Decided March 23, 2010.
Amsterdam Lewinter, LLP, Attorneys for Petitioner, By: LEE WAXMAN, ESQ, New York, New York.
Legal Services NYC — Bronx, Attorneys for Respondent, By: Maura Mchugh Mills, ESQ, Bronx, New York.
Carmen Gonzalez, Hector Gonzalez, Non Appearing Respondents, Bronx, New York.
This summary nonpayment proceeding was commenced by 835-37 TRINITY AVE. HDFC (Petitioner) and seeks to recover possession of Apartment 2B at 751 Jackson Avenue, Bronx, New York, 10456 (Subject Premises) based on allegations that RAYNARD ROYAL (Respondent) has failed to pay past due rent for the Subject Premises.
The petition in this proceeding is dated March 31, 2009 and seeks rent at a rate of $881.00 per month, for the period of September 2008 through February 2009. The petition asserts that Respondent is a rent-stabilized tenant, but makes no reference to any Section 8 subsidy or status. Respondent filed an answer on April 16, 2009, asserting a general denial and need for repairs. The proceeding was originally returnable on April 23, 2009, when the parties entered into a stipulation of settlement. The stipulation provided for entry of a final judgment against Respondent for $7048.00, and stayed execution of the warrant through May 22, 2009, for Respondent to pay the arrears, plus current rent. Petitioner agreed to repair the conditions listed. The stipulation provided, the settlement was without prejudice to an additional $40,290.51 which Petitioner alleged constituted arrears for a period prior to August 2008. The warrant of eviction issued on May 13, 2009.
On May 22, 2009, Respondent moved by order to show cause for an extension of time to pay the arrears, and for an order directing Petitioner to make the previously requested repairs. The motion was returnable June 5, 2009, and was adjourned to June 19, 2009 for Respondent to obtain counsel. On June 19, 2009, the motion was further adjourned to July 16, 2009, for Respondent to subpoena HPD Section 8, and for counsel to determine whether to appear on behalf of Respondent in this proceeding.
On July 16, 2009, the motion was further adjourned by court order to August 4, 2009, to give HPD an opportunity to produce additional documentation and information responsive to the subpoena. On August 4, 2009, the motion was adjourned to September 15, 2009 pursuant to a stipulation between the parties. The stipulation provided in pertinent part that the adjournment was ". . . for a hearing to determine if petitioner is entitled to a judgment for an amount in excess of respondent's HPD share of $174.00 prior to termination from HPD section 8 effective 10/1/04 for respondent's failure to recertify with HPD Section 8 when respondent has signed a subsequent renewal lease for the full contract rent." The stipulation acknowledged that HPD had complied with the subpoena, and that the information provided by HPD was that Respondent had been terminated in October 2004, for failure to recertify, and that the Respondent's share, as of that date was $174.00 per month.
The motion was adjourned to September 23, 2009, and again to October 20, 2009. On October 20, 2009, Respondent failed to appear, and the motion was denied on default. On November 5, 2009, Respondent moved to vacate his default. That motion was returnable November 24, 2009, and was adjourned to December 7, 2009, for counsel to appear for Respondent. On December 7, 2009, Legal Services NYC — Bronx appeared on behalf of Respondent, and the motion was adjourned to January 11, 2010, pursuant to a stipulation agreeing that Respondent would subpoena DSS and HPD Section 8, and that an APS referral would be made on Respondent's behalf.
On January 11, 2010, the Court made an APS referral for Respondent and adjourned the motion to February 11, 2010. APS subsequently rejected Respondent as a client, based on their finding that Respondent was not in need of services, and was being assisted in addressing this proceeding by his wife.
On February 11, 2010, the motion and supplemental papers were marked submitted to the Court and the Court reserved decision. However, the parties entered into a stipulation adjourning the proceeding to March 9, 2010 for all purposes, to facilitate the ongoing attempts of Respondent's counsel to have the Section 8 subsidy reinstated. On March 9, 2010, the proceeding was adjourned to April 7, 2010 for the court's decision. The court briefly heard additional oral argument on the pending motion, and counsel for Respondent indicated efforts to resolve all outstanding issued were ongoing. RESPONDENT'S MOTION
Respondent's motion seeks an order vacating the April 23, 2009 stipulation of settlement, and the judgment and warrant issued herein, and allowing Respondent to submit an amended answer to the petition. Respondent asserts the stipulation should be vacated because it includes arrears beyond Respondent's share of the rent, which is impermissible given Respondent's status as a rent-stabilized tenant. Petitioner counters that the renewal lease executed between the parties, after the termination of Respondent's Section 8 benefits, constitutes a new agreement, entitling Petitioner to sue for the full contract rent.
Respondent's share of the rent for the Subject Premises is $174.00 effective November 1, 2002. The contract rent was $881.00 per month, at that time, and HPD's share was $707.00 per month. On September 15, 2004, Respondent's subsidy was terminated effective October 1, 2004, based on his failure to complete the annual recertification. The parties executed a lease renewal on July 11, 2005, which purportedly increased Respondent's rent from $916.24 to $966.63, for the period of October 2005 through September 2007.
It is unclear from the record before the court, how the rent jumped from $881.00 to $916.24, nor does Petitioner assert any interim renewals. In fact although Petitioner, relies exclusively on the renewal signed in July 2005, to support its argument that a new agreement was entered between the parties, the petition herein, dated March 31, 2009, sues for the last HPD contract rent of $881.00, not the renewal rent of $966.63, and this proceeding was not commenced to sue for arrears under the July 2005 renewal, nor is that renewal referenced in any pleadings.
It is well settled that Petitioner's obligation to accept a Section 8 subsidy is a term and condition of a lease executed with a rent-stabilized tenant, and that any renewal lease must include that same term and condition ( Rosario v. Diagonla Realty LLC 8 NY3d 755 ). Cases subsequent to the Rosario decision have held that "(a)bsent a showing by landlord of a new agreement . . . a Section 8 tenant does not become liable for the Section 8 share of the rent as "rent" even after the termination of the subsidy ( Prospect Place HDFC v. Gaildon 6 Misc 3d 135[A][App Term 1st Dept, 2005] citing Rainbow Assocs v. Culkin 2003 NY Slip Op 50771[U]).
In a case on point, the Appellate Term, held that "landlord's acceptance of section 8 housing assistance payments was a term and condition of the expired lease, which under the Rent Stabilization Code, had to be continued in the renewal lease and landlord was not within its rights in deeming tenant to have renewed the lease and to have agreed to pay the full lease rent ( W L Associates, LLC v. Gurevich 16 Misc 3d 129[A], NY Slip Op 51289 [U]).
While in this case, Respondent actually signed a renewal lease, rather than it being deemed renewed by Petitioner, a renewal lease by its very definition under the Rent Stabilization Code can not constitute a new agreement, on different terms and conditions, but may only be renewed on the same terms and conditions as previously governed the parties' relationship ( 9 NYCRR 2522.5[g]; Rosario, supra at 761).
Petitioner's remedy, when faced with a termination of the subsidy based on Respondent's failure to recertify, was to commence a holdover proceeding based on Respondent's breach of a substantial obligation of the tenancy. Only after a legal termination of Respondent's rent stabilized tenancy, could the parties contemplate a "new agreement" which would make Respondent responsible for a new rent, or the entire rent without subsidy. In this case, Petitioner never terminated Respondent's tenancy, but simply sued for the full contract rent, under the last renewal lease executed pursuant to the HAP contract, without indicating in the pleadings that Respondent had a Section 8 subsidy, which had been terminated.
Based on the foregoing, the stipulation dated April 23, 2009 is vacated, as are the judgment and warrant issued pursuant to said stipulation. Respondent, who expressly declined to seek dismissal of this proceeding, but instead seeks permission to submit an amended answer, is granted that relief. Respondent shall have until April 7, 2010 to serve and file an amended answer. This proceeding is scheduled to appear on the Court's calendar on April 7, 2010 for all purposes.
This constitutes the decision and order of this Court.