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THE RESTRICTIVE COVENANT LIMITED THE USE OF THE PROPERTY TO ONLY “SINGLE-FAMILY RESIDENTIAL PURPOSES;” USE OF THE PROPERTY FOR SHORT-TERM RENTALS THROUGH AIRBNB VIOLATES THE RESTRICTIVE COVENANT (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice Powers, determined that a restrictive covenant from a common grantor restricting the use of the property to only “single-family residential purposes” prohibited plaintiff from using the property for short-term rentals through Airbnb. Such use is not “residential:”

… [T]he restrictive covenant limits the permissible use to only “single[-]family residential purposes.” This phrase unambiguously directs that all properties within the subdivision must be used for only residential purposes, and, thus, any and all rentals must be to those who would utilize the property for residential purposes — i.e., as a residence. A residence is the location where an individual “actually lives” and is established by “[t]he act or fact of living in a given place for some time” (Black’s Law Dictionary [11th ed 2019], residence). Although there is no express durational requirement, a stay in a short-term rental property does not meet this definition … . Lodgers in short-term rental properties do not live on the premises but are instead on a short trip and often maintain a residence elsewhere where they “actually live[ ]” (Black’s Law Dictionary [11th ed 2019], residence). This is true even though lodgers may have access to the entirety of the property and may use it in the same manner as a resident, including by cooking meals and sleeping as plaintiff highlighted. West Mtn. Assets LLC v Dobkowski, 2024 NY Slip Op 02355, Third Dept 5-2-24

Practice Point: Here the restrictive covenant limited the use of the property to “residential” use. A “residence” is where someone actually lives, not where someone stays for a short time while on a trip. Therefore the restrictive covenant precluded short-term rentals of the property through Airbnb.

 

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THE COMPLAINT SUFFICIENTLY ALLEGED BOTH BREACH OF CONTRACT AND ANTICIPATORY REPUDIATION OF THE CONTRACT (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Wilson, in a factually-complex case which cannot be fairly summarized here. determined the complaint adequately alleged both a breach and an anticipatory repudiation of a contract which encompassed the replacement by plaintiff developer of defendant’s single room occupancy building with a mixed-use residential and commercial building for a 40-year lease term:

” ‘An anticipatory breach of contract by a promisor is a repudiation of [its] contractual duty before the time fixed in the contract for . . . performance has arrived’ ” … . Under the doctrine of anticipatory repudiation or anticipatory breach, “if one party to a contract repudiates [its] duties thereunder prior to the time designated for performance and before [it] has received all of the consideration due . . . thereunder, such repudiation entitles the nonrepudiating party to claim damages for total breach” … . To constitute repudiation, “there must be some express and absolute refusal to perform” … that is “positive and unequivocal” … .

The first cause of action alleges [defendant] engaged in multiple acts that breached the ground lease agreement: a set of acts in refusing to sign the cure agreement tendered in 2015, and a 2021 statement that it would never sign any agreement. Contrary to the conclusions of the courts below, a claim for breach and a claim for anticipatory repudiation can both be stated on these facts at the pleading stage. * * *

Taking the facts alleged in the complaint as true, which we must do at this stage of the proceeding, [plaintiff] sufficiently demonstrated that [defendant’s] 2021 statement was both a new development and a distinct “material breach that escalated, for the first time, to an unequivocal repudiation” … . Audthan LLC v Nick & Duke, LLC, 2024 NY Slip Op 02223, CtApp 4-25-24

Practice Point: Here the complaint adequately alleged both a breach of contract and an anticipatory repudiation of the contract.

 

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THE THIRD DEPARTMENT DETERMINED THE NEW YORK STATE UNIFORM FIRE PREVENTION AND BUILDING CODE PROVIDES SUFFICIENT STANDARDS AND MECHANISMS FOR ENFORCEMENT OF THE CODE PROVISIONS; A TENANT WHOSE BUILDING WAS DECLARED UNSAFE AFTER ORDERS TO REMEDY DEFECTS WERE IGNORED BY THE LANDLORD BROUGHT A PETITION FOR A WRIT OF MANDAMUS TO COMPEL THE SECRETARY OF STATE TO STRENGTHEN CODE ENFORCEMENT STANDARDS AND MECHANISMS; THE PETITION WAS DENIED (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice McShan, over a two-justice dissent, determined that the regulations associated with the enforcement of the NYS Uniform Fire Prevention and Building Code (Uniform Code) are adequate. Petitioner, a former tenant in a building which was ultimately declared unsafe after several orders to remedy building-defects were ignored by the landlord, brought a petition for a writ of mandamus requiring the NYS Secretary of State to provide standards for the enforcement of the Uniform Code. The petition was dismissed after an exhaustive discussion of the relevant regulations and enforcement standards and mechanisms. The opinion is too detailed to fairly summarize here. Matter of Clements v New York Secretary of State, 2024 NY Slip Op 01756, Third Dept 3-28-24

 

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THE CITY OF KINGSTON PROPERLY DECLARED A RENTAL-UNIT SHORTAGE-EMERGENCY AND PROPERLY IMPOSED LIMITATIONS ON RENT INCREASES DURING THE EMERGENCY PERIOD (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice Egan, reversing (modifying) Supreme Court, determined the respondent City of Kingston properly declared a rental-unit shortage emergency and properly imposed limits on rent increases during the emergency period. Apparently the City of Kingston experienced an influx of new residents moving from New York City during the COVID pandemic. The opinion is too detailed to fairly summarize here:

The Emergency Tenant Protection Act of 1974 (ETPA) … was enacted to “permit[ ] regulation of residential rents [for many living accommodations] upon the declaration of a housing emergency in New York City” or a similar declaration by municipalities in Nassau County, Westchester County or Rockland County … . The ETPA specifically provided, in relevant part, that the governing body of a municipality in Nassau County, Westchester County or Rockland County could make “[a] declaration of emergency . . . as to any class of housing accommodations if the vacancy rate for the housing accommodations in such class within such municipality is not in excess of five percent” …. Thereafter, a county rent guidelines board, “consist[ing] of nine members appointed by the commissioner of housing and community renewal upon recommendation of the county legislature,” would, among other things, establish annual guidelines for rent adjustments at the impacted accommodations until the housing emergency had abated or ended … .

Pursuant to the Housing Stability and Tenant Protection Act of 2019 … [hereinafter HSTPA]), the Legislature allowed municipalities statewide to opt in to the rent adjustment scheme created by the ETPA upon a declaration of emergency due to a housing vacancy rate of 5% or less … . Matter of Hudson Val. Prop. Owners Assn. Inc. v City of Kingston N.Y., 2024 NY Slip Op 01593, Third Dept 3-21-24

Practice Point: Because of an influx of new residents during the COVID pandemic, the City of Kingston properly declared a rental-unit-shortage emergency and properly imposed limitations on rent increases during the emergency.

 

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THE FACT THAT PLAINTIFF WAS SPECIFICALLY TARGETED FOR A HOME INVASION DID NOT PRECLUDE A FINDING THAT INADEQUATE BUILDING SECURITY WAS A PROXIMATE CAUSE (FIRST DEPT).

The First Department, reversing Supreme Court, determined defendant property owners should not have been awarded summary judgment in this home invasion case. The fact that plaintiff was specifically targeted did not preclude a finding that building security was inadequate:

Plaintiff was the victim of a home invasion of his apartment in a building owned and operated by defendants. The incident began when someone knocked on plaintiff’s apartment door and asked by name for his niece, who also lived in the apartment. When plaintiff looked through the peephole, he thought he saw a young woman, but the peephole was blurry, as it had been since plaintiff had moved in three or four years earlier. Plaintiff also testified that the chain guard on the door did not function properly. When plaintiff opened the door slightly, the young woman and a man he had not seen through the peephole pushed their way into the apartment and pistol whipped him. After demanding $5,000 that had purportedly been sent to plaintiff’s niece, the two assailants assaulted plaintiff for an extended period and looted the apartment before leaving.

Defendants failed to establish their entitlement to summary judgment dismissing the complaint, as evidence that an attack was targeted toward a particular person does not sever the proximate cause link as a matter of law in cases alleging negligent security … . In light of the record evidence that the building’s locks were malfunctioning, and that plaintiff’s apartment peephole and chain lock were defective, proximate cause is for the factfinder to decide … . Cabrera-Perez v Promesa Hous. Dev. Fund Corp., 2024 NY Slip Op 01338, First Dept 3-14-24

Practice Point: The fact that plaintiff was deliberately and specifically targeted for a home invasion did not preclude a finding that malfunctioning locks and a defective peephole constituted a proximate cause of the invasion and consequent injury.

 

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IN THIS SLIP AND FALL CASE, STEPS WHICH DO NOT HAVE UNIFORM RISER HEIGHTS COULD CONSTITUTE A DANGEROUS CONDITION UNDER COMMON LAW NEGLIGENCE PRINCIPLES, WITHOUT REFERENCE TO WHETHER A BUILDING CODE WAS VIOLATED; BOTH THE PROPERTY OWNER AND THE SUBLESSEE COULD BE LIABLE (FIRST DEPT). ​

The Second Department, reversing Supreme Court in this slip and fall case, determined the steps which did not have uniform riser heights could constitute a dangerous condition for which the property owner and the sublessee could be liable:

Here, the record demonstrates that the riser heights of the steps were not uniform and that the top riser was approximately three inches taller than the bottom riser. Viewing the evidence in the light most favorable to the plaintiff as the nonmoving party … , we find that both the defendant owner and the defendant car service [the sublessee] failed to demonstrate, prima facie, that a dangerous condition did not exist on the steps or that the disparity in riser heights was not a proximate cause of the accident … . Amparo v Christopher One Corp., 2024 NY Slip Op 01286, 3-13-24

Practice Point: Steps which do not have uniform riser heights can constitute a dangerous condition which is  the proximate cause of a slip and fall under common law negligence principles, irrespective of whether the non-uniform riser heights violated a building code.

 

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THE PURPORTED ORAL ASSIGNMENT OF A SUBLEASE FOR MORE THAN A YEAR VIOLATED THE STATUTE OF FRAUDS; THE CRITERIA FOR AN ASSIGNMENT “BY OPERATION OF LAW” WERE NOT MET (FIRST DEPARTMENT). ​

The First Department, reversing (modifying) Supreme Court, determined the oral assignment of a sublease was invalid under the statute of frauds and there was no assignment “by operation of law:”

An oral assignment of the sublease here would have to satisfy the statute of frauds, which requires the assignment of such a sublease (for more than one year) to be in writing (see General Obligations Law § 5-703[2] …). Although, in the absence of a written assignment, a presumption of “assignment by operation of law” sufficient to satisfy the statute of frauds may be created by a “tenant in possession” paying rent … , such as where a tenant pays the full rent for some extended period of time … , no such presumption applies in the circumstances here. The terms of the sublease allowed for a sublease/occupation but expressly forbade oral assignments and included a “no waiver” clause, and the occupancy and payments by [defendant]  here was not conduct “unequivocally referrable” to any purported agreement by the parties to orally modify the no oral assignment term … . Innerworkings, Inc. v Arik Eshel CPA & Assoc. P.C., 2024 NY Slip Op 00972, First Dept 2-27-24

Practice Point: An oral assignment of a sublease for more than a year violates the statute of frauds.

Practice Point: Payment of rent for an extended period of time may satisfy the statute of frauds “by operation of law” (not the case here).

 

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FOR PURPOSES OF THE RELATION-BACK DOCTRINE, A LANDLORD AND A TENANT ARE NOT “UNITED IN INTEREST” (FIRST DEPT).

The First Department, reversing Supreme Court, determined the landlord-tenant relationship between the insured and the defendant building owner, Marion, did not constitute a “unity of interest” such that a negligence action against Marion could be commenced after the statute of limitations had run:

There are three conditions that must be satisfied for a claim asserted against a subsequent defendant such as Marion to relate back to claims asserted against another defendant: (1) both claims must arise out of the same conduct, occurrence, or transaction; (2) the new party must be “united in interest” with the original defendant, and by reason of that relationship can be charged with such notice of the institution of the lawsuit such that he will not be prejudiced in maintaining his defense on the merits; and (3) the new party knew or should have known that, but for a mistake by the plaintiff as to the identity of the proper parties, the action would have been brought against him as well … . * * *

… [A] landlord-tenant relationship, standing alone, does not give rise to vicarious liability or otherwise create unity of interest, which, as the Court of Appeals has recently reaffirmed, requires a situation in which the parties “stand or fall together and the judgment against one will similarly affect the other” … . Kingstone Ins. Co. v Marion Pharm. Inc., 2024 NY Slip Op 00805, First Dept 2-15-24

Practice Point: A landlord and a tenant are not united in interest for purposes of the relation-back doctrine and will not support adding a landlord to a complaint after the statute of limitations has run.

 

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A LETTER FROM AN ATTORNEY THREATENING LITIGATION CAN CONSTITUTE “RETALIATION” AGAINST THOSE WHO MAKE HOUSING DICSRIMINATION COMPLAINTS PURSUANT TO THE HUMAN RIGHTS LAW (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Singas, reversing the Appellate Division, determined a letter sent by an attorney for the landlord, Pine Ridge, to the respondent CityVision, a not-for-profit corporation which tests whether housing facilities engage in discrimination, constituted “retaliation” against those who make discrimination complaints. Here a CityVision employee, Renner, posed as a prospective tenant and allegedly was steered to a different apartment complex because she had children (discrimination based on familial status). CityVision’s complaint to the NYS Division of Human Rights (DHR) was dismissed. An attorney for Pine Ridge then sent a letter to CityVision which mentioned seeking damages. CityVision then filed a second complaint alleging the letter constituted “retaliation:” Although the matter was remitted to DHR because it was CityVision’s, not Pine Ridge;s, burden to show it was engaged in a protected activity, the Court of Appeals held that the threat of litigation can constitute “retaliation” in this context.

… [A] plaintiff bears the burden to establish a prima facie retaliation claim … . To meet that burden, the plaintiff must show that (1) they have “engaged in protected activity,” (2) the defendant “was aware that” the plaintiff “participated in” the protected activity, (3) the plaintiff suffered adverse action based upon the activity, and (4) “there is a causal connection between the protected activity and the adverse action” (id.). Only the first and third elements of CityVision’s retaliation claim are at issue here. ***

… [T]he record established that [the attorney’s] letter “shocked” CityVision’s employees and forced CityVision to expend resources and “scramble . . . to locate counsel” to address the threat. … [I]t was rational for DHR to conclude that the threatening letter caused CityVision to divert resources and could have dissuaded a person from pursuing a discrimination claim to protect their rights under the Human Rights Law. Indeed, a potential plaintiff might be chilled from filing a discrimination complaint when weighing the harm caused by the threat of retaliatory litigation, let alone the injury potentially occasioned by actual retaliatory litigation. DHR’s determination that the litigation threat amounted to adverse action in this case was rational and, thus, supported by substantial evidence. Matter of Clifton Park Apts., LLC v New York State Div. of Human Rights, 2024 NY Slip Op 00793, CtApp 2-15-24

Practice Point: Here a not-for-profit filed a complaint against a landlord alleging housing discrimination. After the complaint was dismissed, an attorney for the landlord sent a letter to the not-for-profit arguably threatening litigation. The letter constituted “retaliation” within the meaning of the Human Rights Law.

 

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THE OWNER OF A COOPERATIVE BUILDING WAS PROPERLY FOUND LIABLE FOR FAILING TO REMEDIATE LEAD PAINT IN A SHAREHOLDER’S APARTMENT WHICH WAS SUBLET TO PLAINTIFF AND HER YOUNG DAUGHTER (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Oing, determined the owner of the building (Windsor) in which a cooperative shareholder, Sersch, sublet her cooperative apartment to plaintiff, had constructive knowledge plaintiff’s young daughter was living with plaintiff. Plaintiff’s daughter was diagnosed with lead poisoning and peeling lead paint was found in the apartment. Summary judgment finding Windsor liable for failing to remediate the lead paint problem was affirmed:

Windsor’s agents’ frequent and consistent interactions with plaintiff and the infant plaintiff were sufficient to provide constructive notice to Windsor … . Windsor failed to proffer an affidavit from any of the doormen stating that they did not know plaintiff and the infant plaintiff or were unaware of their residence. Under these circumstances, Windsor failed to raise a triable issue of fact as to the issue of constructive notice … . * * *

Windsor argues that section [NYC Administrative Code] 27-2056.15(c) exempts it from the duty to remediate and abate the lead paint in the apartment because Sersch “occupied” the apartment during plaintiffs’ subtenancy. Here, the terms of the sublease and the stipulation of settlement clearly indicate that the apartment was not “occupied” by Sersch during plaintiffs’ subtenancy. E.S. v Windsor Owners Corp., 2024 NY Slip Op 00267, First Dept 1-23-24

Practice Point; Here the owner of a cooperative building was deemed liable under New York City law for failure to remediate lead paint in a shareholder’s apartment which had been sublet to plaintiff and her young daughter.

 

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