WHEN ARE CHRONIC LATE PAYMENTS A SUBSTANTIAL DEFAULT

A rent regulated apartment in New York is a valuable asset mainly because of the rights of renewal and limits on rent increases. But this asset can be lost due to constant late payments.

Lincoln 64 Flats LLC v. Stranahan,  Date filed: 2019-02-25 Court: Civil Court, Kings, Judge: Judge Marc Finkelstein, Case Number: 71779/18:

"The standard to sustain a chronic late payment eviction proceeding is as follows:

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 (see, Sharp v. Norwood, 89 NY2d 1068; 9 NYCRR 2524, 3 [a]).

Adam’s Tower, Ltd. Partnership v. Richter, 186 Misc 2d 620 (App Term, 1st Dept).

In order to prevail in a chronic nonpayment of rent case commenced as a violation of a substantial obligation of the tenancy, petitioner must prove that “it was required to commence frequent nonpayment proceedings in a relatively short period of time.” 601 West Realty LLC v. Chapa, 2003 NY Slip Op 51253(U) (Civ Ct, NY County). See e.g., Adam’s Tower, supra (nine nonpayment proceedings in three years); Pamela Equities Corp. v. Coverton, NYLJ, July 18, 1990, p 18, col 1 (App Term, 1st Dept) [seven nonpayment proceedings in two years]; Chelsea 19 Assoc v. Minetti, NYLJ, October 27, 1986, p 13, col 6 (App Term, 1st Dept) [five nonpayment proceedings in two years]; 2564 Co. v. D’Addario, 35 Misc 2d 176 (App Term, 1st Dept 1961) [eleven nonpayment proceedings in one and a half years]; 25th Realty Associates v. Griggs, 150 AD2d 155 (1st Dept 1989) [eleven nonpayment proceedings in six years]. See also, PWV Acquisition, LLC v. Maddox, 2005 NY Slip Op 50955(U) (App Term, 1st Dept).

However, when evaluating whether a landlord has established a prima facie case of unjustified rent defaults on the part of the tenant, those nonpayment proceedings that were “not pursued” should not be “charged against” the tenant. 31-67 Astoria Corp v. Cabezas, 2017 N.Y. Misc. LEXIS 1160, 2017 NY Slip OP 50432(U) (App Term, 2d Dept 2017). See also, Chama Holding Corp v. Taylor, 2012 N.Y. Misc. LEXIS 4347, 2012 NY Slip OP 22255 (App Term, 1st Dept 2012). Here, the case summary sheet for Index No. 85101/15, annexed as Exhibit I, clearly indicates that this proceeding was not pursued by the landlord. The petition was filed on August 24, 2015 and nothing at all occurred in the case until July 13, 2018 when it was administratively dismissed. Therefore the 2015 proceeding is not charged against respondent. As to the remaining two 2017 proceedings respondent argues they should not be charged against respondent because although petitioner admittedly obtained a default possessory judgment and a warrant of eviction in both cases, petitioner did not pursue the cases thereafter. This argument is not correct. The court finds that a landlord not taking action to further proceed to eviction after obtaining a default judgment and warrant of eviction is not what 31-67 Astoria Corp and Chama Holding Corp mean in holding that a case not pursued by a landlord is not to be charged against the tenant. As opposed to the 2015 proceeding, petitioner did pursue the 2017 proceedings to the point of judgment and warrant.

However, what is left are only two nonpayment proceedings to support petitioner’s claim of chronic rent delinquency. The court finds that under the standard set forth in Adam’s Tower. Ltd. Partnership v. Richter, supra, only two nonpayment proceedings during respondent’s nine year tenancy do not constitute “a history of repeated nonpayment proceedings brought to collect chronically late rental payments so as to support an eviction proceeding on the ground that the tenant has violated a substantial obligation of the tenancy.” Other decisions holding that the commencement of two remaining nonpayment proceedings fails to establish a pattern of unjustified rent defaults on the tenant’s part to constitute a violation of a substantial obligation of the tenancy include: Chama holding Corp v. Taylor, supra; Hudson St. Equities v. Circhi, 2005 N.Y. Misc. LEXIS 2410, 2005 NY Slip Op 51764(U) (App Term, 1t Dept 2005); Eva Stern 500 Llc v. Streat, 2018 NYLJ LEXIS 2765 (Civ Ct, Kings County); 3424 Dekalb Assocs v. Pabon, 2019 NYLJ LEXIS 383 (Civ Ct, Bronx County)."