Recitation, as required by CPLR 2219(A), of the papers considered in the review of this Notice of Motion: PAPERS NUMBERED NOTICE OF MOTION AND AFFIRMATION & AFFIDAVIT ANNEXED 1 NOTICE OF CROSS MOTION AFFIDAVIT & AFFIRMATION ANNEXED 2 ANSWER AFFIRMATION 3 REPLYING AFFIRMATION & AFFIDAVIT EXHIBITS 4 STIPULATIONS OTHER DECISION/ORDER Upon the foregoing cited papers, the Decision/Order in this notice of motion pursuant to CPLR §2201 is as follows: In this failure to renew lease holdover proceeding, respondent moves to dismiss the proceeding pursuant to CPLR 3211(a)(7) based on the failure to state a cause of action. Petitioner opposes the motion and cross-moves for an order directing respondent to pay post-petition use and occupancy. Respondent did not file opposition papers to the cross-motion. The Court consolidates both motions for disposition. The Facts Petitioners are the owners and landlords of the subject premises pursuant to a bargain and sale deed dated October 10, 2018. Respondent, Valerie Pierre, is the tenant of record. The latest undisputed renewal lease is dated September 29, 2015 for a term of one year ending on December 31, 2016. This renewal lease is between respondent and petitioner’s predecessor-in-interest at a legal regulated rent of $2,453.21 and a preferential rent of $1,574.53. Respondent also proffers a renewal lease dated July 10, 2018 between respondent and petitioner’s predecessor-in-interest at a legal regulated rent of $2,514.54 and a preferential rent of $1,613.89 for a two year term. The renewal lease ends on October 31, 2020. Respondent asserts that petitioner’s predecessor-in-interest sent her a different renewal lease offer dated September 12, 2017 with a legal rent of $2,853.88 for a one year renewal. On November 27, 2017, respondent emailed Brook Darby, an employee of petitioner’s predecessor-in-interest, and asked if the renewal offer was a mistake since it was a $879 increase from her expiring lease. See Exhibit D of Pierre Affidavit dated July 1, 2019. After a few back and forth exchanges, respondent rejected the renewal lease offer because “she simply could not afford it.” On November 29, 2017, respondent received an email from Brook Darby: “[i]t seems the previous asset manager raised you to the legal rent, which they are allowed to do by NYC law, however I discussed with the current asset manager and they agreed with me and dropped it down to $ 1,675, I will have my assistant create a new lease and mail it to you.” In June of 2018, petitioner’s predecessor-in-interest commenced a holdover proceeding against respondent for her failure to sign the lease renewal. Petitioner’s predecessor-in-interest and respondent entered into a Stipulation dated August 1, 2018, which was “so-ordered” by the court agreeing that “the subject proceeding is discontinued as the Respondent has agreed to a lease renewal.” On September 13, 2018, respondent mailed to petitioner’s predecessor-in-interest a signed copy of the renewal lease dated July 10, 2018, which contains the preferential rent of $ 1,613.89. She mailed the lease to the address listed on the brown envelope which contained the renewal lease offer. See Exhibit C of the Pierre Affidavit dated July 12, 2019. On March 5, 2019, respondent received a renewal lease offer dated March 4, 2019, from petitioner but refused to sign the renewal because she “was under the impression that I had already accepted the $1,613.89 lease….” Petitioner commenced the instant proceeding based on respondent’s failure to sign that renewal lease. Petitioner does not dispute the foregoing facts. Instead, petitioner refers the Court to an intervening nonpayment proceeding commenced by petitioner’s predecessor-in-interest on August 14, 2018. The petition alleges arrears based on the monthly rental amount of $ 1,574.53. Petitioner’s predecessor-in-interest and respondent resolved the proceeding by a stipulation of settlement wherein respondent agreed to pay the arrears. Respondent was not represented by counsel when she signed the first stipulation. During the pendency of that proceeding, the court issued at an order related to the arrears. The stipulation dated March 20, 2019, was negotiated by an attorney on behalf of respondent. The stipulation provides that the rent accrued at the monthly rate of $ 1,574.53. The Law Under the common law, a binding written lease occurs upon execution by parties thereto and delivery of the lease. 219 Broadway Corp. v. Alexander’s, Inc., 46 NY2d 506 (1979). This principle is recognized in the regulatory scheme for rent stabilized apartments. Pursuant to Rent Stabilization Code §2523.5, the landlord/owner of a rent stabilized apartment is statutorily mandated to offer a renewal lease on the same terms and conditions as the expiring renewal lease. The landlord/owner must give the tenant a period of 60 days to accept the offer and return the lease. Pursuant to Section 2522.5(b)(I) of the Rent Stabilization Code, the owner shall furnish to the tenant a copy of the fully executed renewal lease form within thirty days of receipt of the renewal signed by the tenant. Upon execution by the owner and delivery to the tenant, such form shall constitute a binding renewal lease. Rent Stabilization Code §2523.5 further provides in pertinent part: “…Upon failure of the owner to deliver a copy of the fully executed renewal lease form to the tenant within 30 days from the owner’s receipt of such form signed by the tenant, such tenant shall not be deprived of any of his or her rights under the RSL and this Code and the owner shall be barred from commencing any action or proceeding against the tenant based upon nonrenewal of lease, pursuant to section 2524.3(f) of this Title…” Additionally, a rent stabilized lease renewal offer is binding upon the landlord even where the landlord claims that it was sent unintentionally or due to clerical error. See 123 West 15, LLC v. Compton, 4 Misc3d 138(A)(App Trm 1st Dept 2004); Steinmetz v. Barnett, 155 Misc2d 98 (Civ Ct NY Co 1992). The lack of intent is immaterial because the law requires the offer of the lease renewal to be binding. Application of the Law Respondent has established a defense to the proceeding based on documentary evidence. She proffers a lease renewal dated July 10, 2018 with the actual mailing envelope reflecting the sender as ZPM Management LLC and the postmark date of July 11, 2018. The renewal lease offer reflected petitioner’s predecessor-in-interest as the owner/landlord. The copies of the emails provide proof of the negotiations between respondent and an agent for petitioner’s predecessor-in-interest whereby the parties agreed to a new preferential rent. The Email of Brook Darby dated Wed, Nov 29, 2017 reads in part: “A landlord can go up to the legal rent if they choose to, as long as you know you are paying a preferential rent…However, I was able to talk to the asset manager and get her down to a normal increase.” Clearly, a preferential rent for an undetermined amount was agreed to and the amount eventually set by the renewal lease offer sent in July 2018. On May 17, 2018, respondent received the termination notice dated May 18, 2018, which referenced respondent’s failure to sign a renewal lease dated September 12, 2017. The first court date of the nonrenewal proceeding was August 1, 2018. Between May and August, petitioner’s predecessor-in-interest sent a new lease renewal offer which would have served to vitiate the nonrenewal holdover proceeding. On August 1, 2018, the “so-ordered” stipulation discontinued the proceeding citing to respondent’s agreement to a lease renewal. Respondent’s signature dated September 18, 2019 supports her contention that she accepted the June 2018 lease renewal offer, signed it after her discussions in court with counsel and returned the lease renewal to petitioner’s predecessor-in-interest. The rent stabilized lease renewal dated July 10, 2018 and mailed July 11, 2018, was binding on petitioner’s predecessor-in-interest once it was mailed to the respondent. Respondent had sixty days to consider the offer and accept. Respondent accepted the offer by signing and delivering the renewal lease in September of 2018 or approximately 60 days after mailing by the petitioner’s predecessor-in-interest. The emails and court stipulation clearly establish that the lease renewal offer was made after negotiation between the parties and was not due to a clerical error. Had it been sent in error, the renewal lease was still binding on petitioner’s predecessor-in-interest. See Kokot v. Barton, 12 Misc3d 614 (Civ Ct, NY Co 2006). The law is also settled that the renewal lease dated July 10, 2018 is binding on petitioner herein — the subsequent owner/landlord of the subject premises. As noted earlier, petitioner does not dispute the facts as it was not the owner of the subject premises when the renewal lease was offered and does not have personal knowledge of the actions between petitioner’s predecessor-in-interest and respondent. Instead, petitioner contends that the court stipulations entered into by respondent in the nonpayment proceeding debunk respondent’s claim that she signed and returned the renewal lease dated July 10, 2018. This argument is not persuasive since petitioner’s predecessor-in-interest was precluded from collecting any rent increases until a fully executed copy of the renewal lease was returned to respondent. See Rent Stabilization Code §2523.5. The proceeding was commenced in August of 2018 within the 60 day window respondent had to review and sign the renewal lease offer mailed on July 11, 2018. The petition properly alleged the preferential lease rate of $1,574.53 reserved in respondent’s most recent lease renewal. Furthermore, the stipulations did not expressly reference the renewal lease dated July 10, 2018 or seek to modify its terms and conditions. The fact that the nonpayment proceeding overlapped the date the renewal lease was signed by respondent did not nullify the statutory effect their actions had in creating a legally binding contract. As noted in Kokot v. Barton: “[Rent Stabilization Code Section 2523.5] serves to ensure that, in spite of the landlord’s failure to deliver the renewal lease, a tenant both maintains the protections of rent regulatory status and is immunized from suit by the landlord. Thus, the regulatory context makes the delivery of the fully executed lease the final formalization of the renewal agreement and not an opportunity for the landlord to change his mind and unravel the renewal lease agreement.” Accordingly, the Court grants respondent’s motion and dismisses the petition. The renewal lease dated July 10, 2018 is binding on petitioner and in effect. The Court further denies petitioner’s cross-motion for use and occupancy without prejudice all claims and defenses. The Court shall mail courtesy copies of its decision/order to counsel. Dated: November 8, 2019 Brooklyn, New York
