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LEASE WAS NOT AN ATTEMPT TO THWART (NYC) RENT CONTROL AND WAS THEREFORE VALID AND ENFORCEABLE.

The First Department, in a full-fledged opinion by Justice Tom, determined the lease in question was not an attempt to thwart rent control and was therefore valid and enforceable. The lease related to three apartments which were leased at different times to the defendant-tenant, who combined them into a single unit. Two of the apartments were rent-controlled and one was rent-stabilized and it was unclear at the time the lease was drawn what law applied:

… [T]his case is clearly unique because unlike the many cases where we invalidated leases seeking to circumvent the rent laws, here the parties truly did not know the rent-regulated status of the combined apartments. It appears that there were two rent-controlled apartments that were combined with a rent-stabilized apartment sometime in 1977. Fundamentally, in the foregoing cases there was no uncertainty about the rent-regulated status of the apartments and no question that the parties knowingly attempted to circumvent the rent laws. In contrast, the parties in this matter were unsure about the status of the combined apartment. This confusion was well founded and even supported by the fact that the parties received conflicting determinations concerning the legal status of this apartment from Rent Administrators … regarding the apartment’s status. Furthermore, the lease contemplated the possibility that the apartment could not be treated as intended by the parties. Indeed, while the lease provided for the combined apartments to move from rent control to rent stabilization, the parties explicitly recognized that they might be “prohibited or precluded” from enforcing their intended procedure. This is quite different from those leases which purposely sought to skirt the law and had no regard for the rent regulation scheme whatsoever. In other words, this agreement contemplated not that both parties would evade regulatory coverage but that they would seek approval of their agreement … . Thus, this case is distinguishable from those involving leases which knowingly and purposely sought to evade the rent laws. Here, there was no intent by the parties to the lease agreement to circumvent the rent laws. 204 Columbia Hgts., LLC v Manheim, 2017 NY Slip Op 00425, 1st Dept 1-19-17

LANDLORD-TENANT (LEASE WAS NOT AN ATTEMPT TO THWART (NYC) RENT CONTROL AND WAS THEREFORE VALID AND ENFORCEABLE)/RENT CONTROL (NYC) (LEASE WAS NOT AN ATTEMPT TO THWART (NYC) RENT CONTROL AND WAS THEREFORE VALID AND ENFORCEABLE)/LEASES (LEASE WAS NOT AN ATTEMPT TO THWART (NYC) RENT CONTROL AND WAS THEREFORE VALID AND ENFORCEABLE)

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NYC RENT STABILIZATION RULES DO NOT APPLY TO A BUILDING CONVERTED FROM COMMERCIAL TO RESIDENTIAL USE AFTER 1974.

The Second Department, in a full-fledged opinion by Justice Dickerson, determined the exemption from (New York City) rent stabilization rules for housing units constructed after January 1, 1974, applied to defendant’s post-1974 conversion of a commercial building to residential units:

… [Supreme Court] found that the defendant had made a prima facie showing that the complex was exempt from rent stabilization by demonstrating that its renovations had converted the complex from commercial to residential use, and that it had paid for a majority of the conversion costs. The court further found that the plaintiffs had failed to raise a triable issue of fact as to whether the complex was subject to rent stabilization. In this regard, the court reasoned that the 75% requirement of Rent Stabilization Code § 2520.11 did not apply where a commercial building was converted to residential use. We affirm. * * *

The plaintiffs contend that … they raised a triable issue of fact as to whether the defendant failed to replace 75% of the systems … in accordance with section 2520.11(e)(1) of the Rent Stabilization Code… . We disagree. The most natural reading of the … 75% requirement is that it is applicable in situations where an owner purports to substantially rehabilitate an existing residential building, and not in situations where a commercial building is converted to residential use. Bartis v Harbor Tech, LLC, 2016 NY Slip Op 08831, 2nd Dept 12-28-16

 

LANDLORD-TENANT (NYC RENT STABILIZATION RULES DO NOT APPLY TO A BUILDING CONVERTED FROM COMMERCIAL TO RESIDENTIAL USE AFTER 1974)/MUNICIPAL LAW (NYC RENT STABILIZATION RULES DO NOT APPLY TO A BUILDING CONVERTED FROM COMMERCIAL TO RESIDENTIAL USE AFTER 1974)/RENT STABILIZATION (NYC RENT STABILIZATION RULES DO NOT APPLY TO A BUILDING CONVERTED FROM COMMERCIAL TO RESIDENTIAL USE AFTER 1974)

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DESPITE THE CITY CODE PROVISION CREATING A NONDELEGABLE DUTY ON THE OWNER’S PART TO MAINTAIN AN ABUTTING SIDEWALK, THE TERMS OF THE LEASE RAISED A QUESTION OF FACT ABOUT THE TENANT’S LIABILITY [LIABILITY TO THIRD PARTIES ARISING FROM CONTRACT].

The Second Department determined plaintiffs raised a question of fact when the terms of the lease created a duty on the part of the tenant (the City here) to maintain the abutting sidewalk:

Administrative Code of the City of New York § 7-210 imposes a nondelegable duty on a property owner to maintain and repair the sidewalk abutting its property, and specifically imposes liability upon certain property owners for injuries resulting from a violation of the code provision (see Administrative Code § 7-210…).

As a general rule, the provisions of a lease obligating a tenant to repair the sidewalk do not impose on the tenant a duty to a third party … . This is in accordance with the principle that “a contractual obligation, standing alone, will generally not give rise to tort liability in favor of a third party” … . However, the Court of Appeals has recognized that there are exceptions to this general rule and that there are situations in which a party who enters into a contract may be said to have assumed a duty of care to third parties

The lease, inter alia, required the City, at its sole cost and expense, to take good care of the sidewalk, and “make all repairs thereto, ordinary and extraordinary, foreseen and unforeseen.” It also provided that the former owner “shall have no responsibility and shall not be required to furnish any services, make any repairs or to perform any other maintenance work.” The plaintiffs’ submission of this evidence raised a triable issue of fact as to whether the City’s lease was comprehensive and exclusive as to sidewalk maintenance so as to entirely displace the former landowner’s duty to maintain the sidewalk … . Hsu v City of New York, 2016 NY Slip Op 08348, 2nd Dept 12-14-16

NEGLIGENCE (DESPITE THE CITY CODE PROVISION CREATING A NONDELEGABLE DUTY ON THE OWNER’S PART TO MAINTAIN AN ABUTTING SIDEWALK, THE TERMS OF THE LEASE RAISED A QUESTION OF FACT ABOUT THE TENANT’S LIABILITY [LIABILITY TO THIRD PARTIES ARISING FROM CONTRACT])/CONTRACT LAW (TORT LIABILITY TO THIRD PARTIES, DESPITE THE CITY CODE PROVISION CREATING A NONDELEGABLE DUTY ON THE OWNER’S PART TO MAINTAIN AN ABUTTING SIDEWALK, THE TERMS OF THE LEASE RAISED A QUESTION OF FACT ABOUT THE TENANT’S LIABILITY)/LANDLORD-TENANT (SLIP AND FALL, DESPITE THE CITY CODE PROVISION CREATING A NONDELEGABLE DUTY ON THE OWNER’S PART TO MAINTAIN AN ABUTTING SIDEWALK, THE TERMS OF THE LEASE RAISED A QUESTION OF FACT ABOUT THE TENANT’S LIABILITY [LIABILITY TO THIRD PARTIES ARISING FROM CONTRACT])/SLIP AND FALL (DESPITE THE CITY CODE PROVISION CREATING A NONDELEGABLE DUTY ON THE OWNER’S PART TO MAINTAIN AN ABUTTING SIDEWALK, THE TERMS OF THE LEASE RAISED A QUESTION OF FACT ABOUT THE TENANT’S LIABILITY [LIABILITY TO THIRD PARTIES ARISING FROM CONTRACT])/SIDEWALKS (DESPITE THE CITY CODE PROVISION CREATING A NONDELEGABLE DUTY ON THE OWNER’S PART TO MAINTAIN AN ABUTTING SIDEWALK, THE TERMS OF THE LEASE RAISED A QUESTION OF FACT ABOUT THE TENANT’S LIABILITY [LIABILITY TO THIRD PARTIES ARISING FROM CONTRACT])

FAILURE TO RETURN KEYS DID NOT CONSTITUTE A FAILURE TO SURRENDER THE APARTMENT, TENANT ENTITLED TO RETURN OF SECURITY DEPOSIT.

The Second Department, reversing Supreme Court, determined the tenant was entitled to the return of the security deposit. The fact that the tenant did not return the keys did not show a failure to surrender the apartment:

The tenant established his prima facie entitlement to judgment as a matter of law on the cause of action alleging breach of the lease for failing to return the security deposit (see General Obligations Law § 7-103). The evidence established that the tenant paid the landlord a security deposit and vacated the apartment a few days before the lease terminated. In opposition, the landlord failed to raise a triable issue of fact. Contrary to the landlord’s contention, the tenant’s failure to return the keys prior to the expiration of the lease did not show a failure to surrender … . Furthermore, there was no provision in the lease requiring the tenant to notify the landlord that he was vacating the apartment. In fact, the “Tenant Cooperation Rider” stated that such notice was not required. Moreover, the landlord failed to submit evidentiary proof that the tenant damaged the apartment. Pezzo v 26 Seventh Ave. S., LLC, 2016 NY Slip Op 07310, 2nd Dept 11-9-16

LANDLORD-TENANT (FAILURE TO RETURN KEYS DID NOT CONSTITUTE A FAILURE TO SURRENDER THE APARTMENT, TENANT ENTITLED TO RETURN OF SECURITY DEPOSIT)/KEYS (LANDLORD-TENANT, FAILURE TO RETURN KEYS DID NOT CONSTITUTE A FAILURE TO SURRENDER THE APARTMENT, TENANT ENTITLED TO RETURN OF SECURITY DEPOSIT)/SECURITY DEPOSIT (LANDLORD-TENANT, FAILURE TO RETURN KEYS DID NOT CONSTITUTE A FAILURE TO SURRENDER THE APARTMENT, TENANT ENTITLED TO RETURN OF SECURITY DEPOSIT)

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QUESTION OF FACT WHETHER LANDLORD LIABLE FOR BITE BY TENANT’S DOG.

The Second Department determined Supreme Court properly denied the landlord’s (appellant’s) motion for summary judgment in this dog bite case. The plaintiff was bitten by a tenant’s dog. The court explained the relevant law:

… [To] “recover against a landlord for injuries caused by a tenant’s dog on a theory of strict liability, the plaintiff must demonstrate that the landlord: (1) had notice that a dog was being harbored on the premises; (2) knew or should have known that the dog had vicious propensities, and (3) had sufficient control of the premises to allow the landlord to remove or confine the dog'” … .

… [T]he appellant established his prima facie entitlement to judgment as a matter of law dismissing the third cause of action insofar as asserted against him … . In support of his motion, he submitted, inter alia, his deposition transcript and the deposition transcripts of the injured plaintiff and [the tenant]. This evidence demonstrated, prima facie, that the appellant was not aware, nor should have been aware, that the dog had any vicious propensities … . In opposition, however, the plaintiffs raised triable issues of fact as to whether the dog did indeed have vicious propensities and whether the appellant knew or should have known of them … . Kim v Hong, 2016 NY Slip Op 06698, 2nd Dept 10-12-16

ANIMAL LAW (QUESTION OF FACT WHETHER LANDLORD LIABLE FOR BITE BY TENANT’S DOG)/LANDLORD-TENANT (DOG BITE, QUESTION OF FACT WHETHER LANDLORD LIABLE FOR BITE BY TENANT’S DOG)/DOG BITE (QUESTION OF FACT WHETHER LANDLORD LIABLE FOR BITE BY TENANT’S DOG)

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CLOSURE OF TERRACE BREACHED THE IMPLIED WARRANTY OF HABITABILITY.

The Second Department, reversing (modifying) Supreme Court, determined plaintiff had made out a prima facie case for damages stemming from the defendant's breach of the implied warranty of habitability. Plaintiff held a proprietary lease in a cooperative. A storm damaged the terrace adjacent to the apartment. Plaintiff was entitled to damages for the period of time the terrace was closed:

The implied warranty of habitability, codified in the Real Property Law, provides that in every written lease for residential purposes, the landlord or lessor “shall be deemed to covenant and warrant that the premises so leased or rented and all areas used in connection therewith in common with other tenants or residents are fit for human habitation and for the uses reasonably intended by the parties and that the occupants of such premises shall not be subjected to any conditions which would be dangerous, hazardous or detrimental to their life, health or safety” (Real Property Law § 235-b[1]). In Solow v Wellner (86 NY2d 582, 587-588), the Court of Appeals clarified that Real Property Law § 235-b(1) includes three separate covenants: “(1) that the premises are fit for human habitation, (2) that the premises are fit for the uses reasonably intended by the parties, and (3) that the occupants will not be subjected to conditions that are dangerous, hazardous or detrimental to their life, health or safety” (id. at 587-588 [internal quotation marks omitted]). “A breach of warranty may be said to have occurred where the premises have not met the reasonable expectations of the parties” (7-82 Warren's Weed New York Real Property § 82.22 [2016]). Here, the plaintiff established that the water damage and subsequent closures of the terrace rendered it unfit for the uses reasonably intended by the parties … . Goldhirsch v St. George Tower & Grill Owners Corp., 2016 NY Slip Op 06060, 2nd Dept 9-21-16

LANDLORD-TENANT (CLOSURE OF TERRACE BREACHED THE IMPLIED WARRANTY OF HABITABILITY)/REAL PROPERTY LAW (CLOSURE OF TERRACE BREACHED THE IMPLIED WARRANTY OF HABITABILITY)/APARTMENTS (CLOSURE OF TERRACE BREACHED THE IMPLIED WARRANTY OF HABITABILITY)/TERRACES (APARTMENTS, CLOSURE OF TERRACE BREACHED THE IMPLIED WARRANTY OF HABITABILITY)/HABITABIILITY, IMPLIED WARRANTY OF (CLOSURE OF TERRACE BREACHED THE IMPLIED WARRANTY OF HABITABILITY)

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LANDLORD DID NOT HAVE A DUTY TO DISCLOSE LOCAL LAWS RESTRICTING THE USE OF THE PROPERTY.

The Second Department determined the terms of the lease negated the claimed violation of an implied covenant of good faith and fair dealing. The plaintiffs leased defendants’ property to operate a car dealership. After learning that a local law prohibited parking cars without license plates on the property, the plaintiffs asked to be released from the lease. The landlord refused. The terms of the lease specifically stated (1) it was subject to any local law restrictions and (2) it made no representations the property was suitable to plaintiffs’ intended business:

The implied covenant of good faith and fair dealing is breached when a party acts in a manner that would deprive the other party of the right to receive the benefits of their agreement … . The implied covenant includes any promises which a reasonable promisee would be justified in understanding were included … . However, no obligation may be implied that would be inconsistent with other terms of the contractual relationship … . Here, a finding that the defendants breached the covenant of good faith and fair dealing would necessarily contradict explicit and unambiguous terms of the lease agreements and create additional obligations not contained in them. Specifically, the lease agreements, which the defendants submitted in support of their motion, provided that the written agreements superseded all “representations and understandings, written, oral or otherwise, between or among the parties with respect to the matters contained herein.” Additionally, the specific provisions in the lease agreements relating to parking were made subject to “any restrictions of local law, zoning or ordinance.” Finally, the lease agreements specifically provided that the landlord made no representation concerning the suitability of the premises for the plaintiffs’ intended business. Imposing a duty on the landlord to disclose zoning or local law restrictions would render those provisions ineffective … . These express and specific provisions in the lease itself conclusively establish a defense to causes of action alleging breach of the implied covenant of good faith and fair dealing … . 1357 Tarrytown Rd. Auto, LLC v Granite Props., LLC, 2016 NY Slip Op 05981, 2nd Dept 9-14-16

LANDLORD-TENANT (LANDLORD DOES NOT HAVE A DUTY TO DISCLOSE LOCAL LAWS RESTRICTING THE USE OF THE PROPERTY)/CONTRACT (LEASES, LANDLORD DOES NOT HAVE A DUTY TO DISCLOSE LOCAL LAWS RESTRICTING THE USE OF THE PROPERTY)/COVENANT OF GOOD FAITH AND FAIR DEALING (LEASES, LANDLORD DOES NOT HAVE A DUTY TO DISCLOSE LOCAL LAWS RESTRICTING THE USE OF THE PROPERTY)

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LANDLORD’S RIGHT TO ENTER TO MAKE REPAIRS DOES NOT CREATE A DUTY TO MAKE REPAIRS.

In finding the out-of-possession landlord was entitled to summary judgment in this slip and fall case, the Second Department noted that the landlord’s reservation of a right to enter the property to inspect and make repairs does not impose a duty to make repairs. The plaintiff alleged she slipped on ice in the workplace parking lot:

Here, the plaintiff alleged that the defendant breached a common-law duty to keep the premises in a reasonably safe condition. The defendant established its prima facie entitlement to judgment as a matter of law by submitting proof that it was an out-of-possession landlord and, thus, had no duty to perform repairs or remove snow and ice from the premises … . In opposition, the plaintiff failed to raise a triable issue of fact as to whether the defendant had a duty to remove snow or ice under statute or regulation, the terms of the lease, or a course of conduct … . A landlord’s reservation of the right to enter property to inspect and make repairs does not in itself give rise to a duty to make repairs … . Keum Ok Han v Kemp, Pin & Ski, LLC, 2016 NY Slip Op 05908, 2nd Dept 8-31-16

NEGLIGENCE (SLIP AND FALL, LANDLORD’S RIGHT TO ENTER TO MAKE REPAIRS DOES NOT CREATE A DUTY TO MAKE REPAIRS)/LANDLORD-TENANT (SLIP AND FALL, LANDLORD’S RIGHT TO ENTER TO MAKE REPAIRS DOES NOT CREATE A DUTY TO MAKE REPAIRS)/SLIP AND FALL (LANDLORD’S RIGHT TO ENTER TO MAKE REPAIRS DOES NOT CREATE A DUTY TO MAKE REPAIRS)

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LESSEE AND CITY NOT LIABLE FOR HOLE IN SIDEWALK; DEFECT WAS NOT IN THE CURB CUT OR PEDESTRIAN RAMP FOR WHICH THE ABUTTING PROPERTY OWNER WOULD NOT BE RESPONSIBLE.

The Second Department determined the lessee of property abutting a sidewalk and the city (NYC) were entitled to summary judgment in this slip and fall case. The city argued it did not have prior written notice of the hole in the sidewalk. The lessee, El Fuerte, argued it did not create the dangerous condition, did not violate any statute or ordinance, and the lease imposed no duty to repair the sidewalk. With regard to the liability of the abutting property owner, the court noted that, although a curb cut and pedestrian ramp leading from a sidewalk to the street are not the responsibility of the abutting property owner, the defect here was not in the curb cut or ramp:

… [A] lessee of property which abuts a public sidewalk owes no duty to maintain the sidewalk in a safe condition, and liability may not be imposed upon it for injuries sustained as a result of a dangerous condition in the sidewalk, except where the abutting lessee either created the condition, voluntarily but negligently made repairs, caused the condition to occur because of some special use, or violated a statute or ordinance placing upon the lessee the obligation to maintain the sidewalk which imposes liability upon the lessee for injuries caused by a violation of that duty … . * * * … [A] provision of a lease which obligates a tenant to repair a sidewalk does not impose on the tenant a duty to a third party, such as the plaintiff. Martin v Rizzatti, 2016 NY Slip Op 05797, 2nd Dept 8-17-16

NEGLIGENCE (LESSEE AND CITY NOT LIABLE FOR HOLE IN SIDEWALK; DEFECT WAS NOT IN THE CURB CUT OR PEDESTRIAN RAMP FOR WHICH THE ABUTTING PROPERTY OWNER WOULD NOT BE RESPONSIBLE)/MUNICIPAL LAW (SIDEWALK SLIP AND FALL, LESSEE AND CITY NOT LIABLE FOR HOLE IN SIDEWALK; DEFECT WAS NOT IN THE CURB CUT OR PEDESTRIAN RAMP FOR WHICH THE ABUTTING PROPERTY OWNER WOULD NOT BE RESPONSIBLE)/LANDLORD-TENANT (LESSEE AND CITY NOT LIABLE FOR HOLE IN SIDEWALK; DEFECT WAS NOT IN THE CURB CUT OR PEDESTRIAN RAMP FOR WHICH THE ABUTTING PROPERTY OWNER WOULD NOT BE RESPONSIBLE)/SIDEWALKS (LESSEE AND CITY NOT LIABLE FOR HOLE IN SIDEWALK; DEFECT WAS NOT IN THE CURB CUT OR PEDESTRIAN RAMP FOR WHICH THE ABUTTING PROPERTY OWNER WOULD NOT BE RESPONSIBLE)/SLIP AND FALL (LESSEE AND CITY NOT LIABLE FOR HOLE IN SIDEWALK; DEFECT WAS NOT IN THE CURB CUT OR PEDESTRIAN RAMP FOR WHICH THE ABUTTING PROPERTY OWNER WOULD NOT BE RESPONSIBLE)

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LEASE TERMS ALLOWED JURY TO BE INSTRUCTED ON TENANT’S POTENTIAL LIABILITY FOR A SIDEWALK SLIP AND FALL.

The Second Department determined the jury was properly instructed to consider a tenant’s liability for a sidewalk slip and fall based upon the terms of the lease:

… [T]he Supreme Court properly submitted the issue of the tenant’s negligence to the jury. “Administrative Code of the City of New York § 7-210 imposes a nondelegable duty on a property owner to maintain and repair the sidewalk abutting its property” … . Generally, the “provisions of a lease obligating a tenant to repair the sidewalk do not impose on the tenant a duty to a third party, such as the plaintiff” … . However, where a lease agreement is “so comprehensive and exclusive as to sidewalk maintenance as to entirely displace the landowner’s duty to maintain the sidewalk,” the tenant may be liable to a third party … . Here, the owner demonstrated that a rider to the subject lease requiring the tenant to, at its own cost and expense, keep and maintain the sidewalk “in thorough repair and good order,” was so comprehensive and exclusive as to entirely displace the owner’s duty to maintain the sidewalk … . Paperman v 2281 86th St. Corp., 2016 NY Slip Op 05747, 2nd Dept 8-10-16

NEGLIGENCE (SLIP AND FALL, LANDLORD-TENANT, LEASE TERMS ALLOWED JURY TO BE INSTRUCTED ON TENANT’S POTENTIAL LIABILITY FOR A SIDEWALK SLIP AND FALL)/LANDLORD-TENANT (NEGLIGENCE, SLIP AND FALL, LEASE TERMS ALLOWED JURY TO BE INSTRUCTED ON TENANT’S POTENTIAL LIABILITY FOR A SIDEWALK SLIP AND FALL)/SLIP AND FALL (LANDLORD-TENANT, LEASE TERMS ALLOWED JURY TO BE INSTRUCTED ON TENANT’S POTENTIAL LIABILITY FOR A SIDEWALK SLIP AND FALL)/SIDEWALKS (SLIP AND FALL, LANDLORD-TENANT, LEASE TERMS ALLOWED JURY TO BE INSTRUCTED ON TENANT’S POTENTIAL LIABILITY FOR A SIDEWALK SLIP AND FALL)

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