NON-PAYMENT SUMMARY PROCEEDING AND MONTH TO MONTH TENANTS

109th Affordable Housing L.L.C. v. Beck, Date filed: 2024-01-31, Court: Civil Court, New York, Judge: Judge Karen May Bacdayan, Case Number: LT-312349-23/NY:

"Can a Nonpayment Proceeding Commenced Pursuant to RPAPL 711 (2) Be Maintained Against a Month-to-Month Tenant as Defined by Real Property Law §232-c?

As this court has previously held, the law in the First Judicial Department is clear that for a landlord to commence a summary eviction proceeding pursuant to RPAPL 711 (2), it must be based upon an agreement to pay rent.

The RPAPL provides that a nonpayment proceeding may be maintained against a tenant when:

“The tenant has defaulted in the payment of rent, pursuant to the agreement under which the premises are held, and a written demand of the rent has been made with at least fourteen days’ notice requiring, in the alternative, the payment of the rent, or the possession of the premises, has been served upon [them] as prescribed in section seven hundred thirty-five of this article (emphasis added).” (RPAPL 711 (2).)

RPL §232-c states:

“Where a tenant whose term is longer than one month holds over after the expiration of such term, such holding over shall not give to the landlord the option to hold the tenant for a new term solely by virtue of the tenant’s holding over. In the case of such a holding over by the tenant, the landlord may proceed, in any manner permitted by law, to remove the tenant, or, if the landlord shall accept rent for any period subsequent to the expiration of such term, then, unless an agreement either express or implied is made providing otherwise, the tenancy created by the acceptance of such rent shall be a tenancy from month to month commencing on the first day after the expiration of such term.”

In 1969, 10 years after RPL §232-c was enacted. Jaroslow v. Lehigh Valley R. Co., 23 NY2d 991 (1969) parsed the meaning of the statute. Notwithstanding that Jaroslow did not involve a summary eviction proceeding commenced pursuant to RPAPL 711 (2), Jaroslow provides guidance and comports with more recent First Department caselaw. In Jaroslow, the Court of Appeals held that if no rent is accepted after the end of the lease term, then no month-to-month tenancy is created. The Jaroslow court held that “[an] action for nonpayment of rent, based on a notice purporting to fix a rent, never agreed upon by tenant and never paid by tenant, does not lie, there being no tenancy in fact or at law obligating the tenant for such rent.” (Jaroslow, 23 NY2d at 993.) In other words, rent must be tendered by the tenant and accepted by the landlord after the expiration of a lease term in order to create a month-to-month tenancy.

In 120 Bay St. Realty Corp. v. City of New York, 44 NY2d 907 (1978), the plaintiff’s lease term had expired without the City’s formal exercise of the lease renewal option, although the plaintiff continued in possession pursuant to a holdover provision in the lease. (See 120 Bay St. Realty Corp., 59 AD2d 527, 528-529 [2d Dept 1977. Shapiro, J., dissenting], revd 44 NY2d 907 [1978].) The Court of Appeals made a clear distinction between an extension of a lease term and an extension of a tenancy as a month-to-month tenant, observing that “defendant occupies the subject premises as a month-to-month tenant rather than as a tenant under a valid and existing lease (emphasis added).” (120 Bay St. Realty Corp., 44 NY2d at 909.)

Subsequent Appellate Division. First Department case law, discussed infra, is consistent with Jaroslow and 120 Bay Street Realty Corp. and advises that while a month-to-month tenancy is created by the acceptance of rent in any given month, a month-to-month tenancy is just that; a tenancy from month to month. Put another way, a tenancy created by the payment of rent for the month in which rent is paid expires at the end of that month and can only be renewed by the payment of rent the next month.

Forty-two years after Jaroslow was decided, the Appellate Division, First Department held in Bleecker St. Tenants Corp. v. Bleeker Jones LLC, 65 AD3d 240, 245-246 (1st Dept 2009), revd on other grounds, 16 NY3d 272 (2011), that it is improper to maintain a nonpayment proceeding against an unregulated month-to-month tenant for rent not paid after the end of any given month, because “each month is a new term for a new period, each a separate and new contract (emphasis added, internal citations omitted).” In other words, when a month-to-month tenancy is created by the acceptance of rent at the end of a lease for a fixed term, see Jaroslow and 120 Bay St. Realty Corp., that month-to-month tenancy expires at the end of the month. A new agreement is created only by paying rent on or about the first of the next month, and, if no rent is paid, there is no longer a valid contract under which to sue for rent.3 Practically speaking, it follows that a landlord whose tenant becomes a month-to-month tenant and then ceases to pay rent is relegated to a summary holdover proceeding based on the expiration of a term for a definite time.

In N. Shore Community Servs., Inc. v. Community Dr. LLC, 120 AD3d 1142 (1st Dept 2014), the court found that the language in the lease negated the formation of a month-to-month tenancy and was an example of what the legislature meant by the phrase “unless an agreement either express or implied is made providing otherwise.” (RPL 232-c.) The court held that the lease which comprised certain language was “such an agreement.” (N. Shore Community Servs., Inc, 120 AD3d at 1143.) The lease specifically negated recognition of a month-to-month tenancy at lease expiration and provided that “upon plaintiff’s default of its obligation to surrender the premises at the end of the lease term, plaintiff’s continued occupation of the premises, with or without defendant’s consent or acquiescence, will be treated as a tenancy at will and ‘in no event’ a tenancy from month to month.” (Id.) Thus, plaintiff’s argument that a month-to-month tenancy was created by the tender and acceptance of rent was refuted by the express language in the lease. Here, there is no such language apparent in respondent’s expired lease. (NYSCEF Doc No. 15, respondent’s exhibit B, respondent’s expired lease.)4

More apropos authority can be found in Appellate Term, First Department decisions which, unlike the Court of Appeals and Appellate Division, First Department decisions discussed supra, involve RPAPL 711 (2) and the requirement that a nonpayment proceeding may be maintained against a tenant pursuant to the agreement under which the premises are held.

Most recently in 6 W. 20th St. Tenants Corp. v. Dezertzov, 75 Misc 3d 135 (A), 2022 NY Slip Op 50529 (U) (App Term, 1st Dept 2022), cited by respondent, the court held, “[a]though the petition alleged the existence of a written lease between the parties, petitioner admitted at trial that it was not in possession of any proprietary lease, share certificate, transfer agreement or other direct evidence of any lease agreement with respondents[.]” (6 W. 20th St. Tenants Corp., 2022 NY Slip Op 50529 [U]. *2.) The decision contains no analysis of month-to-month tenancies as, apparent from the trial court decision, the issue never arose. Petitioner attempted at trial to prove a lease agreement through circumstantial evidence which the trial court found to be “inconsistent” and “unreliable.” (6 W. 20th St. Tenants Corp. v. Dezertzov, 71 Misc 3d 1226 [A], *10 [Civ Ct, New York County 2021].) In dismissing the proceeding, commenced pursuant to RPAPL 711 (2), for petitioner’s failure to prove its prima facie case, the trial court cited to Stern v. Equitable Trust Co. of NY, 238 NY 267, 269 (1924), for the proposition that “[t]he relation of landlord and tenant is always created by contract, express or implied, and will not be implied where the acts and conduct of the parties negative its existence (internal citation and quotation marks omitted).” (Id., *2.) The trial court noted that “[p]ursuant to RPAPL 711 (2), a nonpayment proceeding must be based on a default in the payment of rent pursuant to an agreement under which the premises are held (internal quotation marks omitted).” (Id.) In affirming the decision, the Appellate Term also held that “[a] nonpayment proceeding may only be maintained to collect rent owed pursuant to an agreement between the parties, express or implied,” citing to West 152nd Assoc., L.P. v. Gassama, 65 Misc 3d 155 (A), 2019 NY Slip Op 51926 (U) (App Term. 1st Dept 2019) (6 W. 20th St. Tenants Corp., 2022 NY Slip Op 50529 [U], *1-2.) In Gassama, the Appellate Term noted at *1,

“The Court also properly rejected landlord’s claim that tenant became a month-to-month tenant after the expiration of the November 2014 license agreement, since that document expressly indicated that the rights of the Licensee shall not be deemed to be or construed as a month-to-month tenancy…. Moreover, even assuming that a month-to-month tenancy was created following expiration of the license agreement, there was no agreed rental amount for any month ensuing after tenant ceased paying rent (internal quotation marks omitted. emphasis added).”

In Krantz & Phillips, LLP v. Sedaghati, 2003 NY Slip Op 50032 (U) (App Term, 1st Dept 2003), a proceeding commenced pursuant to RPAPL 711 (2), the Appellate Term, First Department affirmed dismissal of a nonpayment petition which sought rent for January 2022 and February 2022, but was premised upon a lease that expired October 31, 2021. The court held that “[e]ven assuming that a month-to-month tenancy was created following expiration of the lease, there was no agreed upon rental for any month ensuing after tenant ceased paying rent and no basis for holding tenant contractually liable for the rent reserved in the expired lease (internal citation omitted).” (Sedaghati, 2003 NY Slip Op 50032 [U], *1.) Citing to Jaroslow, the court noted the landlord was consigned to commencing a holdover proceeding in which it could seek use and occupancy. (Id.)"