546 West 156th Street HDFC v. Smalls

43 A.D.3d 7, 839 N.Y.S.2d 62
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJune 26, 2007
StatusPublished
Cited by27 cases

This text of 43 A.D.3d 7 (546 West 156th Street HDFC v. Smalls) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
546 West 156th Street HDFC v. Smalls, 43 A.D.3d 7, 839 N.Y.S.2d 62 (N.Y. Ct. App. 2007).

Opinion

OPINION OF THE COURT

Tom, J.P

This Court is asked to decide whether the parties to a residential lease can, by private agreement, subject an apartment to regulation under the Rent Stabilization Law where the building was created as a not-for-profit housing cooperative under the Private Housing Finance Law and is statutorily exempt from rent stabilization.

Petitioner landlord is a housing development fund company, a cooperative incorporated in November 1988 under Private Housing Finance Law article XI and Business Corporation Law § 402 (Private Housing Finance Law § 573 [1] [a]). The subject building, located at 546 West 156th Street in the Borough of Manhattan, was previously owned by the City of New York and managed by the tenants under the Tenant Interim Lease program administered by the Department of Housing Preservation and Development. Petitioner purchased the building from the City in September 1989 following in rem tax foreclosure proceedings. Petitioner covenanted to operate the property as a housing project for persons or families of low income.

Respondent Lenise Smalls is the named tenant of apartment 10, which is the subject of the instant nonpayment proceeding. She has occupied apartment 10 with her two children since 1994 and previously resided in apartment 22, located in the same building. At the time her initial tenancy commenced in 1989, the building was still owned by the City of New York. It is [9]*9undisputed that respondent has neither purchased nor been extended an offer to purchase the shares allocated to her present apartment under the proprietary lease.

In a prior nonpayment proceeding commenced in March 1996, the subject apartment was identified as a rent-stabilized dwelling unit. The proceeding was resolved by a December 1996 stipulation providing that respondent would pay $3,871 in rent arrears and petitioner would perform certain repairs. The stipulation further provides:

“Petitioner agrees to give respondent a preferential rent of $425 for the subject apartment, and to grant her tenancy pursuant to the Rent Stabilization Code of NYC, both to commence with a two-year rent stabilized lease effective 11/1/96. Petitioner must register legal rent based on $550 per month & indicate on registration preferential rent to Ms. Smalls.”

Following expiration of the stipulated lease term, the parties renewed the lease in 1998 at $442 a month and in 2000 at $486 a month. Petitioner registered the unit as a rent-stabilized apartment and registered all rents with the Division of Housing and Community Renewal.

The present nonpayment proceeding was initiated during the lease term that commenced in February 2002, during which the rent was again set at $550 a month. The petition dated June 11, 2003 asserts that the tenancy is exempt from the Rent Stabilization Law because the premises are located in a building owned by a cooperative corporation operated for the charitable purpose of providing low-income housing. In her pro se answer, respondent alleged a rent overcharge and breach of the implied warranty of habitability. Thereafter, she brought the instant motion to amend her answer to include these counterclaims and for summary judgment dismissing the petition. Respondent contended that her tenancy is subject to the Rent Stabilization Law and asserted that “petitions which misstate the fundamental rent regulatory status of the premises at issue should be dismissed.” Alternatively, she sought partial summary judgment as to the rent-stabilized status of her apartment.

In opposition, petitioner cross-moved to dismiss the counterclaims. Petitioner contended that by making the lease subject to the Rent Stabilization Law, the parties’ stipulation necessarily incorporates provisions exempting from the law’s coverage leaseholds in buildings operated as cooperative corporations or [10]*10for charitable purposes. Petitioner further argued that its use of rent stabilization renewal forms or lease riders does not foreclose a claim, made at the expiration of the lease term, that the premises are exempt from the provisions of the statute.

Civil Court agreed that the subject premises are exempt from the Rent Stabilization Law, holding that the parties’ stipulation does not create a stabilized tenancy or give respondent renewal rights under the statute. In denying her motion, the court rejected respondent’s proposition that the stipulation, having been so ordered by the court, confers rent stabilization rights in perpetuity, declining to accord collateral estoppel effect to petitioner’s adherence to rent stabilization formalities. The court ruled that while the parties were bound by the stipulation, “that merely means that petitioner did not have the right to collect more than the agreed upon rent through the expiration of the last lease signed by the parties” (1 Misc 3d 906[A], 2003 NY Slip Op 51523[U], *3).

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Bluebook (online)
43 A.D.3d 7, 839 N.Y.S.2d 62, Counsel Stack Legal Research, https://law.counselstack.com/opinion/546-west-156th-street-hdfc-v-smalls-nyappdiv-2007.