402 NOSTRAND AVENUE CORP v. SMITH (2008)

Appeal from a decision after trial of the Civil Court of the City of New York, Kings County (Bruce E. Scheckowitz, J.), dated July 17, 2006, deemed from the final judgment entered on the same date (see CPLR 5520[c] ).  The final judgment, after a nonjury trial, awarded landlord possession and the sum of $14,281.61 in a nonpayment summary proceeding.

Final judgment reversed without costs and matter remanded to the court below for entry of a final judgment in favor of landlord following a recalculation of the rents owed in accordance with the following memorandum.

In this nonpayment proceeding, landlord seeks to recover various monthly balances in rent arrears at the rate of $1,288.31 per month from March 2005, contending that this is the amount of the collectible monthly rent.   Landlord asserts that tenant's last lease, which was for the two years ending on November 30, 2004 and which provided for a monthly rent of $848.88, stated that the $848.88 was a preferential rent for two years and that the “true rent” was $1,314.08.   The lease submitted into evidence by landlord also stated:  “Landlord has option to charge correct rent when lease expires.”   In the lease submitted by tenants, this language was absent.   Landlord claims that it does not seek $1,314.08 because the registered rent was $1,288.31.   Landlord did not allege or prove that it offered tenants a renewal lease after the November 30, 2004 expiration of the last lease and that tenants refused to accept such a renewal offer.

 It was landlord's burden, in this nonpayment proceeding, to establish the existence of an agreement to pay the rent demanded (RPAPL 711 [2];  see e.g. 615 Nostrand Ave. Corp. v. Roach, 15 Misc.3d 1, 832 N.Y.S.2d 379 [App. Term, 2d & 11th Jud. Dists.2006];  Licht v. Moses, 11 Misc.3d 76, 813 N.Y.S.2d 849 [App. Term, 2d & 11th Jud. Dists.2006] ).   Landlord failed to meet this burden.   The limitation in the expired lease of the term of the rent preference to two years, the statement therein as to the amount of the “true” or legal regulated rent, and the statement that landlord had the “option” of charging the “correct” rent at the end of the lease (assuming landlord's version of the lease were to be deemed valid) did not constitute an agreement by tenants to pay any particular higher amount after the expiration of the lease, without the execution of a renewal lease in that amount (cf. Licht v. Moses, 11 Misc.3d at 78, 813 N.Y.S.2d 849).   Landlord was required to offer tenants such a renewal lease before it could deem the lease renewed at the higher amount (Rent Stabilization Code [9 NYCRR] § 2523.5[a], [c] ).  In the absence of proof of an agreement, deemed or actual, by tenants to pay a higher rent, it must be held that landlord's acceptance of tenants' rent payments, after the November 30, 2004 expiration of the lease, continued the tenancy at the rental set forth in the expired lease (Real Property Law § 232-c;  see City of New York v. Pennsylvania R.R. Co., 37 N.Y.2d 298, 372 N.Y.S.2d 56, 333 N.E.2d 361 [1975];  Farrell Lines, Inc. v. City of New York, 63 Misc.2d 542, 312 N.Y.S.2d 260 [1970], affd. on op. below 35 A.D.2d 788, 315 N.Y.S.2d 794 [1970], affd. 30 N.Y.2d 76, 330 N.Y.S.2d 358, 330 N.Y.S.2d 358 [1972] ).   Thus, landlord is only entitled to recover arrears in rent at the rate of $848.88.   Since the record before this court is insufficient to allow this court to determine the months for which rent is owed, and the amounts owed for each month, the final judgment is reversed and the matter remanded for entry of judgment in favor of landlord following a recalculation of the rents due at the rate of $848.88 per month.

We note that tenant's contentions that the rent demand and petition are defective because they demanded the higher amount, and that the proceeding must, as a consequence, be dismissed, is without merit.   The rent demand and petition permissibly set forth landlord's good-faith claim as to the rents due and the periods for which they were due (cf. ShopRite Supermarkets v. Yonkers Shopping Plaza, LLC, 29 A.D.3d 564, 817 N.Y.S.2d 291 [2006] ).   The fact that landlord did not entirely prevail on its claim does not provide a basis for invalidating the petition and rent demand and dismissing the proceeding (see Moore v. Coughlin, 127 App.Div. 810, 111 N.Y.S. 856 [1908];  John Washington, Ltd. v. Gulbreath, 171 Misc.2d 337, 660 N.Y.S.2d 104 [App. Term, 2d & 11th Jud. Dists.1997] ).