ATM TWO v. Ramos

Wolfson & Grossman, Westbury, for petitioner. Feldherr & Feldherr, Westbury, for respondents.

OPINION OF THE COURT

KENNETH L. GARTNER, J. This decision, reached after trial without jury, significantly giving the tenant a new opportunity to execute the offer. Both courts held that no such additional notice is required. Recent amendments of the Emergency Tenant Protection Regulations, 9 NYCRR 2503.5 (b) (2) and (3), provide:

"(2) Where the tenant fails to timely renew an expiring lease or rental agreement offered pursuant to this section, and remains in occupancy after expiration of the lease, such lease or rental agreement may be deemed to have been renewed upon the same terms and conditions, at the legal regulated rent, together with any guidelines adjustments that would have been applicable had the offer of a renewal lease been timely accepted. The effective date of the rent adjustment under the deemed renewal lease shall commence on the first rent payment date occurring no less than 90 days after such offer is made by the owner.

"(3) Notwithstanding the provisions of paragraph (2) of this subdivision, an owner may elect to commence an action or proceeding to recover possession of a housing accommodation in a court of competent jurisdiction * * * where the tenant, upon the expiration of the existing lease or rental agreement, fails to timely renew such lease in the manner prescribed by this section."

In ATM Four v Ramos (188 Misc 2d 310, 313 [Dist Ct, Nassau County 2001]), the court interpreted Conlon (supra) as standing for the proposition that absent the new amendments a court was without discretion to address a situation such as that at bar, because "a tenant's failure or refusal to accept an order of a renewal lease within the time period specified by law is not, by its nature, curable." The court further interpreted 9 NYCRR 2503.5 (b) (2) as in effect administratively reversing Conlon, and establishing the proposition that "a default occasioned by a tenant's failure to timely renew a lease, can be effectively cured where the tenant remains in occupancy and continues to pay the applicable rent." (At 313.) In fact, this court agrees with the ATM Four decision's "bottom line," but respectfully differs with the ATM Four decision on both counts of its rationale. When 9 NYCRR 2503.5 (b) (2) is viewed together with 9 NYCRR 2503.5 (b) (3) rather than in isolation, it is evident that the two new regulations do not at all address the situations under which a court can deem a tenant's failure to timely execute and return a renewal offer to be "cured" or "excused." Rather, these two new provisions expand the options available to a landlord, at the landlord's sole election. These new regulations provide a landlord with the option in such a situation to either deem the lease as having been renewed at the new increased rent, and to bill and collect that rent; or to treat the lease as having been terminated, and to seek to evict the tenant as a holdover. Previously, without a signed agreement to the contrary by the tenant, the landlord could only collect the rent at the old rate, thus in effect converting the tenant to a month-to-month tenant at that rate; or seek eviction as a holdover, in which event nothing at all could be collected until a court proceeding was initiated, and then "use and occupancy" could be accepted at only the lower old rate. The preamendment situation was disadvantageous to both landlords and tenants, since by limiting the landlord's options it virtually forced the institution of litigation, and at the same time it deprived landlords, for what could be extended periods, of rent increases. 9 NYCRR 2503.5 (b) (2) thus does not administratively overrule Conlon and Ruderman. Nevertheless, as seen from the analysis above, Conlon's and Ruderman's own significance is limited. The law provides a reviewing court with ample discretion to address an appropriate equitable situation. In the instant case, where Dennis Ramos put forth sufficient evidence to rebut the usual presumption of receipt upon mailing; where (as in the Hochstadt and Farchester cases) he actually spoke to a representative of the landlord during the 60-day period for renewal and expressed a desire to remain at whatever rent was required; and where despite this contact, the lease renewal offer which had been returned to the landlord as "unclaimed" was not mentioned or turned over to him, all the conditions have been met for the tenant's failure to be excused, and for the tenant to be entitled to a permanent "stay" of any judgment and warrant for purpose of executing a renewal.