ATM THREE, LLC v. CANAS

Wednesday, February 20, 2002

District Court

Nassau County

Judge Gartner

ATM THREE, LLC v. CANAS ” The instant summary holdover proceeding presents what even the petitioner concedes is a “ tough issue:” whether a husband and wife, tenants of a rent stabilized apartment in Freeport, New York, can have their lease terminated and be evicted for violation of maximum occupancy provisions contained in both their lease and a statute, not because they have brought in friends, relatives, subtenants or guests, but solely because they had a second child. Determination of this issue involves a careful balancing of important, but in this instance conflicting, public policies. Those policies are, on the one hand, the policy against discrimination based on family size; and on the other, the policy giving deference to the traditional police power of local government.

A one day trial was held. The parties’ lease provides, inter alia, that “[t]he Apartment is subject to limits on the number of people who may legally occupy an Apartment of this size.” Section 128-20(A) of the Village of Freeport Code (“Housing Standards”), provides, inter alia, “[n]o dwelling unit shall be occupied by more persons than twice the number of living rooms in the dwelling unit less one …”

The unit in question was shown to have two “living rooms,” i.e., a bedroom and living room/dining area (bathrooms and kitchens being excluded by the Code from the definition of “living rooms”). Thus, the maximum occupancy of the apartment under the Code is three persons.

The respondent couple originally moved into the premises over four years ago, at which time they had one three year old daughter. They now have a second daughter, approximately two years of age.

The respondents were, pursuant to regulations promulgated under the Emergency Tenant Protection Act of 1974, regularly offered, and accepted, renewal leases. At least two have been offered and signed since the birth of the respondents’ second daughter. The most recent renewal lease has a term ending in approximately one year.

Approximately two and a half months ago, the respondents were served with a notice that their continued occupancy of the premises with both of their daughters violated paragraph I of their lease, and was a substantial violation of the lease. The notice provided that if the respondents did not cure within the ten days afforded to them, their lease would terminate ten days thereafter. They obviously did not and could not cure. The landlord now brings the instant petition seeking to evict them.

The closest case to the instant factual scenario is Diaz v. Perez-Tamayo, 598 A.2d 947 (N.J. 1991). There, too, a husband and wife and one child rented an apartment, and then had a second child. No statute was there involved, but the occupancy by four persons violated the apartment building’s rules and regulations, by which the tenants in their lease had agreed to abide. As in the instant case, notice to cure and, subsequently, of termination was given. In refusing to grant the eviction, the New Jersey court held, 598 A.2d at 948 (emphasis in original), that, “[t]echnically, the rule limiting the number of occupants has been violated. But a family cannot be limited to any particular size. House rules cannot restrict a family from having children. This is not a substantial violation. Even though a rule or regulation limits the occupancy of a residential unit, tenants are not bound to that limitation when the family unit is increased by natural means.” Accord, 61 Jane Street Associates v. Kroll, 102 A.D.2d 751 (1st Dep’t 1984) (Even if presence of the spouses of persons permitted to occupy apartment as “immediate family members” of named tenant, pursuant to Real Property Law ?§235-f, constituted violation of occupancy laws, “their presence in the apartment can scarcely be deemed a substantial violation.”).

In addition, Real Property Law ?§237 makes it illegal to have a clause in a lease “providing that during the term thereof the tenants shall remain childless or shall not bear children …” This provision has been said to embody the public policy of this state. Boyd H. Wood Co. v. Finkelstein, 193 Misc. 315 (Sup. Ct., Kings Co. 1948). See also, 18 N.Y. Jur.2d, Civil Rights ?§99 (1999) (“[A] clause in a lease … providing that during the term thereof the tenants shall remain childless or should not bear children is also strictly prohibited.”). Yet this would appear to be the effect of the clause relied upon by the landlord when applied to these tenants under these circumstances.

Under these authorities, it would seem that the petition here should be summarily denied.

Another potential basis for denying the eviction would be the observation made by the court in 459 West 43rd Street Corp. v. Korn, 139 Misc.2d 856, 858 fn. 2 (Civ. Ct., N.Y. Co. 1988), that, “[g]iven that the [maximum occupancy] law was intended as a shield to protect tenants from unscrupulous landlords, and not as a sword for landlords to use to evict tenants, the use of this law to commence holdover proceedings where no violation has been placed against the premises has been criticized.” Accord, Sunset Park Development Corp. v. Hickerson, N.Y. Law Journal, October 8, 1998, at 27, col. 2, (Civ. Ct., Kings Co.).

This suggested result, however ” as well as that of the previously cited authority ” apparently did not consider the potential alternative functions of, and public policy underlying, maximum occupancy statutes and lease provisions.

It may be true that these provisions arose in part “to prevent practices common earlier in the [twentieth] century, when landlords overcrowded cramped tenements and rooming houses with large numbers of tenants.” Kalimian v. Olson, 130 Misc.2d 861, 862 (Sup. Ct., N.Y. Co. 1986) (Evans, J.). However, these provisions, by preventing such practices, do not merely safeguard the tenants from exploitation.

The landlord here urges that these provisions protect the health and welfare of nearby residents by avoiding the overtaxing of municipal services. They have been recognized as also protecting the interests of landlords in preventing the risk of increased wear, tear and damages to premises which overcrowding can cause. See, Reeves v. Rose, 108 F.Supp.2d 720, 728 (E.D. Mich. 2000); Snyder v. Barry Realty, Inc., 953 F.Supp. 217, 222 (N.D. Ill. 1996). Maximum occupancy provisions could additionally safeguard the life and well-being of the tenants themselves, from the physical dangers that could arise in the event of a fire or other emergency. See, Sandlfow Realty Corporation v. Diaz, 64 Misc.2d 625, 627-628 (Civ. Ct., N.Y. Co. 1970) affd, 66 Misc.2d 830 (App. Term, 1st Dep’t 1971). This latter protection is one which individuals may not have the authority to so easily waive, either on behalf of themselves, or on behalf of minor children.

In Hall v. Coons, 151 Misc.2d 715 (Sup. Ct., Dutchess Co. 1992), a maximum occupancy rule was stricken, and the existence of underlying public policy to support the rule was derided as being nothing more than the “conclusory statement of defendants’ attorney.” However, an underlying public policy supporting such restrictions is evidenced by the federal Fair Housing Act, 42 U.S.C. ?§3601, et seq. The FHA outlaws discrimination based on “familial status,” 42 U.S.C. ?§3604(b) (interpreted to include “family size”), but specifically exempts from its antidiscrimination provisions “any reasonable local, state or Federal restrictions regarding the maximum number of occupants permitted to occupy a dwelling.” 42 U.S.C. ?§3607(b)(1). In City of Edmonds v. Oxford House, Inc., 514 U.S. 725, 735 fn. 9 (1995), the United States Supreme Court observed that, “[t]he provision making it illegal to discriminate in housing against families with children under the age of 18 prompted fears that landlords would be forced to allow large families to crowd into small housing units … Section 3607(b)(1) makes it plain that, pursuant to local prescriptions on maximum occupancy, landlords legitimately may refuse to stuff large families into small quarters.” The Supreme Court concluded that maximum occupancy restrictions were characterized by a concern for “community health and safety.” 514 U.S. at 731-734. As stated in Fair Housing Advocates Association, Inc. v. City of Richmond Heights, Ohio, 209 F.3d 626, 638 (6th Cir. 2000) (Batchelder, J., concurring), “[h]ealth and safety concerns are at the very heart of local police powers, and our respect for ordinances controlling uses of land for these reasons extends far back into our jurisprudence.”

It has been held that under the FHA a “bedrooms plus one” maximum occupancy restriction similar to the restriction presented here does have a disparate impact on families with more than one child sufficient to make out a claim for discrimination under the FHA. Snyder v. Barry Realty, Inc., supra, 953 F.Supp. at 220. However, this simply puts upon a party seeking a ?§3607(b)(1) exemption the burden of demonstrating that the maximum occupancy restriction is “reasonable.” Fair Housing Advocates Association, Inc., supra, 209 F.3d at 633-634. This burden is met by showing that the statute applies (as does the instant one) uniformly to all residents and not just to children, was enacted to protect health and safety, and was within the range of options customarily available to municipalities. A two-person-per-bedroom standard less generous than that at issue here has specifically been held to meet this standard. Id., at 636.

In any event, no FHA claim is before this Court. The statute at issue enjoys the traditional presumption of validity for the purposes of this proceeding. See, New York State Society of Enrolled Agents v. New York State Division of Tax Appeals, 161 A.D.2d 1, 8 (2d Dep’t 1990); Peconic Avenue Businessmen’s Ass’n v. Town of Brookhaven, 98 A.D.2d 772, 773 (2d Dep’t 1983); People v. Bove, 156 Misc.2d 469, 475 (Just. Ct., Westbury 1992) (Liotti, J.). See also, Fair Housing Advocates Association, Inc., v. City of Richmond Heights, Ohio, supra, 209 F.3d at 638-644 (Batchelder, J., concurring) (observing that traditional jurisprudence would place a heavy burden on a party seeking to overcome a maximum occupancy statute’s presumption of validity, and disagreeing with even the limited deviation from this traditional jurisprudence which the majority in that case interpreted the FHA as requiring).

The cited FHA cases did not involve threatened evictions, or situations in which family units had only incrementally “increased by natural means.” Diaz v. Perez-Tamayo, supra, 598 A.D.2d at 948. Either of these factors may be crucial to ultimate resolution of this issue. Nevertheless, in light of the public policy underlying maximum occupancy restrictions, this Court is unwilling to deny enforcement of a lease provision incorporating such restrictions quite as readily as some prior authority might suggest should be the case.

In Kalimian v. Olson, supra, 130 Misc.2d 861, the tenant rented a Manhattan studio apartment, and thereafter continuously resided there under a succession of renewal leases. Sometime after leasing the premises, she gave birth to a daughter. Thereafter, a new landlord purchased the building. The new landlord, too, entered into renewal leases with the tenant. When the daughter was twelve years old, the landlord suddenly asserted a violation of a maximum occupancy provision of the New York City Administrative Code. Judge Evans noted that “[i]t is the owner, not the tenant, who is in a better position to know both the arcane requirements of the Administrative Code and their application to each specific apartment.” 130 Misc.2d at 863. Dismissing the landlord’s ejectment action, Judge Evans held, 130 Misc.2d at 867, “[t]he landlord must be estopped from asserting that the tenant caused the alleged violation. Not only did he have actual or constructive notice of the occupancy before having executed the renewal lease, his execution of the lease reasonably caused the tenant to rely on the landlord’s implicit representation that the occupancy was legal.”

In the instant case, the landlord itself presented the testimony of the landlord’s superintendent. The superintendent testified that he was at all times fully aware of the tenant wife’s pregnancy and childbirth, and of the subsequent occupancy of the apartment by the tenants’ new infant daughter.

Moreover, in Kalimian the court noted that it was not claimed “that the defendant’s occupancy poses a danger to safety or health…”, 130 Misc.2d at 863. Proof of such a danger ” a specific danger, and not merely the general police power concerns underlying maximum occupancy statutes ” could potentially override the waiver and estoppel doctrines otherwise controlling. Here, however, as in Kalimian, none has been alleged or any proof of such offered.

Under the circumstances, and on the facts of this case, the landlord is estopped from terminating the tenant’s lease.

The petition is denied.

So Ordered.