 701 N.Y.S.2d 884 [Civ.Ct., N.Y. Co.2000];  Semans Family Ltd. Partnership v. Kennedy, 177 Misc.2d 345, 348, 675 N.Y.S.2d 489 [Civ. Ct., N.Y. Co.1998] ).   Specifically, it has been held that “the policies underlying passage of the rent stabilization laws are generally better served by holding out to the tenant the opportunity to cure the breach of his rent obligations” (Park Summit Realty Corp. v. Frank, 107 Misc.2d 318, 323, 434 N.Y.S.2d 73 [App. Term 1st Dept.1980], aff'd 84 A.D.2d 700, 448 N.Y.S.2d 414 [1st Dept.1981], aff'd 56 N.Y.2d 1025, 453 N.Y.S.2d 643, 439 N.E.2d 358 [1982] ).   This compelling public policy consideration requires this court to recognize and apply the differing standards of proof, procedural requirements and remedies for nuisances and violations of substantial obligations of tenancy.

Petitioner's assertion that Adam's Tower vitiates in all instances the requirement of a notice to cure, notwithstanding the language of the RSC or any lease provisions, is not well taken.  Adam's Tower contemplates a case by case analysis;  the decision's wording is equivocal, the court noting that the language of a statute or a lease allowing time for a cure “ ‘does not necessarily imply that a means or a method to cure must exist in every case’ ” (Adam's Tower v. Richter, 186 Misc.2d 620, 622, 717 N.Y.S.2d 825 [quoting National Shoes, Inc. v. Annex Camera & Electronics, Inc., 114 Misc.2d 751, 452 N.Y.S.2d 537 [Civ.Ct. N.Y. Co.1982] ](emphasis supplied)).   Petitioner relies on the principle enunciated in National Shoes to support its contention that no notice to cure is required;  the court never had that issue before it, as petitioner had served a notice to cure.   The court principally considered whether the notice to cure was illusory because cure could not be effected in the allotted ten days.   The court held that a notice to cure past conduct, giving the time contemplated by the lease, sufficed;  the tenant could in that time embark on a course of conduct designed to prevent future breaches of the obligation to pay rent in a timely manner though the court hypothesized that such conduct would not constitute a cure.   Rather than mandating that there are no circumstances under which a landlord must serve a notice to cure, the decision merely contemplates whether there are some circumstances under which a notice to cure is not necessary.   The decisions in Sharp v. Norwood and in Park Summit v. Frank, as affirmed and re-affirmed, set forth the requirements for a notice to cure and the rationale behind that requirement;  they offer compelling guidance.   Indeed, courts have contemplated whether, under some circumstances, nuisance, generally considered non-curable, is capable of cure (See 18-62 Realty v. Levy, N.Y.L.J., December 14, 1999, at 26, c. 1 [App. Term 1st Dept.] ). The question that remains is whether the facts of this case merit an exception to the rule enunciated in Sharp and Park Summit, such as the court apparently found in Adam's Tower.

Respondent's lease establishes that the failure “to carry out any agreement or provision of this lease” constitutes a default, and that such a default entitles the owner to serve the tenant “with a written notice to stop or correct the specified default within 10 days.”   The lease recognizes that some defaults may be incapable of correction within that ten day period, and provides for more than one means of curing defaults.   A tenant in default under the lease must “either stop or correct the default with 10 days, or, if You need more than ten days, You must begin to correct the default within 10 days and continue to do all that is necessary to correct the default as soon as possible ” (emphasis supplied).   Respondent's lease not only provides a cure period for defaults capable of cure within ten days, but also for defaults that, by their nature, cannot be cured within a ten day period.  

The fact that a tenant whose lease does not contain such provisions may not have a similar right to cure does not vitiate the provisions of respondent's lease.

It has been held that “[o]rdinary principles of contract law and construction are applicable to leases for rent-stabilized apartments (Matter of Century Operating Corp. v. Popolizio, 60 N.Y.2d 483, 489, 470 N.Y.S.2d 346, 458 N.E.2d 805 [1983] ).   The statutory scheme simply establishes the minimum rights to be accorded tenants, and does not preclude a contract that gives a tenant greater rights.”  (Minick v. Park, 217 A.D.2d 489, 490, 629 N.Y.S.2d 754 [1st Dept.1995] ).   Giving effect to the provisions of respondent's lease calling for a notice to cure would not be an affront to public policy (See, e.g., Rima 106 L.P. v. Alvarez, 257 A.D.2d 201, 690 N.Y.S.2d 40 [1st Dept.1999] ), as the provision merely expands a right granted by statute even if a tenant's lease includes no provision allowing for defaults to be cured.   Respondent could satisfy the terms of the lease by commencing and continuing a pattern of conduct consistent with the requirements of the lease for timely payment of rent.

The argument, advanced by petitioner, that there is no cure for past conduct, is seriously at odds with the terms of the lease, which, after all, was offered by petitioner to respondent.   There can never be a ‘cure’ for past conduct, as one cannot undo the past;  for any default, the concept of a cure entails future conduct conforming to the requirements of lease and law (See 326-33 East 35th Street v. Sofizade, N.Y.L.J., August 1, 2001, at 17, c. 1 [Civ.Ct. N.Y. Co.] ).   The regulatory scheme and the provisions of respondent's lease both contemplate an opportunity to cure, the lease addressing specifically those situations in which effecting a cure may not be possible within ten days.  

Whether or not respondent has cured the breach is a question appropriately committed to the trier of fact.   Petitioner unilaterally determined not to serve a notice to cure, deprived respondent of the opportunity to attempt a cure by doing so, and appropriated a determination properly within the province of the court:  whether cure was possible, and if so, whether a cure had occurred.

Petitioner and respondent entered into a lease including provisions requiring a notice to cure in the event that respondent breached a provision of the lease, and requiring the respondent either to cure the breach within ten days, or to begin to cure the breach within ten days if it could not be cured in that period.   Service of a notice to cure was a prerequisite to this holdover proceeding, and petitioner's concession that no such notice was served renders the petition fatally defective.

Accordingly, Respondent's motion is granted for the reasons set forth above and this proceeding is dismissed.   Petitioner's cross-motion is denied as moot.

LAURIE L. LAU, J.

[i]- See more at: http://caselaw.findlaw.com/ny-civil-cou ... h5UWL.dpuf
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Re: Chronic Non-Payment

Postby TenantNet » Wed Oct 01, 2014 3:30 am

Chronic Non-Payment Holdover Proceedings
Warren A. Estis and Michael E. Feinstein,
New York Law Journal, October 1, 2014

Two very recent decisions issued by the Civil Court—one in New York County[1] and another in Kings County[2]—concern the bringing of holdover proceedings based on chronic non-payment of rent. Since we have not written about this topic in over 12 years (since our June 2002 article in this publication), this column will present a brief overview of the caselaw in this area.

Background

Prior to the Court of Appeals' 1997 decision in Sharp v. Norwood,[3] chronic non-payment situations were addressed based on two approaches. One approach was to bring a holdover proceeding on the ground that the chronic late or non-payment of rent constituted a nuisance warranting eviction. Another approach was to bring a holdover proceeding based on the assertion that the chronic late or non-payment of rent was a breach of a substantial obligation of the tenancy.

After Norwood, however—in which the Court of Appeals, in affirming the Appellate Division's dismissal of a nuisance holdover proceeding, set forth a strict standard of proof which must be established for nuisance holdovers based on chronic non-payment—most cases were brought based on chronic non-payment being a violation of a substantial obligation of the tenancy. The Appellate Division in Norwood stated as follows with respect to the strict standard required to prove that chronic non-payment constitutes a nuisance:

In order to establish that tenant's untimely rent payments constituted a nuisance, the landlord must demonstrate that it 'was compelled to bring numerous non-payment proceedings within a relatively short period and that the tenant's non-payment was willful, unjustified, without explanation, or accompanied by an intent to harass the landlord.'[4]


The Court of Appeals in Norwood noted the lesser standard of proof required for a chronic non-payment proceeding based on the breach of a substantial obligation of the tenancy:

The specific harm petitioners claimed to have suffered as a result of respondent's conduct was that they were repeatedly forced to institute nonpayment proceedings and to serve rent demands on respondent to collect chronically late rental payments. While these facts might have supported an eviction proceeding on the ground that respondent violated a 'substantial obligation' of her tenancy, petitioners did not assert this ground in their holdover petition. Having opted to pursue their remedy in the context of a nuisance case, petitioners were required to establish that respondent's conduct 'interfered with the use or enjoyment' of their property.[5]


Prior Proceedings

In chronic non-payment proceedings based on non-payment being a breach of a substantial obligation of the tenancy, "there is no 'magic number' of prior proceedings required, as each case is sui generis."[6] Furthermore, "the number of nonpayment actions commenced is relevant only in the context of the entire circumstances surrounding the alleged withholding of rent."[7] Courts, however, have found that the commencement of frequent non-payment proceedings in a short amount of time, due to a tenant's "unjustified" failure to pay rent as it became due, sets forth a viable claim for eviction based on the chronic non-payment of rent. See Definitions Personal Fitness v. 133 E. 58th St.[8] (10 non-payment proceedings in seven years); Adams Tower v. Richter[9] (nine non-payment proceedings in three years); Pamela Equities v. Coverton,[10] (seven non-payment proceedings in two years); Chelsea 19 Assoc. v. Minetti,[11] (five non-payment proceedings in two years); 2564 Co. v. D'Addario[12] (11 non-payment proceedings in one and a half years).

Surrounding Circumstances

In addition to the number of non-payment proceedings commenced in a short amount of time, "[t]he circumstances and reasons for the tenant's rent defaults must be considered in determining whether there is adequate proof to sustain a petition for chronic rent delinquency."[13] Where the tenant's failure to pay rent in the prior proceedings was without justification or excuse, courts will find in favor of the landlord.

In Adams Tower, supra, the landlord commenced a summary holdover proceeding against a rent-stabilized tenant based on the chronic non-payment of rent being a breach of a substantial lease obligation. The evidence established that the landlord was required to commence nine non-payment proceedings during a three-year period, which were all resolved by the tenant agreeing to pay the arrears in full, without any abatement of rent.

In granting the landlord's motion for summary judgment, the Appellate Term stated that "[a] history of repeated nonpayment proceedings brought to collect chronically late rental payments supports an eviction proceeding on the ground that the tenant has violated a 'substantial obligation" of the tenancy."[14] The court, in ruling in the landlord's favor, noted that the proceeding "was not brought upon the ground of nuisance, which requires a showing of 'aggravating circumstances,' but upon the allegation that tenants' 'long-term, unjustified and persistent failure' to pay rent as it became due breached a material leasehold obligation" which "breach is firmly documented in the record, particularly in the absence of a bona fide habitability claim or dispute as to the amount of rent owed."[15]

Importantly, the Appellate Term in Adams Tower also affirmed the holding of the Civil Court that "a notice to cure was not required because the cumulative pattern of tenants' course of conduct was incapable of 'cure' within 10 days."[16] The court noted that "[t]he fact that a lease or statute provides time for a cure 'does not necessarily imply that a means of method to cure must exist in every case.'"[17] In addition, and for "parallel reasons," the court "decline[d] to apply the post-judgment cure of RPAPL §753[4] to this type of default."[18]

Recently, in Definitions Personal Fitness, supra, the Appellate Division, First Department reaffirmed that chronic non-payment is a "type of default" that could not be cured within the cure period in the lease and that a notice of default is not necessary for an action based on chronic non-payment.[19]

Two recent decisions issued by the New York City Civil Court, however, demonstrate that chronic non-payment holdover proceedings will not be sustained where there was some justification for the tenant's non-payment of rent in the non-payment proceedings.

In the May 2014 decision of Civil Court Kings County Judge Bruce E. Scheckowitz in Kerem Realty v. Hussein,[20] the landlord commenced a chronic non-payment holdover proceeding against the rent-stabilized tenant based on having commenced four non-payment proceedings in four years. In the first non-payment proceeding, the matter was settled by stipulation of settlement, in which the landlord discontinued the proceeding and agreed to inspect and repair the oven as required by law on designated access dates.

In the second non-payment proceeding, the tenant established that the landlord failed to make required repairs and, as a result, the tenant filed a DHCR complaint which resulted in a DHCR rent reduction order. With respect to the two additional non-payment proceedings, those resulted in judgments against the tenant. The tenant maintained, however, that those proceedings "were a result of his losing a job and that he did not have an issue paying rent after that."

Tenant moved to dismiss the landlord's chronic non-payment holdover petition on the grounds that the four non-payment proceedings were insufficient to support the holdover proceeding. In ruling in favor of the tenant and dismissing the proceeding, the court found as follows:

In light of respondent's warranty of habitability defenses asserted in the non-payment proceeding listed in this chronic delinquent holdover petition, the issuance of a rent reduction order by the DHCR for violations at the premises, and the lack of frequency of cases in the past four years, the court finds that this proceeding should be dismissed. The four non-payment proceedings upon which this holdover is predicated are not sufficient to sustain a chronic delinquent holdover proceeding, particularly here where only two resulted in judgments against the tenant, warranty of habitability defenses were asserted, and the tenant is a 20-year tenant. Notably, in the two most recent proceedings, the respondent satisfied the petitions in court. The non-payment proceedings upon which this holdover are predicated clearly do not demonstrate that respondent has breached a substantial obligation of his tenancy.[21]


In the July 2014 decision of Civil Court, New York County Judge Brenda S. Spears in Chin Cano Realty v. Roa,[22] the landlord commenced a chronic non-payment holdover proceeding against the tenant based on the commencement of three non-payment proceedings against the tenant in a three-year period. According to the decision, the second non-payment proceeding involved "a legitimate dispute as to the amount owed,"[23] in that it was undisputed that the tenant "filed a rent overcharge complaint with the DHCR, which issued a decision finding that respondent was entitled to a refund of $8,594.30."[24]

As to the two other non-payment proceedings upon which the landlord relied, while the tenant had alleged a lack of heat as a breach of the warranty of habitability, the court found that it was "unclear from the papers submitted whether the conditions in the apartment precipitated the withholding of rent."[25] The court found, however, that even if the tenant's failure to pay rent in those proceedings was unjustified, those two proceedings alone were "insufficient to establish a history of repeated nonpayment proceedings"[26] in order to show that tenant breached a substantial obligation of the tenancy. Thus, the court granted the tenant's motion for summary judgment dismissing the proceeding.

Conclusion

Landlords faced with having to commence multiple non-payment proceedings against defaulting tenants within a relatively short amount of time have a powerful weapon: the chronic non-payment holdover proceeding. In such proceedings, courts will find that a tenant has breached a substantial obligation of its tenancy, justifying the termination of the lease, where multiple non-payment proceedings have been commenced in a short period of time based on the tenant's failure to pay rent without justification. If, however, the tenant had asserted valid defenses to non-payment in the non-payment proceedings, the court may very well conclude that a substantial obligation of the tenancy has not been breached.

ENDNOTES:

1. Chin Cano Realty v. Roa, NYLJ, Aug. 6, 2014, 1202665682144 (Civ. Ct. N.Y. Co.).
2. Kerem Realty v. Hussein, NYLJ, May 21, 2014, 1202655815017 (Civ. Ct. Kings Co.).
3. 89 N.Y.2d 1068 (1997).
4. Sharp v. Norwood, 223 A.D.2d 6, 8 (1st Dept. 1996), aff'd 89 N.Y.2d 1068 (1997).
5. 89 N.Y.2d at 1069 (internal citations omitted).
6. Sharp, supra, 223 A.D.2d at 9.
7. Greene v. Stone, 160 A.D.2d 367, 368 (1st Dept. 1990).
8. 107 A.D.3d 617 (1st Dept. 2013).
9. 186 Misc. 2d 620 (App. Term 1st Dept. 2000).
10. NYLJ, July 18, 1990, p. 18, col. 1 (App. Term 1st Dept.).
11. NYLJ, Oct. 27, 1986, p. 13, col. 6 (App. Term 1st Dep't).
12. 35 Misc. 2d 176 (App. Term 1st Dept. 1961).
13. East End Residences v. Dolen, NYLJ, April 14, 1997, p. 27, col. 2 (App. Term 1st Dept.).
14. Id. at 621.
15. Id. at 621-22 (internal citations omitted).
16. Id. at 622.
17. Id.
18. Id.
19. 107 A.D.3d 647-48.
20. NYLJ, May 21, 2014, 1202655815017.
21. Id. at *6 (internal citation omitted).
22. NYLJ, Aug. 6, 2014, 1202665682144 (Civ. Ct. N.Y. Co.).
23. Id. at *3.
24. Id.
25. Id.
26. Id. at *3-4.
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Re: Chronic Non-Payment

Postby TenantNet » Thu Jul 28, 2016 2:02 pm

Harlan Housing Assoc. v. Reeves, L&T 251804/15
July 28, 2016

Cite as: Harlan Housing Assoc. v. Reeves, L&T 251804/15, NYLJ 1202763654502, at (Civ., NY, Decided June 27, 2016)

CASENAME

Harlan Housing Associates, Plaintiff v. Yvette Reeves, Defendant
L&T 251804/15
Judge Ulysses Leveret
Read Summary of Decision

Decided: June 27, 2016

ATTORNEYS
Counsel for Petitioner: Gutman Mintz, Baker & Sonnenfeldt.
Counsel for Respondent: Melissa Banks and Daniel Freeman, Manhattan Legal Services.

Respondent's motion for summary judgment based upon petitioner's failure to raise a material issue of fact is granted.

Petitioner commenced this holdover proceeding for chronic rent delinquency (CRD) based upon respondent's failure to timely pay rents requiring a nonpayment proceeding in 2008, 2009, 2013 and 2014. Respondent by summary judgment seeks to dismiss the CRD claim as not being established. Respondent must establish its defense sufficiently to warrant the Court as a matter of law in directing judgment in his favor. See CPLR 3212(b)

In 25th Realty Associates v. Griggs 150 A.D. 2d 155 (1989), the Appellate Division stated that to evict a tenant for chronic late payment of rent, the landlord must show that it was compelled to bring numerous nonpayment proceedings within a relatively short period and that the tenant's nonpayment was willful, unjustified and without explanation. See 25TH Realty Associates v. Griggs, supra.

Here, two of the four nonpayment proceedings relied on by petitioner to show breach of the lease by chronic rent delinquency are L&T# 251560/2008 filed 7/14/2008 and L&T# 251378/2009 filed 6/30/09. Petitioner is banned from seeking relief for breach of contract which occurred prior to the six year statute of limitation. See CPLR 213 (2) and Westminister Props, Ltd v. Kass 163 Misc 2d 773 (App Term 1st Dept 1995). The remaining proceedings under L&T#251373/2013 filed 5/31/2013 and L&T # 250770/2014 filed 4/24/2014 are insufficient to show numerous nonpayment proceedings compelled to be brought within a relatively short span of time. See 25th Realty Associates v. Griggs, supra and 1675 Realty LLC v. Catillo NYLJ 5/16/05 28:12; Adam's Tower Ltd Partnership v. Richter, 186 Misc 2d 620 (AT 1st Dept 2000 and Chama Holding Corp. v. Taylor 37 Misc 3d 70 (AT 1st Dept 2012).

Petitioner herein asserts that "there are still two nonpayment proceedings commenced in two years, which clearly rises to the level of breach of a substantial obligation of the tenancy." However, petitioner's proposition of CRD based on two cases within two years has not been supported by any case law or statute cited by petitioner.

In addition to the number of nonpayment proceedings, the court examines the context of the entire circumstances surrounding the alleged withholding of the rents including a bonafide warranty of habitability claim or disputed amount of rents owed.

Here, the proceedings under L&T# 251373/2013 and L&T# 250770/2014 were both settled by stipulations which included requests for the same type of repairs on 7/18/2013, 8/14/2015 and 11/10/2014. While the stipulation is not definitive proof of a bonafide warranty of habitability claim under RPAPL 235-b or that the amount of rent was disputed, this Court finds the infrequent isolation of the two cases within two years of a six year statute of limitation is insufficient as a matter of law. See Adam's Tower v. Richter, supra.

Based on the facts presented in this case, the motion for summary judgment is granted and the petition is dismissed without prejudice.

This is the decision and order of this Court.

Dated: June 27, 2016
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