943 Lexington Avenue, Inc. v. Niarchos

83 Misc. 2d 803, 373 N.Y.S.2d 787, 1975 N.Y. Misc. LEXIS 2987

• Court: Appellate Terms of the Supreme Court of New York
• Decided: September 24, 1975
• Status: Published

Opinions

Per Curiam.

In this holdover summary proceeding brought by a co-operative corporation the underlying issue is the enforceability of a rent surcharge of 5% per month, commencing with the third month of default in the payment of rent, to the date of payment, adopted by resolution of petitioner’s stockholders and board of directors almost 20 years after decedent had entered into possession of the demised apartment. Neither decedent’s proprietary lease nor the corporate certificate of incorporation or by-laws contains the charge.

The charge, while not technically interest, is at the rate of 60% a year. Examined in the light of the public policy expressed in section 190.40 of the Penal Law, which makes an interest charge of more than 25% a criminal offense, we find the charge unreasonable and confiscatory in nature and therefore unenforceable (Vernon Manor Co-op. Apts., Section I v Salatino, 15 Misc 2d 491).

Final judgment, entered July 1, 1975 (Nason, H. O.), reversed without costs, and final judgment directed in favor of tenant, conditioned upon payment by tenant to petitioner, within five days after service of a copy of the order entered hereon with notice of entry, of all outstanding rent and additional rent other than the surcharge described above, with legal interest, which became due to March 3, 1975. In that event, the final judgment in favor of tenant shall be without prejudice to any of the rights of petitioner arising after March 3, 1975. Should tenant fail to make the payments herein provided for, within the time herein limited, final judgment affirmed with $25 costs.