Recitation of the papers considered in review of Respondent’s motion for summary judgment (Mot. Seq. #1), and Petitioner’s cross-motion for summary judgment (Mot. Seq. #2): NYSCEF Doc. Nos. 9-32. DECISION/ORDER In this holdover proceeding seeking possession of a rent-stabilized apartment, the enumerated ground for eviction is §2524.3(c) of the Rent Stabilization Code (“RSC”), which authorizes an eviction where “[o]ccupancy of the housing accommodation by the tenant is illegal because of the requirements of law and the owner is subject to civil or criminal penalties therefor, or such occupancy is in violation of contracts with governmental agencies.” Petitioner contends that Respondent Stefan Navedo Perez’s occupancy of the basement/cellar apartment is unlawful because “[t]he landlord retained an architect, who advised the landlord that the use of the apartment is illegal, and not approvable by the New York City Department of Buildings. The apartment cannot be legalized.” Petitioner does not dispute that Respondent is the tenant of record in a housing accommodation within a rent-stabilized 14-unit building, nor does it allege that any governmental agency has issued a violation or imposed civil or criminal penalties based on Respondent’s occupancy. In moving for summary judgment, Respondent, who has lived in his apartment for over five years, cites to Appellate Term case law in the First Department concluding that a holdover under RSC §2524.3 (c) must be predicated on proof of a governmental violation or other showing that the owner is “subject to criminal or civil penalties.” Petitioner opposes the motion, arguing that the phrase “subject to” according to the dictionary definition includes “affected by the or possibly affected by [something].” Thus, according to Petitioner even the potential for civil penalties because of Respondent’s use of the basement is a sufficient basis for an illegal occupancy holdover. Petitioner cross-moves for summary judgment, attaching a report from its architect, who states that “[w]ithout further code investigation, it is evident that this cellar apartment does not comply with the requirements of the MDL [Multiple Dwelling Law] and as such, this apartment cannot be legalized.” Contrary to Petitioner’s interpretation of the Code, the Appellate Term in the First Department has repeatedly held that the plain meaning of the phrase “subject to civil or criminal penalties” in RSC §2524.3(c) requires that the owner is “actually ‘subject to civil or criminal penalties.’” (210 W. 94 LLC v. Concepcion, 2003 NY Slip Op 50612 [App Term, 1st Dept 2003]). Accordingly, where a governmental agency has not imposed a violation or otherwise sought criminal or civil penalties, an illegal occupancy holdover must be dismissed as premature (see id.; JMW 75 LLC v. Wielaard, 47 Misc 3d 133 [App Term, 1st Dept 2015]; 625 W. End, Inc. v. Howard, 2001 NY Slip Op 40496 [App Term, 1st Dept 2001]). In the absence of a decision by the Second Department as to the conditions precedent for maintenance of a proceeding under RSC §2524.3(c) (see 321 Bay Ridge Co. v. Cordova, 130 NYS3d 187 [App Term 2d Dept, 2d, 11th & 13th Jud Dists 2020]), Appellate Term decisions in the First Department, while not binding on this court, are entitled to “great deference” (People v. Pena, 36 N.Y.3d 978 at fn4 [2020] [Wilson, J. dissenting], quoting People v. Pestana, 195 Misc. 2d 833, 839 [Crim Ct, NY Co 2003]). One such holding, 625 W. End, Inc. v. Howard, is particularly apropos, as it concluded, in dismissing an illegal occupancy holdover seeking recovery of an unpermitted basement space due in part to the lack of a governmental violation, that: [A]ny violation of the Multiple Dwelling Law with respect to occupancy of the basement is not a basis for eviction…in the absence of any application to the Department for a permit or the Department’s rejection of plans for legalization (see, Sima Realty LLC v. Philips, 282 A.D.2d 394, 724 N.Y.S.2d 51). This is not a case where a violation has been issued and the Department has rejected a building application to cure the violation (cf., Hornfeld v. Gaare, 130 A.D.2d 398, 515 N.Y.S.2d 258). 2001 NY Slip Op 40496 at *3 [App Term, 1st Dept 2001]). In other words, even where a violation has been placed the determination as to whether an apartment may be legalized should be made by the administrative agency with the “primary jurisdiction and the necessary expertise to consider the issue in the first instance” (Weissman v. New York, 96 AD2d 454 [1st Dept 1983]). Exhaustion of administrative remedies is particularly appropriate here given the remedial purpose of the Rent Stabilization Law in “preserv[in] affordable housing for low-income, working poor and middle class residents in New York City” (Matter of Santiago-Monteverde, 24 NY3d 283, 289 [2014]), rendering an eviction based on unlawful use a “last resort that can be used only when an apartment cannot be safely or lawfully occupied” (Cadim Stonehenge LLC v. Gekht, NYLJ 7/14/99, p.5, col. 2 [Civ Ct, NY Co 1999]). In the present case, it is undisputed that Petitioner is not actually subject to civil penalties, and no governmental violation has been placed based on Respondent’s occupancy. Furthermore, while Petitioner has retained an architect who has concluded that in the absence of “further code investigation” the unit cannot be legalized, Petitioner has not submitted plans to the Department of Buildings seeking legalization of the apartment, let alone received a negative determination. Under these circumstances, the Petition must be dismissed as premature. Accordingly, for the foregoing reasons Respondent’s motion for summary judgment is granted and a judgment of dismissal is awarded in favor of Respondent. Petitioner’s crossmotion is denied as moot. This constitutes the decision and order of the court. Dated: December 6, 2023
