State Realty, LLC v. Cotto

The following e-filed documents, listed by NYSCEF document number 40-66 (motion no. 2) were read on this motion for summary judgment. DECISION/ORDER This is a holdover summary eviction proceeding predicated on service of a 90-day notice of termination. The petition alleges that the apartment is unregulated because it is a cooperative unit and that the lease between the parties expired. No other “cause” for eviction is alleged in the petition or in the notice of termination. Although not alleged in the petition, the parties agree that Respondents Aaron Cotto and Vanessa Perez are “non-purchasing tenant[s]” protected from eviction under the Martin Act (General Business Law §352-eeee), by virtue of Petitioner’s status as the holder of unsold shares for the cooperative apartment (MMB Apartments, LLC v. Guerra, 45 Misc 3d 132[A], 2014 NY Slip Op 51662[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014], citing Geiser v. Moran, 189 Misc 2d 442 [App Term, 2d Dept, 2d & 11th Jud Dists 2001]). Petitioner has moved for summary judgment, alleging for the first time that the basis for the proceeding is Respondents’ failure to sign a renewal lease. Among the protections of the Martin Act is the prohibition on eviction except for one of the reasons listed in GBL §352-eeee(2)(c)(ii), including breach of the tenant’s “obligations to the owner of the dwelling unit or the shares allocated thereto.” Failure to sign a renewal lease with a rent increase that is not unconscionable is a breach of those obligations (MMB Apartments, LLC, 45 Misc 3d 132[A] at *1). Addressing its initial failure to include any allegations regarding Martin Act coverage in its termination notice and the petition, Petitioner argues that there is no requirement that the termination notice allege the apartment’s Martin Act coverage and that, citing Paikoff v. Harris (185 Misc 2d 372, 376 [App Term, 2d Dept, 2d & 11th Jud Dists 1999]), its initial failure to plead Martin Act coverage in the petition is not a basis for dismissal and that the petition can be sua sponte amended by the court. Although Paikoff no longer seems to be good law on these points (see Aero Mgt. v. Moghadasian, 74 Misc 3d 132[A], 2022 NY Slip Op 50154[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2022]; see also Henry v. Kingsberry, 66 Misc 3d 143[A], 2020 NY Slip Op 50175[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2020; Matter of Volunteers of Am.-Greater NY, Inc. v. Almonte, 17 Misc 3d 57 [App Term, 2d Dept, 2d & 11th Jud Dists 2007], affd 65 AD3d 1155 [2009]), the court need not reach those issues because the petition must be dismissed for defects in the notice of termination. Unlike for rent-stabilized and federally subsidized tenancies,1 there is no regulatory provision governing termination notices for unregulated tenancies or for tenancies covered by the Martin Act. However, that does not mean that the termination notice is sufficient if it fails to allege the facts on which termination is based. Petitioner’s notice must still comply with the requirements of Chinatown Apartments, Inc. v. Chu Cho Lam (51 NY2d 786 [1980]), which in effect mandate that a termination notice include facts to demonstrate that that termination is justified by the lease, laws, or regulations. Here, particularly where Respondents’ failure to sign a lease renewal is curable (see MMB Apartments, LLC, 45 Misc 3d 132[A] at *1), the failure to include any facts setting for the basis for termination in the notice is a fatal defect that cannot be cured (even if the petition were amended to include allegations that Respondents did not sign the renewal lease). Accordingly, it is ORDERED that Petitioner’s motion for summary judgment is denied; and it is further ORDERED that, upon searching the record and pursuant to CPLR 409(b), Respondents are granted judgment dismissing the petition; and it is further ORDERED that Respondent Aaron Cotto’s counterclaims are severed. This is the court’s decision and order. Dated: December 18, 2023