Rent Payments and Holdover Proceedings in New York State

trap-300x225Prior blog posts have discussed the operational aspects of a holdover landlord-tenant eviction proceeding.  Holdover proceedings, unlike non-payment proceedings, occur when a tenant’s lease term has expired, or when a tenant does not have a lease, and either party decides to terminate the tenancy on thirty day’s notice, which is their legal right.  This is in contrast to a non-payment proceeding, which is when a tenant with a valid lease fails to make his rent payments.

For example, a tenant has a lease with a term that ends on December 31.  On January 1, the tenant remains in the premises.  If they make a rent payment for January, they are now considered a month-to-month tenant for as long as the landlord continues to accept the monthly rent under the same terms as the expired lease.  The lease is now considered to be extended on a month-to-month basis as long as the parties agree.

But what happens if the landlord does not want the tenant to remain after the expiration of the lease, even if the tenant continues to pay rent?  The landlord must terminate the month-to-month tenancy by serving a “Notice to Quit” on the tenant.  The Notice to Quit must state that the tenancy will be terminated on no less than thirty days notice.  New York law has held that the termination date should follow the end of the lease term date contained in the original lease.  If the original lease term occurred on the last day of the month, the termination date in the Notice to Quit should also be on the last day of the month.  This may result in the tenant receiving slightly more than thirty days notice, for example, if the Notice to Quit is served on February 15, and the lease term ended on December 31 of the prior year, the Notice will have a termination date of March 31, which is at least thirty days notice, but at the end of the month as legally required, mirroring the original lease term.

The acceptance of rent payments after termination is also an important legal issue in landlord-tenant practice.  Once the date contained in the Notice to Quit has passed, the landlord is limited in her ability to accept rent payments.  The reason for this is that the landlord has terminated the lease by the Notice to Quit.  Courts have held that accepting rent payments after the termination date will invalidate the Notice to Quit, as well as any subsequent eviction petition.  Of course, there are exceptions to this rule.  One is that, after a formal eviction petition has been served on the tenant, the landlord may resume accepting rent payments without invalidating any of their notices.  Another exception is when either the parties or their attorneys formally agree in writing that payments can be made.  The legal term for such payments is “use and occupancy.”  This term is used to distinguish such payments from rent payments.  The parties can stipulate in writing that use and occupancy payments may be made during the pendency of a Court proceeding, or the Court itself may order that such payments be made.  Acceptance of such use and occupancy payments by the landlord therefore does not invalidate a Notice to Quit.

There are generally very few defenses available to a tenant in a holdover proceeding, as, with certain exceptions, landlords are not obligated to renew a lease which has expired.  However, acceptance of rent payments after the date in the Notice to Quit may invalidate a holdover proceeding and cause it to be dismissed.  We recommend consulting an experienced attorney when dealing with holdover proceedings and acceptance of rent payments during same.