Judge Bruce Scheckowitz
Landlord Riverdale Osborne Towers Housing Associates sought to regain possession of the subject premises from the Keaton tenants in this holdover action. They argued the Keatons violated their lease and HUD regulations by operating a daycare at the premises. The parties entered into a stipulation of settlement which tenants represented that while the premises was used as a daycare, it was only an incidental business generating incidental income. Riverdale sought to restore the proceeding to the calendar for a judgment and warrant against tenants arguing they violated the stipulation as the daycare center constituted tenants' primary source of income. Tenants claimed they have not breached the stipulation as the term "incidental business" as written in the stipulation and HUD Handbook implies that the operation of the business was incidental to the tenants' use of the apartment as their primary residence, as here. The court agreed noting HUD regulations permitted members of a household to engage in legal profit-making activities if they were incidental to the primary use of the unit for residence by family members. Thus, it stated it would preserve the long-term tenancy, denying landlord's motion with prejudice.
