Opinion
Index No. LT-169-2022/HU
12-12-2022
CPM Tudor Village, LLC, Petitioner v. John Atkinson; MARGARET ATKINSON; JOHN DOE; JANE DOE, Respondent.
White, Cirrito, Nally & Lynch, LLP Jennifer D'Ambrosio, Esq. Attorney for Petitioner Nassau/Suffolk Law Services, Committee, Inc. Jameel Zadran, Esq. Attorney for Respondent
Unpublished Opinion
White, Cirrito, Nally & Lynch, LLP Jennifer D'Ambrosio, Esq. Attorney for Petitioner
Nassau/Suffolk Law Services, Committee, Inc. Jameel Zadran, Esq. Attorney for Respondent
C. Stephen Hackeling, J.
Upon the following papers numbered 1-19
Read on this Motion Notice of Motion and supporting papers 1-9
Affirmation in Opposition 10-17
Replying Affirmation and supporting papers by landlord 18, 19
Other
The petitioner landlord, CPM Tudor Village, LLC (hereafter "landlord") commenced this summary eviction non-payment proceeding pursuant to petition dated April 15, 2022. The tenants, John Atkinson and Margaret Atkinson (hereafter "the tenants"), interposed the affirmative defense that this matter is stayed pursuant to the provisions of New York State's "Emergency Rental Assistance Program" law (Chapter 417 (A)(B3)) of Chapter 56 of the laws of 2021, (hereafter "ERAP"), as a result of the filing of an ERAP application on January 19, 2022 as amended via subsequent ERAP filing in September 2022. The status of the application as detailed by the New York State Office of Temporary and Disability Assistance (hereafter" the Administering Agency") on the date of the hearing on this proceeding was "under review". By application dated October 20, 2022 the landlord moved to vacate the ERAP automatic stay.
The Undisputed Facts
1. The tenants submitted their first ERAP application in July, 2021. The application was approved and payments were sent by the Administering Agency in October, 2021. The ERAP funds were applied to 6 months in arrears and were accepted by the landlord.
2. The tenants made no further rent payments and again applied for ERAP on January 19, 2022.
3. In April, 2022, the landlord initiated this above captioned non-payment proceeding, wherein the rental arrears were demanded for the months of January, 2022, February, 2022, March, 2022 and April, 2022.
The tenants raise the complaint that the landlord's eviction filing violates the ERAP stay. The landlord asserts they were unaware of the second ERAP filing. The Court will not address this issue as the ERAP statute provides no relief for a violation other than the imposition of the stay after the Court is advised of an ERAP filing.
4. The tenants' second ERAP application was approved for months January - March 2022 and payment was sent on July 25, 2022. The landlord, after participating in the first ERAP application, and after receipt of the first payment, returned the second ERAP payment.
5. On September 9, 2022, the tenants filed a third ERAP application to include post April, 2022 rent arrears.
6. The tenants have tendered October 2022 rent which is the first month's rent due over the 15 months rent being processed in their ERAP application. The landlord has refused to accept the October 2022 rent.
7. The parties do not dispute the amount of the outstanding rent or the proper service of the requisite statutory "demand for rent".
The Law
The Covid-19 Emergency Eviction and Foreclosure Prevention Act of 2021, Chapter 56 of the laws of 2021, Part BB, Subpart A, § 8 states:
"Restrictions on eviction. Eviction proceedings for a holdover or expired lease, or non- payment of rent or utilities that would be eligible for coverage under this program shall not be commenced against a household who has applied for this program unless or until a determination of ineligibility is made.
If such eviction proceedings are commenced against a household who subsequently applies for benefits under this program, all proceedings shall be stayed pending a determination of eligibility. Evidence of a payment received pursuant to this act may be presented in such proceeding and create a presumption that the tenant's or occupant's rent or utility obligation for the time period covered by the payment has been fully satisfied." Emphasis added.
Part BB Subpart A, § 9 (2)(c) further states:
The tenant may use such provisional determination as an affirmative defense in any proceeding seeking a monetary judgment or eviction brought by a landlord for a non-payment of rent accrued during the same time period covered by the provisional payment for a period of twelve months for the determination of provisional eligibility. If the landlord has not accepted such provisional payment within twelve months of the determination the landlord shall be deemed to have waived the amount of rent covered by such provisional payment and shall be prevented from initiating a monetary action or proceeding, or collecting a judgment premised on the non-payment of the amount of rent covered by such provisional payment. Emphasis added.
Part BB Subpart A, § 9 (2)(d) further states:
Acceptance of payment for rent or rental arrears from this program shall constitute agreement by the recipient landlord or property owner: (i) that the arrears covered by this payment are satisfied and will not be used as the basis for a non-payment eviction; (ii) to waive any late fees due on any rental arrears paid pursuant to this program; (iii) to not increase the monthly rent due for the dwelling unit such that it shall not be greater than the amount that was due at the time of application to the program for any and all months for which rental assistance is received and for one year after the first rental assistance payment is received...
The landlord concedes that it accepted the first ERAP 6 months payment in October, 2021 thereby creating a one year "statutory" lease running through September, 2022. However, it is the landlord's contention that it is within its legal rights to refuse any further ERAP payments and terminate the landlord/tenant relationship for failure to pay rent during said post ERAP statutory lease period. It is alternatively argued that it may also terminate said statutory lease at the expiration of same and proceed via a holdover proceeding. The complicating factor and the crux of the tenants' argument is the assertion that the second ERAP payment created a new statutory lease running from July 25, 2022 (the payment date) through July, 2023.
While the Court agrees with this premise, it will not be discussed in this decision as this action was filed in the nature of a non-payment petition.
It is assumed that the tenants' posture is that when the third ERAP payment is made that a new one year statutory lease will be created.
The threshold issue presented is the landlord's contention that it can refuse to participate in the ERAP program and avoid its automatic stay protections. The landlord cites to Actie v. Gregory, 74 Misc.3d 1213(A) (Civ. Ct. Kings Co. 2022) for the proposition that a landlord can decline to participate and refuse ERAP funds. Part BB Subpart A, § 9 (2)(c) clearly does not allow for a declination of landlord participation. It expressly provides that a refusal is a waiver of outstanding rent. The Actie Court simply opined that a landlord may refuse participation by invoking its ERAP exception right (Sec. (8 (IV)) to "self occupancy" of a real property residential premises. Said decision is most often cited for establishing the legal doctrine of "ERAP futility" wherein respondents in holdover proceedings have no leasehold interest which can be resurrected via the payment of rental arrears. In such a case a landlord may elect not to receive ERAP funds so long as it is willing to accept the financial consequences of such a waiver. See, Lai v. Muamba, 2022 WL 1837560 (NY Co. Sp. Ct. 2022). In that circumstance no statutory lease is created wherein one did not exist previously. See generally, 178 Broadway Realty Corp. v. Charles, 75 Misc.3d 937 (Civ. Ct. Kings Co. 2022). The Court notes that it need not differentiate the "waiver doctrine" from the Muamba Court decision as it was stated only in the nature of dicta in a holdover proceeding and this is a non-payment proceeding arising from a previously established ERAP statutory lease.
The Court notes that it made an incorrect assumption in a prior reported case finding that in the event landlords refuse to participate in ERAP, that a stay for up to 15 months is appropriate as ERAP will make an alternative distribution to the tenant who can then use it to pay the landlord. Clearly the statute provides for waiver of ERAP funding if unclaimed by the landlord after 180 days. The import of which is that even if the landlord/tenant does not receive the funds, the tenant still gets the benefit of the ERAP stay.
The landlord's next assertion is that the tenants are not allowed a second (or indeed third) one year statutory lease extension. The Court's review of the legislative history and preamble to the ERAP law indicates that the fundamental premise of the state legislature's intent was to afford a 15 month rental payment reprieve (via state subsidy) for individuals effected by Covid's economic impact. See generally, Raci v. Lopez, 75 Misc.3d 1237(A) (Yonkers City Ct. 2022). As such, it is the Court's opinion that consecutive partial payments (which later necessitates subsequent ERAP awards) do not create new one year statutory leases after each payment. This posture is confirmed by the legislature's use of the words "one year after the first rental assistance payment is received". Emphasis added.
The sole limiting factor to the existence of a statutory lease extension is the legislature's requirement that after the government's 15 month subsidy; tenant's must pay monthly rent. It is undisputed that the 15 month subsidy in this case satisfies any rent requirement due running through September 2022. This Court has previously opined that any stay arising out of the ERAP program is limited to 15 months and that the failure to pay rent after 15 months, even while awaiting an ERAP decision, is grounds to issue a warrant of eviction. See generally, Kristiansen v. Serating, 75 Misc.3d 331 (Suf. Co. Dist. Ct., 2022).
In the proceeding at bar, the tenants have tendered October's (2022) rent and are awaiting an ERAP award running through September. As such, they are current on their present one year statutory lease which ended September 30, 2022.
Accordingly, the Court denies the landlords' October 22, 2022 application to vacate the ERAP stay and is compelled to dismiss the above captioned non-payment rent proceeding as no rent is now due. This is without prejudice to commencing a new non-payment proceeding for a post October 2022 rent default or a holdover proceeding after the statutory lease expires and the appropriate notice to quit is served.