Opinion
No. L & T73307/2014.
01-21-2015
ST. NICHOLAS AVENUE HDFC, Petitioner–Landlord, v. Kimberly RASHEED, Respondent–Tenant.
Rose & Rose, by David P. Haberman, Esq., New York, Attorneys for Petitioner. Kimberly Rasheed, New York, Respondent Pro Se.
Rose & Rose, by David P. Haberman, Esq., New York, Attorneys for Petitioner.
Kimberly Rasheed, New York, Respondent Pro Se.
SABRINA B. KRAUS, J.
BACKGROUND
The underlying summary holdover proceeding was commenced by 92 ST. NICHOLAS AVENUE HDFC (Petitioner) against KIMBERLY RASHEED (Respondent) seeking to regain possession of 92 St. Nicholas Avenue, Apt. 2F, New York, New York, 10026 (Subject Premises) based on the allegation that Respondent is a month to month tenant, and that Petitioner has just cause to terminate the tenancy due to “economic necessity.”
PROCEDURAL HISTORY
Petitioner issued a thirty day notice of termination dated June 26, 2014, terminating Respondent's tenancy effective July 31, 2014. The notice provides in pertinent part:
The landlord is constrained to terminate your tenancy by economic necessity Due to Local Law 87, the landlord will have to invest over $500,000.00 to replace existing building systems, in order to reduce energy consumption. To obtain the finances required for the landlord the landlord's (sic) compliance with this law the landlord will have to sell certain cooperative units, especially those units which are unprofitable due, in part, delinquency in rental accounts. The landlord has, in the exercise of its business judgment, determined to sell this unit, and has further determined that apartments which are vacant are sold at higher prices than those which are tenanted.
The petition is dated August 1, 2014, and the proceeding was initially returnable on August 21, 2014. On that date, the proceeding was adjourned to October 2, 2014 for trial, pursuant to a stipulation. The stipulation provided that: Respondent and her two daughters, Kishawna Rasheed (KR) and Kionna Rasheed (Rasheed), were the sole occupants of the Subject Premises; KR appeared in the proceeding as an undertenant; both KR and Rasheed would be “added to the caption;” and Respondent acknowledged service and consented to the jurisdiction of the court. The stipulation was signed by Respondent, KR, and counsel for Petitioner, but was not so-ordered by the court. A postcard was sent by the court to Rasheed regarding the adjourn date.
The August 21, 2014 stipulation, was vacated by the court (Spears, J) on October 2, 2014, pursuant to a written order which: provided that Respondent and KR had appeared, but that Rasheed had not appeared; set a trial date for November 3, 2014; directed respondents to serve and file an answer and pay use and occupancy; and scheduled an inquest as to Rasheed on the adjourn date.
On October 15, 2014, Respondent filed an answer asserting breach of warranty of habitability and asserting a counterclaim for $1400 based on said breach.
On November 24, 2014, the proceeding was transferred to Part X for assignment to a trial part. The transfer order provided “Respondent's answer should be deemed a General Denial' & The verified answer asserts a counterclaim. Respondent tenders $1000 in court today without prejudice.”
On December 17, 2014, the proceeding was assigned to Part L for trial. The trial was adjourned to January 14, 2015, for Petitioner to present a rebuttal case. On January 14, 2015, Petitioner waived its rebuttal case, the court heard closing arguments and reserved decision.
FINDINGS OF FACT
Petitioner is the owner of the subject building, pursuant to a deed dated May 27, 1993, between the City of New York and Petitioner (Ex 1). The property was conveyed under HPD's Division of Alternative Management Programs (DAMP).
The deed provides that Petitioner agrees to operate the premises solely as a housing project for persons or families of low income, as defined in Section 576 of Article XI of the Private Housing Finance Law. The deed includes a covenant on the part of Petitioner not to sell or otherwise encumber the property for twenty-five years, without prior written approval from HPD. Annexed to the deed is Resolution No. 947 of the City Council which provides for a forty-year tax exemption on portion of real property taxes for the premises.
On the same date the deed was executed, a security agreement was also executed between the City and Petitioner. The court takes judicial notice of the contents of this agreement as maintained on ACRIS website (Document ID FT 1080000434208; Reel 1978, pg 2384–2396; copy has been printed out and added to the court file ). This agreement entitles the City to a portion of proceeds on the resale of units by shareholders, as well as the sale of unsold shares by Petitioner.
This agreement appears to have been superceded in part by a regulatory agreement between the parties dated April 2, 2014 (Ex 2). The newer agreement allows for retention of profits on resale, but contains other restrictions on renting, sales, primary residency and other aspects of ownership, which shall remain in force for thirty years from the date of the agreement.
There is a valid multiple dwelling registration on file with HPD (Ex 3).
Respondent is the tenant of record pursuant, to a written lease dated May 1, 1997, at a monthly rent of $650, for a term through and including April 30, 1998 (Ex 5). Respondent has lived in the Subject Premises for 17 years. She first moved in with her husband, but he moved out in 1998, and they divorced in 1999. Respondent now lives in the Subject Premises with her two daughters, and her grandchild.
Respondent's initial lease was not renewed in writing until August 1, 2012,. The renewal was for a term through and including July 31, 2013, at a monthly rent of $684.00. In between the first lease and the renewal, and after the expiration of the renewal, Respondent remained in occupancy as a month to month tenant. These are the only two written leases offered by Petitioner to Respondent.
From January 2013 forward, Respondent was charged $900 per month rent (Ex 7A), this amount increased to $950.00 per month, in August 2014 (Ex 7B). Respondent had arrears at the time of the trial, but the ledgers put into evidence show payments totaling $10,414.54 from January 2013 through October 2014. Respondent made additional payments after November 1, 2014, which are not reflected in the ledger. Additionally, Respondent's ability to seek rental assistance in this low income coop is hampered by Petitioner's refusal to issue Respondent any additional lease.
There are 55 or 56 units in the subject building, most are occupied by shareholders but there are 11 rental units. The Super also occupies one unit, and one unit is not rented but is used as community space.
Respondent acknowledged some problems paying the rent in recent years due to sporadic periods of unemployment, but asserts that she is now gainfully employed and able to meet ongoing rental obligations.
DISCUSSION
The court finds, and it is not contested, that Petitioner is sufficiently intertwined with government regulation to require that Petitioner establish just cause to evict Respondent ( 512 East 11th Street HDFC v. Grimmet 181 A.D.2d 488 ; 330 South Third Street, HDFC v. Bitar 28 Misc.3d 51 ). In Grimmet the court held that “... the tenant is entitled to notice of the alleged cause for eviction and procedural due process in the determination of whether cause exists (id at 489 ).”
There is no specific definition of good cause or standard outlined for when good cause has been met in this context. Good cause for eviction has been held satisfied where the tenant has failed to execute a good faith renewal offer [601 West 136 Street HDFC v. Olivares 2014 N.Y. Slip Op. 31474(U) ]. This court has previously held that where the HDFC shows a short term tenant has been delinquent in rent for most of her tenancy, good cause has been established [207–213 West 144th Street HDFC v. Jenkins 44 Misc.3d 1224(A) ]. Good cause has been established where the tenant used the premises for illegal activity [City of New York v. Johnson 32 Misc.3d 128(A) ], and where the occupant was not an original homesteader, shares had been issued to another intended occupant, and occupancy was in violation of the by-laws of the corporation [191 East 3rd Street HDFC v. Poon 2003 N.Y. Slip Op. 51073(U) ]. Good cause has been held established where there has been a chronic failure to pay rent, meet set requirements to execute a renewal lease, where the initial occupancy was not lawful and economic need was established by the HDFC [ 450–454 West 152nd Street HDFC v. Stembridge 38 Misc.3d 141(A) ].
In all of the cases where good cause has been found, there has been a failure on the part of the tenant to meet an expected obligation or wrongdoing on the part of the tenant. In the case at bar, Petitioner asserts good cause is established solely by economic necessity. While there was a casual reference in the predicate notice to consideration of delinquent accounts and some evidence at trial that Respondent had problems meeting her rental obligations, the predicate notice herein is based primarily on the economic necessity asserted by Petitioner.
Petitioner failed to establish economic necessity by a preponderance of credible evidence at the trial. Notably no financial documents pertaining Petitioner's assets and liabilities were offered into evidence, nor was there any documentation to back up the testimony of the witness regarding Petitioner's financial obligations.
The court also takes into consideration the long term nature of Respondent's tenancy. While Respondent's tenancy did commence after the coop conversion, Respondent has been a tenant since 1997, the better part of two decades. Respondent's tenancy commenced only a few years after the HDFC was established.
Petitioner asks this court to rely on the holding in Stembridge in arguing Petitioner has established good cause herein, but the court finds that Stembridge is distinguishable on the facts. In Stembridge, chronic failure to pay on was the focus of the predicate notice, and the tenant had admittedly remained in occupancy for years without making a single payment towards the rent. The landlord in Stembridge also established that the tenant had been offered an opportunity to sign a renewal lease, upon payment of back due use and occupancy and declined, and that the HDFC only resorted to a holdover, after a dismissal of a prior nonpayment proceeding by the court, who found no landlord tenant relation existed between the parties. Finally as noted above, in Stembridge the initial occupancy by the tenant was not based on a lease agreement with the HDFC and was not lawful.
The facts are not detailed in the Appellate Term decision, but are set forth in the trial court's decision, Index No. 74826/2011, Judge David Kaplan, December 20, 2011, Civil Court, New York County, Unreported).
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CONCLUSION
Based on the foregoing, the court finds that Petitioner failed to establish good cause to evict Respondent based on the record at trial and the proceeding is dismissed.
This constitutes the decision and order of this court.