| Oxford Towers Co., LLC v Wagner |
| 2009 NY Slip Op 00029 [58 AD3d 422] |
| January 6, 2009 |
| Appellate Division, First Department |
| Oxford Towers Co., LLC,Appellant-Respondent, v Claudia Wagner et al.,Respondents-Appellants. |
—[*1] Hartman, Ule, Rose & Ratner, LLP, New York (David Ratner of counsel), forrespondents-appellants.
Order and judgment (one paper), Supreme Court, New York County (Leland G. DeGrasse,J.), entered July 16, 2007, which, insofar as appealed from, granted defendants' motion todismiss the complaint pursuant to CPLR 3211, denied plaintiff's cross motion for summaryjudgment, and denied defendants' request for attorneys' fees, unanimously modified, on the law,to deny defendants' motion to dismiss the fourth cause of action (for use and occupancy) and todirect defendants, within 20 days of service of a copy of this order with notice of entry, to post abond in the amount of $46,270.65 as security for their potential liability for past use andoccupancy (at the rate of $3,084.71 per month during the 15-month period from May 1, 2006 toJuly 16, 2007) and, prospectively, to pay use and occupancy for months beginning after the dateof this order at the rate of $3,084.71 per month, all without prejudice to the amount of use andoccupancy that may ultimately be awarded, and otherwise affirmed, without costs.
The September 1995 agreement that plaintiff landlord seeks to rescind in this actioncommenced in May 2006 provides that "in the event that [the] Rent Stabilization law. . . becomes inapplicable to the apartment or the [defendants] Tenants, [plaintiff]. . . will nevertheless, at the expiration of each lease, offer [defendants] a two-yearrenewal lease at the rent increase permitted for a two-year renewal under the Rent Stabilizationlaw," but in no event shall such increase be less than 5% or greater than 10% over the rent paidin the expiring lease. In 1999, the Division of Housing and Community Renewal grantedplaintiff's petition for high income rent deregulation. Subsequently, starting in 2000, the partiesentered into several two-year lease renewals that referred to the 1995 agreement. Plaintiff nowchallenges that agreement as "an effort to preclude in perpetuity the application of the thennewly-enacted high rent/high income deregulation amendment to the Rent Stabilization Code."
We reject plaintiff's argument that the 1995 agreement is void ab initio as against publicpolicy and that the six-year statute of limitations that would otherwise bar its rescission andrelated declaratory causes of action is therefore inapplicable. Unlike the cases cited by plaintiff(Drucker v Mauro, 30 AD3d37 [2006], appeal [*2]dismissed 7 NY3d 844[2006]; Georgia Props., Inc. vDalsimer, 39 AD3d 332 [2007]), here the parties did not deregulate the apartment byprivate agreement. Nor is the agreement void by reason of its offer of renewal leases andreference to the Rent Stabilization Law's rent increase guidelines (see Matter of Carrano v Castro, 44AD3d 1038 [2007]).
Plaintiff's claim for use and occupancy, however, is not time-barred. Defendants have noright to continue to occupy the apartment rent-free (see Levinson v 390 W. End Assoc., L.L.C., 22 AD3d 397, 403[2005]). Under the last lease in effect between the parties, the rent was $3,084.71 per month.Defendants must continue to pay this amount pendente lite and also post a bond to cover past useand occupancy from May 1, 2006 (the date on which they stopped paying rent) through July 16,2007 (the date on which the order appealed from was entered) (see id. at 402). Under theparties' 1995 agreement, the actual rent owed by defendants will be higher; the record, however,does not contain sufficient information to allow that calculation.
The motion court properly denied defendants' request for attorneys' fees. Paragraph 23 (D)(3) of the lease, on which defendants rely, provides that in the event the lease is cancelled, thelandlord may re-rent the apartment, and any such new rent received "shall be used first to payLandlord's expenses . . . [which] expenses include the costs of getting possessionand re-renting the Apartment, including . . . reasonable legal fees." This is not thetype of provision covered by Real Property Law § 234. Furthermore, the action arises outof the 1995 agreement, not the lease (cf. Peck v Wolf, 157 AD2d 535, 536 [1990], lvdenied 75 NY2d 709 [1990]). Concur—Saxe, J.P., Nardelli, Buckley, Moskowitz andRenwick, JJ.