Recitation, as required by CPLR 2219(a), of the papers considered in review of this Motion to Dismiss or in the alternative summary judgment.Papers NumberedNotice of Motion and accompanying papers 1Affirmation in Opposition 2Reply Affirmation 3Court file passimDECISION/ORDER The within motion seeks an order pursuant to CPLR 3212 granting respondent summary judgment on his first affirmative defense and dismissing this proceeding asserting the court lacks jurisdiction. Petitioner opposes the motion.Petitioner sought to terminate respondent’s tenancy via service of a thirty — day notice upon respondent. The notice states as a “reason” for the proceeding that “no reason necessary or required by law.” The notice further states, “[h]eretofore a prior owner of the premises executed a rider to tenant’s lease with the LINC program, which rider purportedly provides for automatic renewals of tenant’s lease, which expired June 30, 2017. The aforesaid provisions requiring automatic renewal are illegal and unenforceable.” See Alston v. Starrett City, Inc., 161 AD 3d 37. Upon respondent’s failure to vacate, the within petition ensued. Respondent retained an attorney and filed an answer. The first affirmative defense, the basis of this motion, argues that respondent is entitled to a renewal lease pursuant to his lease, and to successive renewals thereafter for a period of three years. Consequently, respondent argues that his lease has not expired and the within proceeding must therefore be dismissed as he is in compliance with the terms of the LINC program and his lease.The initial lease between respondent and his predecessor-in-interest, Robert Ricca, ran from July 1, 2016 through June 30, 2017. The rider to this lease (Exhibit F, respondent’s motion) provides the respondent’s lease obligations and, as is the subject of the within dispute, the terms of renewal as set forth in paragraphs 3 and 4 of the rider.Paragraph 3. provides, “Program tenant is automatically entitled to a self-executing renewal of the Lease for a second year at the same total monthly rent provided for in this rider, provided that (a) funding for the program remains viable and program tenant has been found eligible by the City for a second year of the Program, or (b) Program tenant is able to pay his/her entire rent for a second year.”Paragraph 4. states, “Program Tenant is further automatically entitled to three additional one year leases at the same monthly rent provided for in this rider, increased by a percentage no greater than that allowed at that time for one year leases for rent stabilized apartments in New York City, regardless of whether the Apartment is subject to rent Stabilization, provided that: (a) funding for the program remains available and the program tenant has been found eligible by the City for the applicable year of the program, or (b) program tenant is able to pay his/her entire rent for the applicable year.”On June 30, 2016 Robert Ricca, the former owner also signed “Living In Communities (LINC) I, II, III, IV and v. programs Landlord’s statement of Understanding.” (Motion, Exhibit G). This document reiterates the landlord’s understanding of the terms cited above in more elaborate detail. It also provides, at paragraph 11, that the owner will notify the City if the ownership of the property changes. Pursuant to deed dated June 5, 2017 Robert Ricca sold the property to SI Tessa, petitioner herein, via a Bargain and Sale Deed with Covenants against Grantors Acts. (Exhibit H)Prior to this petitioner commenced a nonpayment action against respondent seeking rental arrears through January 2018. The petition alleged a lease and the arrears were ultimately paid. The delinquency apparently arose when petitioner’s predecessor-in-interest failed to notify the City of the transfer of property and the checks continued to be issued to the name of the former owner. That proceeding (L&T 50209/18) was ultimately discontinued.Currently, respondent argues that the lease constitutes a covenant that runs with the land, that the holding in Alston does not apply to the facts in this proceeding, and that petitioner should be estopped from asserting respondent is a month-to-month tenant. Petitioner opposes, arguing that Alston does apply and permits it to terminate respondent’s tenancy. Petitioner argues in the alternative that even if Alston does not apply that since the renewal terms are not expressed in the lease that they cannot be enforced as a covenant because there is no express right to enforce the terms of the lease as the terms related to rent in the three successive renewals do not explicitly establish the rents. They only provide a point of reference upon which the rents may be determined. Interestingly, petitioner also questions the outcome in the event respondent were to refuse to accept an increase offered pursuant to the terms of the original lease, and argues that this then becomes an agreement to agree, which is unenforceable.Edward Wydra, a managing member of petitioner, submitted a supporting affidavit in which he asserts he was unaware of the terms and provisions of the lease prior to purchasing the property and that he first saw the lease when he commenced the earlier nonpayment proceeding. He observes that the lease was not recorded on ACRIS and thus, that neither he nor petitioner would have been aware of it prior to purchasing the property and reiterates the point that as no dollar amount is stated for the prospective third through fifth leases that they are unenforceable.In Alston, two voucher recipients of the LINC program sought to rent units in respondent’s buildings with their vouchers and were declined. Starett City is not subject to the Rent Stabilization Laws. The court assessed petitioners’ claims of discrimination under Local Law No. 10 of the City of New York in light of the proscriptions found in the Urstadt Law (L 1971, ch 372, as amended by L 1971, ch 1012[{McKinney's Uncons laws of NY 8605]) which states in part: “[N]o local law or ordinance shall hereafter provide…for the regulation and control of residential rents and eviction in respect of any housing accommodations which are (1) presently exempt from such regulation and control or (2) hereafter decontrolled either by operation of law or a city housing rent agency, by order or otherwise…”The Court determined that the LINC vouchers, which it described as non-negotiable, required the landlord to enter into a lease rider, as described above. As noted, this restricts the increases that may be taken for a period of five years. Starrett City is exempt from Rent Stabilization as it is governed by DHCR pursuant to the Mitchell-Lama law and its rents set pursuant to a different process. The Court determined “[w]here the LINC program runs afoul of the Urstadt Law, however, is in its use of mandatory riders that compel a landlord to renew a lease for up to five years at a minimum increase specifically tied to other City rent regulatory programs to which the housing unit is not presently subject.” The Court went on to state, “the application of Local Law 10 to compel acceptance of LINC program rent vouchers as presently structured effectively expands the number of buildings subject to City control by imposing on those housing units a more stringent control than presently exists.” Id. The Court concluded, “…it is clear that compelling defendants to accept tenants with LINC program rent vouchers as structured herein violates the Urstadt Law’s proscription against expanding the number of housing units subject to “more stringent or restrictive provisions of regulation and control than those currently in effect.” Id.This case is readily and easily distinguishable from Alston. In Alston the petitioners sought to compel a landlord to accept a voucher that contained the above discussed riders that contained significant restrictions where the landlord did not want to be so constrained. In this case the petitioner’s predecessor-in-interest voluntarily and freely agreed to be bound to the lease and to the restrictions and limitations it contained.Assuming for the sake of argument petitioner had not pursued the nonpayment and had only learned of the lease following the purchase of the property the argument related to RPL Section 291 would arguably prevail. That section states, as relevant, “Each such conveyance not so recorded is void against any person who subsequently purchases or acquires by exchange, the same real property or any portion thereof, or acquires by assignment the rent to accrue therefrom as…of the real property, in good faith and for valuable consideration, from the…assignor…and whose conveyance…is first duly recorded, and is void as against the lien upon the same real property or any portion thereof.” The practice commentary states, “Although a lease for a term greater than three years is a conveyance, recording is not required. RPL Section 290. Nevertheless, recording may be required to furnish constructive notice to third parties. Where there is actual notice of a conveyance, the courts will not differentiate between a recorded and an unrecorded lease.” Practice commentaries, Dan M. Blumenthal, 2018.Thus, in this proceeding, as the lease was not recorded petitioner would have been able to assert this argument as a defense and, presumably, the question would have become one of whether petitioner had actual knowledge and, potentially, whether the sale was “a good faith transaction for valuable consideration.” That is not the scenario here. When petitioner sued for and ultimately recovered rental arrears in the prior proceeding and availed itself of the benefits of the lease and, in essence, relied upon it to recover the arrears, petitioner ratified the lease as it then both knew and understood the terms and type of lease that respondent held under and, having taken the benefit, cannot now seek its disavowal. In short, in this case and under its specific facts, petitioner is in fact estopped from asserting there is no lease. The argument that it is an agreement to agree also fails as the method and amount by which prospective increases are to be calculated is readily ascertainable pursuant to increases set by the Rent Guideleines Board.The motion is granted. The petition is dismissed.Dated: May 17, 2019
