Harar Realty Corp. v. Michlin & Hill, Inc.

86 A.D.2d 182, 449 N.Y.S.2d 213, 1982 N.Y. App. Div. LEXIS 15383
CourtAppellate Division of the Supreme Court of the State of New York
DecidedApril 15, 1982
StatusPublished
Cited by17 cases

This text of 86 A.D.2d 182 (Harar Realty Corp. v. Michlin & Hill, Inc.) 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
Harar Realty Corp. v. Michlin & Hill, Inc., 86 A.D.2d 182, 449 N.Y.S.2d 213, 1982 N.Y. App. Div. LEXIS 15383 (N.Y. Ct. App. 1982).

Opinion

OPINION OF THE COURT

Sullivan, J.

Petitioner is the net lessee of the premises at 44 West 56th Street where, utilizing the first two floors, it operates a restaurant. Its lease with R.S.N. Projects, Inc., the owner of the building, provides that the tenant may make alterations, if performed in a workmanlike manner and in accor[183]*183dance with plans and specifications which must be submitted to the landlord for approval if the cost estimate is more than $5,000, and in any event must be filed with and approved by the appropriate governmental authority before any work is commenced.

On February 21, 1978, petitioner leased the third and fourth floors to respondent Michlin & Hill, Inc., a producer of advertising jingles, for a 10-year term at a monthly rental of $2,000 for the first five years and $2,200 the last five years, under a lease which provided that Michlin could not make any alterations without petitioner’s prior written consent. The lease provided that the demised premises were to be occupied for “general publishing, record production, and advertising, commercial production activities, personnel management and booking agency activities and general allied areas in the entertainment industry, and general office purposes.”

Because the third and fourth floors had not been occupied for some time and were in a state of such disrepair as to require extensive renovation, petitioner agreed to a three and one-half month rent abatement. A witness described the conditions — “The third and fourth floor looked like a tenement that hadn’t been lived in in about 20 years. The walls and ceilings and floors were all corroded, if there at all. The electricity wasn’t working. There was glass broken everywhere. Basically it was a mess, and it needed complete renovation on our part.” Renovations were immediately commenced without the submission of any plans, and by May of 1978, Michlin had spent approximately $55,000 in replacing walls, ceilings and floors, and installing new windows.

Thereafter, sometime between October and December of 1978, Michlin installed a metal spiral staircase between the third and fourth floors, prompting petitioner, on April 25,1979, through its attorney, to complain, in writing, that Michlin had made structural changes without seeking prior approval or filing any plans with the Department of Buildings, and to request a meeting to discuss the matter. Apparently, the parties were unable to resolve their differences and on January 31, 1980 petitioner, citing only the installation without the landlord’s permission, served a [184]*184notice to cure, demanding that the staircase be removed within five days. When Michlin failed to comply petitioner served a notice terminating the tenancy, effective February 22, 1980. This holdover proceeding was thereafter commenced.

At trial petitioner established that Michlin had never sought permission to construct a stairway and that plans for the stairway were not submitted until after it had been installed. An issue of fact was raised as to whether Arthur James, petitioner’s secretary, who, concededly, was present in the restaurant from approximately 9:00 a.m. to 10:00 p.m., six days a week, knew of the stairway before its installation had been completed. James admitted that with knowledge that building plans had not been submitted for any of the renovations, he not only was aware that renovations were underway but had indeed inspected the premises while work was in progress. He testified, however, that the stairway was not installed until after completion of the repairs to the floor, walls and ceilings, and that only when he made a later inspection and observed three cut beams was he told that a stairway was being installed. He immediately authorized service of a notice to cure. James conceded that petitioner continued accepting rent after learning about the stairway.'

On the other hand, Arline Ackerman, Michlin’s president, testified that she saw Mr. James at the premises while the stairway was being installed and that he voiced no objection. The carpenter who constructed the stairway confirmed Ackerman’s testimony that James was present during its installation. In fact, the carpenter testified that when James asked him what he was doing, he replied, “Building a staircase.” Ackerman further testified that the building permit application was completed and presented to James for his signature before service of the notice to cure. According to Ackerman, James refused to sign and advised Michlin to send the documents to his lawyer. She also testified that until the stairway was installed the only means of passage between the third and fourth floors was by a fire stairway.

The parties stipulated that the stairway was installed in a workmanlike manner. An architect called by Michlin [185]*185testified that the floor structure at the site of the stairway could not only be restored to its original condition but would provide greater support than before. He further testified that a fair and reasonable charge for the stairway’s installation was $3,500, and that the stairway could be removed and the three beams restored for approximately $1,000.

Civil Court (Ribaudo, J.) dismissed the petition and counterclaims, and both parties appealed. Appellate Term, finding that Michlin failed to obtain petitioner’s consent and that the installation of the stairway constituted a material alteration of the premises in violation of the lease, modified Civil Court’s order to the extent of reversing so much of it as dismissed the petition, and awarded a final judgment of possession to petitioner. We granted leave to appeal. The only issue is the award of possession to petitioner. We believe that it was error to find that the installation of the staircase constituted a material breach of the lease entitling petitioner to possession, and thus reverse and reinstate the order of the Civil Court.

The rule is well established that a lease confers “the use, not the dominion of the property demised” and that “[t]he power of making an alteration does not arise out of a mere right of user” (Agate v Lowenbein, 57 NY 604, 607). Thus, a tenant may not, without the consent of the landlord, make material changes or alterations in the demised premises. (Agate v Lowenbein, supra, p 608; Cohen v Simon Strauss, Inc., 139 NYS 929.) Any alteration which materially injures the landlord’s reversionary interest, or materially changes the nature and character of the demised premises constitutes waste. (Lyon v Bethlehem Eng. Corp., 253 NY 111, 113; Andrews v Day Button Co., 132 NY 348, 353.)

The breach of a covenant not to make alterations is a substantial violation of the lease. (Rumiche Corp. v Eisenreich, 40 NY2d 174, 178; Andrews v Day Button Co., supra, p 353; Agate v Lowenbein, supra, p 607.) Under a lease which provides that alterations may not be made without the landlord’s consent, such consent may be withheld, even arbitrarily, where the contemplated alterations are structural. (Wall Nut Prods, v Radar Cent. Corp., 20 AD2d 125.) A lease provision that a tenant may not make alterations [186]*186without the landlord’s consent is, however, “only an undertaking imposed by law, which is to the effect that any material and substantial change or alteration of the nature of the property is. waste.” (Andrews v Day Button Co., supra, p 353, citing Agate v Lowenbein, supra.)

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86 A.D.2d 182, 449 N.Y.S.2d 213, 1982 N.Y. App. Div. LEXIS 15383, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harar-realty-corp-v-michlin-hill-inc-nyappdiv-1982.