Articles Posted in Landlord and Tenant

convent-300x223Recently in the news is a decision in a lawsuit regarding the potential eviction of a defrocked nun in a Russian Orthodox convent located in Nanuet, New York.  This case is an interesting intersection of two areas of the law that our firm practices; namely, how the decisions of a religious organization can affect the disposition of real property, as well as the residents of said real property.

Prior blog posts have discussed how religious corporations must obtain approval from the New York State Attorney General in order to sell, lease, or mortgage real estate owned by the religious organization.  This often causes disputes where there are different factions within the religious organization, and these factions cannot agree on whether to sell real estate in order to relocate the place of worship.  As prior posts have discussed, courts are reluctant to intervene in disputes which are solely the result of disputes over religious doctrine.  However, disputes over control of a religious organization which can be resolved on the basis of neutral principles, that is, without second-guessing decisions made solely on the basis of theological grounds, may be resolved by the court.

The First Amendment to the United States Constitution generally forbids government involvement in religious disputes.  This principle also applies to the Courts, which are, in essence, instruments of the government, whether state or federal.  The lawsuit under discussion involves attempts to allow an ejectment action against a nun who was defrocked by her parent religious organization, the Russian Orthodox Convent Novo-Diveevo.  Our blog has previously discussed evictions against certain “non-traditional” tenants, such as licensees and invitees, who usually do not have written leases, but reside at certain properties.  The usual course of action in such matters is to serve a Notice to Quit, giving the tenant (often referred to as a licensee or invitee, depending on the specific situation) thirty days in which to vacate the premises.  If they do not vacate, the owner of the property can then either bring a petition for eviction in the local landlord-tenant court, or, in cases involving more complex issues, a civil action for ejectment in the Supreme Court in which the property is located.

eviction-300x220Our firm frequently handles eviction actions on behalf of both landlords and tenants.  In order to commence an eviction action, the tenant is served with a Notice of Petition and Petition.  These documents state the date, time and location of the Court in which to appear. One common occurrence is when a tenant fails to appear in Court for a scheduled hearing.  This post will address how such a situation is resolved.

Sometimes the tenant fails to appear at the hearing.  Whether it is because they did not actually receive the notice, cannot get to Court for health reasons, a failure to understand the nature of the proceedings, or otherwise, the Court will enter a default against the tenant.  What this means is that by failing to appear and present a defense, the landlord is entitled to receive the relief requested in their Petition.  Depending on the type of eviction proceeding, this relief will usually consist of a money judgment (in a non-payment proceeding) for the amount of rent claimed to be owed by the tenant, as well as a warrant of eviction.  The warrant is a legal document that allows the property owner to enlist a City Marshal or Sheriff (depending on where the property is located) to physically evict the tenant and remove his belongings from the premises.

Depending on the particular local court in which the action is brought, the Judge may sign these documents immediately or they may be submitted to the Court Clerk for the Judge’s signature at a future date.  Once the warrant is signed, the landlord will send it to the City Marshal or Sheriff to proceed with the eviction.   The tenant will then be served with a 72 hour notice, which states that the eviction will proceed in three days.

anchorNews outlets have recently reported that numerous Sears locations will be imminently closingOur readers are most likely aware that Toys R Us has closed all of its locations due to its bankruptcy filing.  Both Sears and Toys R Us would be considered anchor tenants by commercial landlords.  An anchor tenant leases a large square footage space or is of the nature of a large and influential company such as Starbucks or Apple.  Anchor tenants such as department stores and movie theaters draw customers to the mall or shopping center, so that the same customer continues to shop at the premises and patronize its other businesses.  Once an anchor tenant closes, the landlord should seek to locate another anchor tenant to fill the vacant space, so that the shopping mall will draw customers to the anchor location and benefit the other businesses in the mall by drawing shoppers.  This post will examine the provisions that a potential anchor tenant will ask its attorney  to have included in a lease.

Exclusive use can often be demanded by an anchor tenant.  Should Bed Bath and Beyond be the proposed tenant, it may require in its lease that the landlord may not lease another space in the shopping center to a tenant that sells home décor, bedding, kitchen equipment and the like, so as to minimize competition that may hinder its business.  Should the landlord violate such an exclusive use provision, the tenant’s lawyer may have negotiated a rent abatement and right to terminate the lease.  In addition, many anchor tenants present their own form of lease to the landlord, rather than sign the landlord’s version of the lease.

Signage is very important to anchor tenants.  Anchor tenant leases may include a provision that the anchor tenant must always be the first name on mall signage and be of the largest font size.  Visibility of signage is also important, so that the anchor store’s name is listed on internal building directories, directional signs throughout the mall and the like.

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Landlords who lease commercial space typically concern themselves with the quality of a proposed tenant so that such character is consistent with that of other tenants occupying the property.  Such concern is reflected in particular provisions found in a commercial lease.  This post will discuss some of the more common tenant “character” provisions.

Signage is important to commercial tenants so that the store’s location is visible and identifiable to potential customers.  Because landlords are concerned that certain signage may look physically unpleasing or be harmful to the reputation of the property, landlords typically specify signage requirements in the lease.  The landlord will reserve the right to approve the signage sought to be used by the tenant and will usually not allow a sign that appears to be too large or has too much neon compared to other signs already used at the property.  Of course, signs containing vulgar words will not be permitted.  When negotiating your lease, your attorney  should also negotiate an exhibit to the lease which will contain a drawing of exactly how your sign will look with specific dimensions referenced.  That way, the parties will have already decided on the approved signage before the lease is signed.

Landlords also want to control store hours.  Many leases have provisions to that effect.  In a shopping mall environment, most leases will require stores to be open for the same number of hours.  Such a provision benefits all tenants, as the mall is more likely to be a thriving place in which to do business if shoppers can visit more than one store.  On the flip side, landlords may demand that a public storefront be closed after a certain hour so that visitors do not “hang out”, impairing the reputation of the property or creating too much noise, impacting neighbors of the property.

sublet-300x232Previous blog posts have discussed potential cooperative rule violations and the procedures to be followed by the co-op when a shareholder violates provisions of the proprietary lease or the house rules.  This post will discuss more specifically the issues which arise when a shareholder attempts to sublet their co-op apartment to another person.

It first should be noted that most co-ops have in their proprietary leases specific rules about who can live in the apartment, if they are not the shareholder listed as an owner on the share certificate.  It is usually limited to direct relatives, such as one’s spouse, children, parents, domestic partner, and the like.  Having these people live in the apartment at the same time as the shareholder is not considered a sublet situation.  However, the proprietary lease usually also has rules limiting usage.  The shareholder must also be living at the apartment, together with the relatives in or guests question.

To give an example, let’s say the shareholder is elderly and shares the apartment with her adult son.  She then decides to move to Florida and wishes for her son to continue living in the apartment in New York.  This would most likely be considered a violation of the proprietary lease by the co-op, as the shareholder is no longer living at the unit.  Such a violation, if discovered by the co-op, could result in a default notice being issued to the shareholder for having unauthorized persons residing at the apartment.  Note again that if the shareholder is living at the unit at the same time with her family, it would probably not be considered a violation.  The reasoning behind this is that the co-op wants their units to be owner-occupied and to approve those occupying the apartment.  They will allow direct family members to share the unit, but only when the owner is also living there.

building-300x225Many of our prior blog posts have discussed foreclosures of real property.  But what happens when the owner of a cooperative or “co-op” apartment cannot pay his share loan or maintenance?  Although the term “foreclosure” generally applies to the taking of real property by a lienholder, a co-op owner does not own real property, but owns shares in the cooperative corporation which have been allocated to his apartment within a larger building.

A co-op owner is issued a share certificate, which states how many shares he owns, as well as listing the name of the co-op corporation, the address, and the specific apartment number. He is also issued a proprietary lease by the co-op, which allows occupancy of a particular unit and states the terms and conditions of his share ownership.  When taking out a share loan to purchase the co-op, the buyer/owner must pledge his shares as collateral for the loan.  The actual share certificate and proprietary lease must be physically delivered to the lender (or its legal representative) at the closing, to be held as collateral until the loan is paid in full.

However, there may be situations where an owner cannot make his share loan payments, and the lender seeks take permanent possession of the collateral, which is the share certificate.  In New York, this is known as non-judicial foreclosure.  This means that an action is not brought in Supreme Court, where real property foreclosure actions are generally commenced.  Instead, the foreclosing lender must bring a proceeding outside of the Court system.  This is usually done by sending default and termination notices to the borrower.  If the borrower does not cure the default within a given amount of time, then the lender can notice a public sale of the shares pursuant to New York’s Uniform Commercial Code, Article 9.  This law sets forth the terms and conditions under which a non-judicial sale of the shares can be held.  Assuming that notice has been properly given, there may be an auction sale of the shares, in which any party can submit a bid.  The high bidder, which is usually the lender, then takes possession of the shares in question.  It should be noted that the co-op board must approve any actual occupant of the apartment, even if the apartment is owned by another party subsequent to the auction sale.

landlord-tenant-disputes-300x194A recent article in the New York Times discusses a large-scale study of evictions in the United States.  More than 83 million records were studied, and the impact on the our society as a whole was further examined.  Our law firm is a rarity in that we represent both landlords as well as tenants in eviction matters (of course, not in the same case!).  Most private law firms specialize in representing only landlords.  As a result, their clients tend to be owners of large properties, or corporations who own many buildings.  They do their work in bulk, often bringing many cases at once, and seeking to resolve them during court appearances en masse with the tenants who appear.

Tenants seeking proper legal representation may have fewer options.  They will have to seek out private law firms, such as ours, which represents both landlords and tenants.  As the New York Times article discusses, many tenants do not have the means to obtain legal representation in eviction cases.  They are faced with the prospect of a Court appearance where the landlord is often represented by experienced counsel who knows all the aspects of the legal system.

As a result of this imbalance, many Courts attempt to assist the tenants during their appearances.  Of course, legally, Judges must be neutral in their application of justice.  They may advise unrepresented tenants to obtain legal counsel and allow the appearance to be adjourned in order for the tenant to retain an attorney.  They may also ask the tenants whether they understand the legal proceedings, and review with the parties the details of any settlement agreement entered into between themselves and counsel for the landlord.  Our experience has been that the Judges, especially those in Westchester County, have on the whole been fair and impartial to both sides in these cases.

squatter-300x200A recent article in the New York Post discusses a 61 year old man who had refused to move out of his Hunter College dorm room, where he had lived for the past 38 years.  Obviously, this is not the ordinary landlord-tenant matter, in which a tenant has a written lease with their landlord, and the rights and obligations of the parties are clearly defined.  Although most eviction matters involve a landlord-tenant relationship, there are certain situations which involve a different legal framework, which will be discussed in this blog post.

The first type of unconventional situation is that of a licensee.  A licensee is a person who is given permission to live at the premises by the owner of the premises.  Usually, the licensee is not paying rent.  One example would be an unmarried couple, where one person is the sole owner of the property.  The other person moves into the premises with the consent and permission of the owner.  After some time passes, the couple may develop relationship problems, and decide to split up.  What happens if the licensee refuses to move out of the premises at that point?

In order to evict the licensee, a special proceeding must be commenced, usually in the local landlord-tenant Court, under Real Action Property and Proceedings Law, Section 713(7).  This section of the law covers eviction proceedings where no landlord-tenant relationship exists.  The first step would be for the property owner to revoke their permission for the licensee to live at the premises.  We would recommend this be done in writing, with experienced counsel preparing the necessary documents.  Once the notice of termination has been given, the licensee has ten days to vacate the premises.  If they fail to do so, an eviction proceeding can be brought in the appropriate forum.

chelsea-300x200A recent article in the New York Times discusses the purchase of the building which currently houses Chelsea Market by Google.  Of course, this raises the issue of what becomes of the tenants in the building, including the all-important food vendors.  Commercial real estate in New York, whether in the New York City area or its surrounding suburbs, often changes hands.  The question then becomes what are the legal responsibilities of the new owner regarding the existing tenants.

In most cases, the property is sold subject to the current tenants’ leases.  This means that if the tenants have valid leases, and most commercial tenants would have such leases, then the new owner “steps into the shoes” of the existing landlord, and takes the property subject to the leases.  It is important for anyone purchasing such commercial real estate to have experienced counsel review the existing leases, and be aware of the rights and responsibilities of both landlord and tenants.  A commercial property such as Chelsea Market may have dozens of commercial tenants, who may have different leases, expiring at different points of time, with potential options to renew.  The new owner must analyze the situation prior to purchasing to ensure that the existing rent obligations create sufficient cash flow for their purposes.  Also, if the new owner wants the space vacated, an evaluation is needed to determine how long the existing tenants may remain.

Assuming the buyer is obtaining financing for its purchase, the institutional lender will require subordination non-disturbance and attornment agreements from the tenant.  This is an acknowledgement from the tenant of the status of the lease, such as term, security deposit held, rent due and whether either party is in default, and that it will pay the lender if the buyer does not make payments on their mortgage loan.  In exchange, the tenant should obtain an estoppel certificate, which is a document confirming their tenancy, and stating that they will not be evicted assuming they continue to meet their obligations under their existing leases.

tenant-300x161Our firm handles real estate transactions as well as landlord-tenant matters.  At certain times, these two areas of the law may intersect.  One situation which occurs frequently is when a multi-family house is sold by its owner, who may have one or more tenants living at the property.

In such a situation, what are the legal responsibilities regarding the tenants?  Most standard real estate sale contracts contain a clause requiring that the property be conveyed vacant and free of tenants.  Unless there is a rider to the contract modifying this clause, this means that it is the seller’s responsibility to remove all tenants prior to closing.   When our attorneys are confronted with such a situation, the first thing to do is to ask the proposed new owner’s attorney whether they wish to retain the tenants living at the premises.  It is possible that the new owner would also like to rent the property, or a portion of same, and does not want to go through the time and expense of locating new tenants after the purchase is complete.

If the new owner wishes to retain the tenants after she purchases the property, the next step is to determine whether the current tenants have a written lease for the premises.  If they do, the lease should be reviewed by the buyer’s attorney, and, at closing the lease should be legally assigned to the new owner.  What this means is that the new owner “steps into the shoes” of the former owner regarding the obligations under the lease.  Any security deposit being held by the seller of the property should be transferred to the buyer at the closing.  In addition, any rent already paid by the tenant prior to the closing should be pro-rated at the closing.  For example, a closing is scheduled for April 15.  The tenant pays his monthly rent of $1,000.00 on April 1 as per his lease.  At the closing, the buyer should receive a $500.00 credit as his share of the rent for the one-half month that he owns the property.  He will collect rent directly from the tenant starting in the first month after the closing.