LANDLORD’S FAILURE TO PROCURE TOWN RENTAL PERMIT IS NOT A DEFENSE TO THE LANDLORD’S ACTION TO COLLECT RENT.

The First Department determined the landlord’s failure to procure a rental permit in accordance with the Town Code did not provide the tenant, Fairfield, with a defense to the landlord’s action to collect rent:

 

… [P]laintiff does not dispute that it failed to comply with the provisions of the Town of Southampton Code that, as enacted in 2008, require an owner to obtain a $200 biennial rental permit before the rental period commences or within 30 days after receiving actual notice from the Town of the failure to comply (see §§ 270-5[A][1]; 270-8[A]; 270-13). However, under the circumstances, the Town Code does not provide a defense to plaintiff’s claims against the Fairchild defendants, because it “does not provide expressly that its violation will deprive the parties of their right to sue on the contract, and the denial of relief is wholly out of proportion to the requirements of public policy or appropriate individual punishment” … . While the Town Code addresses matters affecting public welfare, it does not expressly preclude [*2]an owner from bringing a lawsuit to collect rent, it imposes relatively minor sanctions to redress violations, and it allows the owner to cure a default after receiving actual notice of a violation (Town Code §§ 270-5; 270-13; 270-19). We conclude that the Fairchild defendants, having occupied the premises and raised a patently inadequate forgery defense, should not be permitted to rely on the provisions of the Town Code “as a sword for personal gain rather than a shield for the public good,” i.e., to avoid payment of rent due under the lease … or enforcement of the absolute and unconditional guaranty given by Fairchild to induce plaintiff to enter into the lease … . 1424 Millstone Rd., LLC v James B. Fairchild, LLC, 2016 NY Slip Op 01250, 1st Dept 2-18-16