Recitation, as required by CPLR §2219(a), of the papers considered in review of the instant motions. Papers Numbered Notice of Motion, Affirmation, Affidavit and Annexed (Ex. A-G) 1 Notice of Motion, Affirmation, Affidavit and Annexed (Ex. A-H) 2 Affirmation in Opposition and Annexed (Ex. 1) 3 Affirmation in Opposition and Annexed (Ex. 1-2) 4 Reply Affirmation and Annexed (Ex. A-C) 5 Reply Affirmation and Annexed (Ex. A-C) 6 DECISION/ORDER Upon the foregoing cited papers, these motions are consolidated for disposition and decided as follows: Petitioner commenced this nonpayment proceeding in September 2019, seeking $3,916.34 in rent arrears from June 2019 through September 2019 at $1,097.00 per month. On September 30, 2019, Respondent Pamela Reddick (“Respondent”) filed a pro se answer alleging that “the rent, or part of the rent, has already been paid to the Petitioner”; that “the petition seeks the HUD or Housing Authority Section 8 Part of the rent”; and that the “City FEPS Program misapplied rent amount to Petitioner” (sic). On November 27, 2019, Queens Legal Services filed a notice of appearance on behalf of Respondent. On January 7, 2020, Respondent moved, by counsel, (motion seq. 1) for an Order, pursuant to CPLR §§3211(a)(2) and/or (7), dismissing this proceeding on the basis that the predicate rent demand is defective. Alternatively, Respondent sought leave to serve and file an amended answer, pursuant to CPLR §3025 and §3211(f), to interpose affirmative defenses alleging lack of personal jurisdiction on the basis that she was at work when the predicate notice was allegedly served by personal service; defective rent demand in that the demand improperly seeks rent for months in which partial or full payment was made and states a rent amount that is inconsistent with the most recent renewal lease; and that the petition fails to state a cause of action, as it does not state the facts upon which this proceeding is based, as required by RPAPL §741(4), for the same reasons stated for Respondent’s allegation that the rent demand is defective. Before submission of the motion, Respondent withdrew those branches seeking relief under CPLR §3211. Therefore, the sole remaining branch of this motion is that which seeks relief under CPLR §3025. In opposition, Petitioner argues that Respondent’s request for leave to serve and file an amended answer should be denied, since she failed to demonstrate a reasonable excuse for her delay in seeking to amend her answer to include affirmative defenses that could have been asserted in her original answer; that her proposed affirmative defenses are devoid of merit; and because she failed to submit a verification in support of her proposed amended answer. Respondent also separately moved (motion seq. 2) for an Order, pursuant to CPLR §3212, granting summary judgment in her favor by finding that her legal preferential rent was $863.94 for the lease term of January 1, 2018 to December 31, 2019 and further finding that all subsequent rent increases after December 31, 2019 should be calculated based upon the rent amount of $863.94 pursuant to RSC §26-511(c)(14), as amended by the Housing Stability and Tenant Protection Act of 2019 (“HSTPA”). Alternatively, Respondent seeks leave to conduct discovery in the form of the document demand annexed to her motion, pursuant to CPLR §408, relating to Petitioner’s alleged unilateral increase of her preferential rent from $863.94 to $1,097.00 for the lease term of January 1, 2018 to December 31, 2019. According to Respondent, she first obtained possession of the subject apartment in or about 2013 by a rent stabilized lease with a monthly preferential rent of $847.00. The apartment is subject to the Rent Stabilization Law because the property receives a real estate tax credit under Real Property Tax Law §421-a and is subject to the Federal Low-Income Housing Tax Credit Program pursuant to 26 CFR §1.42 et. seq. Respondent is also a recipient of City FHEPS through the N.Y.C. Human Resources Administration (“HRA”). After expiration of her initial lease, Respondent continued to sign lease renewals with a monthly preferential rent of $847.00 until 2018. In February 2018, Respondent signed a lease renewal dated February 2, 2018 with a term commencing on January 1, 2018 and ending on December 31, 2019, a legal regulated rent of $1,972.77 and preferential rent of $863.94. The lease was subsequently signed by Petitioner, who then sent a copy of the fully executed lease to Respondent. A few months later, Respondent received an amended copy of the fully executed lease dated February 2, 2018. However, therein the preferential rent was increased to $1,097.00 monthly, which was the federal low-income housing tax credit (“LIHTC”) maximum allowable monthly rent for the subject apartment. The prior offered preferential rent of $863.94 was crossed out and a notation, indicating “tax credit”, was noted next to the new preferential rent and initialed, presumably by Petitioner’s agent. Respondent argues that, since the amended lease was never presented to her for review and acceptance and she never agreed upon the rent increase, the amended lease should not be considered her lawful lease agreement for the lease term of January 1, 2018 to December 31, 2019. Instead, she contends that the original lease dated February 2, 2018, which was agreed upon and fully executed by the parties, is the lawful lease for the lease term of January 1, 2018 to December 31, 2019 and that the preferential rent therein, in the amount of $863.94, is the lawful preferential rent for that term. In addition, Respondent argues that, given the passage of HSTPA in June 2019, she is entitled to retain the preferential rent of $863.94 for the life of her tenancy and all subsequent lawful increases must be based on that preferential rent. In its opposition papers, Petitioner does not dispute that the original lease dated February 2, 2018 was unilaterally amended after the lease was fully executed and returned to Respondent. In fact, Petitioner does not address the issue regarding the amended lease at all. Instead, Petitioner argues that Respondent did not submit evidence in admissible form to support her summary judgment motion. Petitioner also irrelevantly argues that the rent demand is a proper predicate for this proceeding, which is an issue that was not raised by Respondent in her summary judgment motion. The Court will first address Respondent’s request for leave to amend her answer. According to CPLR §3025(b), leave to amend a pleading should generally be freely granted absent unfair prejudice or surprise to the opposing party directly resulting from delay in seeking such leave. However, the court has discretion to deny such leave where the proposed amendment is palpably insufficient or totally devoid of merit as a matter of law. McCaskey, Davies & Assocs., Inc. v. New York City Health & Hospitals Corp., 59 N.Y.2d 755 (1983); Jeffrey Gardens Apt. Corp. v. LH Mgt., Inc., 157A.D.3d 941 (2nd Dept. 2018). Herein, this Court grants Respondent’s request for leave to amend her answer, since Petitioner did not demonstrate any unfair prejudice or surprise directly resulting from any delay in Respondent’s request. Furthermore, this Court finds that Respondent’s request to amend her answer was filed within a reasonable time after Respondent obtained counsel. The Court further finds that the proposed amendments are not palpably insufficient or totally devoid of merit, as a matter of law. McCaskey, Davies & Assocs., Inc. v. New York City Health & Hospitals Corp., supra.; Jeffrey Gardens Apt. Corp. v. LH Mgt., Inc., supra. Finally, Petitioner’s contention that Respondent’s request to amend her answer should be denied because she failed to submit a verification with her proposed amended answer was rendered moot by Respondent’s submission of her verification with her reply papers as Exhibit “C”. Accordingly, Respondent’s verified amended answer, in the form annexed to her motion as Exhibit “A” and her reply papers as Exhibit “C”, is hereby deemed properly and timely served and filed. As for Respondent’s request for summary judgment, summary judgment is appropriate where there is no genuine triable issue of fact and where the papers submitted warrant that the court directs judgment in favor of the moving party as a matter of law. Andre v. Pomeroy, 35 N.Y.2d 361 (1974). The function of the court is to determine whether any issues of fact exist that preclude summary resolution of the dispute between the parties on the merits. Consolidated Edison Co. v. Zebler, 40 Misc.3d 1230A (Sup. Ct. N.Y. 2013); Menzel v. Plotnick, 202 A.D.2d 558 (2nd Dept. 1994). The court must accept, as true, the non-moving party’s recounting of the facts and must draw all reasonable inferences in favor of the non-moving party. Warney v. Haddad, 237 A.D.2d 123 (1st Dept. 1997); Assaf v. Ropog Cab Corp., 153 A.D.2d 520 (1st Dept. 1989). The movant must submit admissible evidence to demonstrate prima facie entitlement to summary judgment as a matter of law and the absence of any issues of fact that require a trial. Zuckerman v. City of New York, 49 N.Y.2d 557 (1980); Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851 (1985); Alvarez v. Prospect Hosp., 68 N.Y.2d 320 (1986). Once a prima facie showing has been made, the burden shifts to the non-moving party to submit admissible evidence sufficient to raise a triable issue of fact. Giuffrida v. Citibank Corp., 100 N.Y.2d 72 (2003); Zuckerman v. City of New York, supra. In the case at bar, this Court finds that Respondent met her burden of proof with the submission of the relevant leases and her supporting affidavit. Petitioner’s argument that Respondent’s evidence is insufficient is belied by the fact that Petitioner also submitted the amended February 18, 2018 lease with its opposition papers, claiming, through its counsel, that it is the parties’ agreement for the stated lease term and the basis of the instant nonpayment proceeding, thus waiving any argument against its authenticity. As for the original lease dated February 18, 2018, Respondent authenticated this contract between the parties by her supporting affidavit. Petitioner did not raise any triable issues of fact as to this contract, since Petitioner did not submit an affidavit from a person with knowledge challenging its authenticity. In fact, Petitioner did not submit any evidence to dispute Respondent’s allegations, including her claim that she never consented to the rent increase, or to demonstrate any fraud relating to the original lease dated February 2, 2018. Furthermore, Petitioner did not dispute that it unilaterally amended the original lease dated February 2, 2018 after the lease was offered to, and signed by, Respondent, and then signed by Petitioner and provided to Respondent by Petitioner after its full execution. The court, in North Carolina Leasing Corp. v. DCHR, held that “nothing prevents an owner from using as base rent…an amount less than the maximum permissible rent authorized as of the date of the execution of the lease.” North Carolina Leasing Corp. v. DCHR, 156 A.D.2d 452, 454(2nd Dept. 1989). Likewise, the N.Y.C. Department of Housing Preservation and Development (“HPD”), which oversees the LIHTC Program, does not require a landlord of a LIHTC premises to charge the maximum allowable monthly rent. Instead, the HPD LIHTC Compliance Manual specifically states that a landlord “…may commit to charging less than the tax credit rent” and further states that “if a tax credit unit is rent stabilized, [a landlord can] charge lesser of the rent allowed by the tax credit program or Rent Stabilization.” HPD LIHTC Compliance Manual, at Chapter 8.3 “How to Calculate Maximum Allowable Rent”, Subsection E(1) and (4), at www.1.nyc.gov/assets/hpd/downloads/pdfs/services/HPS-LIHTC-Compliance-Manual.pdf. In light of the foregoing, it was legally permissible for Petitioner to charge Respondent a preferential rent amount lower than the maximum allowable LIHTC monthly rent. Consequently, Petitioner’s unilateral increase of Respondent’s preferential rent from the agreed upon amount of $863.94 in the original lease dated February 2, 2018 to the maximum allowable LIHTC monthly rent of $1.097.00 in the amended lease dated February 2, 2018, without Respondent’s consent, was improper, and thus, renders said amended lease void, as a matter of law. As the court held, in North Carolina Leasing Corp. v. DCHR, a landlord cannot retroactively correct the rent in a lease that was agreed upon by offer and acceptance without the permission of the tenant, unless there is a showing of fraud. North Carolina Leasing Corp. v. DCHR, supra. There was no such showing in this proceeding. As Respondent has sufficiently shown that Petitioner unilaterally amended the original lease dated February 2, 2018, without her consent, to increase her agreed upon preferential rent of $863.94 to the maximum allowable LIHTC monthly rent of $1.097.00, and Petitioner has failed to dispute same or otherwise raise a triable issue of fact to preclude the grant of summary judgment to Respondent, this Court finds that Respondent’s lawful preferential rent was $863.94 during the lease term of January 1, 2018 through December 31, 2019 as stated in the original February 2, 2018 lease. Next, RSC §26-511(c)(14), as amended by HSTPA effective June 14, 2019, provides that if a tenant is being charged and is paying a rent lower than the regulated rent, the rent to be charged on a renewal is that lower rent plus any legally permitted increases. The rent may return to the regulated rent only upon vacancy. HSTPA further states that “any tenant who is subject to a lease on or after the effective date of [this Act], or is or was entitled to receive a renewal or vacancy lease on or after such date…” is covered by the provision. HSTPA, Part E, Section 2. As HSTPA’s effective date of June 14, 2019 falls within the lease term of the original lease dated February 2, 2018, Respondent is entitled to retain her preferential rent of $863.94 for the life of her tenancy, subject to any adjustments and increases permitted by the Rent Guidelines Board, the Rent Stabilization Law or any other applicable law. Thus, upon expiration of the original February 2, 2018, any adjustments and increases must be based upon her preferential rent of $863.94. For the foregoing reasons, that branch of Respondent’s motion seeking an Order, pursuant to CPLR §3212, granting summary judgment in her favor by finding that her legal preferential rent was $863.94 for the lease term of January 1, 2018 to December 31, 2019 and further finding that all subsequent rent increases after December 31, 2019 should be calculated based upon her preferential rent of $863.94, pursuant to RSC §26-511(c)(14) as amended by the HSTPA, is granted. Next, that branch of Respondent’s motion seeking alternative relief, to wit: leave to conduct discovery, is denied as moot in light of this Decision. Notwithstanding, that branch of the motion is further subject to denial, since the complete proposed discovery demand was not submitted. Accordingly, Respondent’s motion seq. 1 is granted solely to the extent that her request for leave to amend her answer is granted, the remaining branches of motion seq. 1 having been previously withdrawn; and Respondent’s motion seq. 2 is granted, in part, and denied, in part, as explained herein. This matter is adjourned until March 26, 2021, at 9:30 am, for a pretrial conference via Microsoft Teams. This constitutes the Decision and Order of the Court. Dated: March 1, 2021
