245 Realty Associates v. Sussis

Andrias, J. (dissenting).

I dissent and would affirm.

Respondent’s successful defense of his right, as a successor *37family member, to be named as the tenant on a renewal lease for the subject rent-stabilized apartment does not entitle him to recover attorneys’ fees under Real Property Law § 234. Respondent’s right to be offered a renewal lease for the apartment derives from the Rent Stabilization Code (9 NYCRR 2523.5 [b] [1]), not the terms of the expired lease, and, as the unanimous Appellate Term explained, respondent did not become a “tenant”, as defined by the Code (9 NYCRR 2520.6 [d]), until his status as successor family member was adjudicated in this very proceeding. I also agree with the Appellate Term that Matter of Duell v Condon (84 NY2d 773) is distinguishable in view of rent control’s different, and much broader, definition of “tenant” (Administrative Code of City of NY § 26-403 [m]).

The majority concludes that the occupant’s statutory right to enter the renewal lease as a tenant relates back to the date creating his statutory rights (i.e., his brother’s death). That right, it states, corresponds with the occupant’s obligation to pay rent, also arising at that time, and such right and obligation were extant prior to the resolution of the holdover proceeding.

Such reasoning is contrary to this Court’s decision in Hughes v Lenox Hill Hosp. (226 AD2d 4, lv dismissed 90 NY2d 829) and the majority’s attempt to distinguish that case on its facts is unpersuasive. The plaintiff there also argued that operation of 9 NYCRR 2523.5 (b) (1) is automatic upon the death of the named tenant.

This Court (per Rubin, J.) disagreed, stating: “Under the regulation, a family member is ‘entitled to be named as a tenant on the renewal lease’ only ‘if an offer is made to the tenant’ to renew the lease * * * Had the intent been to immediately install the family member as tenant of record, the regulation would doubtless provide for transfer of the leasehold upon the named tenant’s permanent removal from the premises. It would have been a simple matter to have worded the provision to recite that the family member ‘shall’ be named as the tenant on the renewal lease and not merely that he ‘shall be entitled to be named’ as such” (supra, at 14 [citations omitted]).

Unlike rent control, where a successor statutory tenant is entitled to attorneys’ fees pursuant to Real Property Law § 234 even if not a signatory to the lease, the denial of attorneys’ fees to a prevailing successor such as plaintiff is “premised upon the contractual nature of the rent stabilization scheme, which more narrowly defines the term ‘tenant’ as persons named on a *38lease as lessees” (Classic Props, v Martinez, 173 Misc 2d 556, 557 [emphasis in original]).

Contrary to the majority’s holding, and as recognized by this Court in Hughes v Lenox Hill Hosp. (supra, at 18), upon the death of a tenant “ ‘the leasehold interest passes as personal property to the estate * * * which remains liable for the payment of rent’ * * * [and] ‘an executor has the right, until the expiration of the lease, to possession of the demised premises in his capacity as representative of the deceased tenant’s estate’ ” (quoting Joint Props. Owners v Deri, 113 AD2d 691, 693-694 [Sullivan, J.] [citations omitted]).

The majority’s statement that it takes no position on the line of cases relied upon by the Appellate Term and its attempt to distinguish this case from them by virtue of paragraph 32 of the lease, as well as its reliance upon paragraphs 20 and 32 of the lease and its assertion that respondent is a successor-in-interest “by operation of paragraph 32 of the lease”, are likewise unavailing. The reason that the Court of Appeals declined to rule on the validity of those cases in Matter of Duell v Condon (supra, at 782) was that those cases involve rent stabilization whereas Duell involved rent control. Moreover, paragraphs 20 and 32 merely provide that the agreements in the lease, including the right to attorneys’ fees pursuant to Real Property Law § 234, become binding upon “those who succeed to the interest of Owner or You [tenant] by law” (emphasis added). However, a qualifying family member succeeds to the interest of the deceased tenant of record only upon signing the renewal lease, whether pursuant to court order or otherwise.

The majority’s assertion that respondent is a successor-in-interest “by operation of paragraph 32 of the lease” is not only unsupported by law or reason, it is seemingly contradicted by its later statement that respondent’s right “created by statute and ratified by the court, to be offered the lease makes the occupant a successor-in-interest to the tenant, and that this successor status relates back to the time of death of the tenant of record.” Respondent’s right, if any, to succeed to the deceased tenant’s interests in the subject apartment clearly derives from the applicable provisions of the Rent Stabilization Code and not from the terms of the lease.

Even if the lease did not contain paragraph 32, petitioner landlord was required to offer the identical lease, including the reciprocal right to. attorneys’ fees, to any qualifying family member seeking a renewal lease. The option of forfeiting his or her rights or rejecting the renewal lease offered and vacating *39the premises is always available to such qualifying family member. Further buttressing the conclusion that any right respondent had to a renewal lease was inchoate at the time of the tenant’s death is the requirement of Rent Stabilization Code § 2523.5 (e) that, where, as here, an owner has not been advised of the name of any family member residing in the tenant’s household, any such person claiming succession rights has “the affirmative obligation to establish such right” (emphasis added).

Moreover, mutuality of obligation for attorneys’ fees is not established merely by the fact that the estate and the successful successor are joined in the same proceeding. Just as the qualifying family member was not liable for payment of rent until he signed the renewal lease, neither would he have been liable for attorneys’ fees in the event he were unsuccessful. Even if petitioner owner were awarded attorneys’ fees against the estate, which proved uncollectible, it would be unable to recover them from the potentially qualifying family member.

Wallace, J. P., Rubin and Williams, JJ., concur with Tom, J.; Andelas, J., dissents in a separate opinion.

Order, Appellate Term, Supreme Court, First Department, entered November 29, 1996, which affirmed an order of the Civil Court of the City of New York, New York County, entered on or about November 21, 1995, reversed, on the law and the facts, with costs, the motion for attorneys’ fees granted, and the matter remanded for proceedings to determine the amount.