M & B Prop. Conv. LLC v. The Meisner Gallery, Inc.

Suffolk County District Court, Second District (LT-238-17/BA). We successfully defeated a motion to dismiss a holdover summary proceeding, based on certain language in a commercial lease. This language should be in all leases in New York to protect the landlord from dismissal of a holdover proceeding should a landlord inadvertently accept the tenant’s rent payment for the period subsequent to the termination date and prior to the holdover proceeding. This period is often referred to by the Courts as the “window period” which some Courts hold sends a “mixed message” to the tenant which vitiates the prior notice to terminate.

In this proceeding, the respondent-tenant moved to dismiss the petition on the ground that its payment of rent by check dated February 15, 2017, for the month of March 2017 (the month after the lease was terminated on February 26, 2017), created a month-to-month tenancy, thereby requiring the service of a 30 days’ notice to quit before the holdover proceeding may be commenced, relying upon Real Property Law § 232-c.

New York’s Real Property Law § 232-c provides as follows:

Where a tenant whose term is longer than one month holds over after the expiration of such term, such holding over shall not give to the landlord the option to hold the tenant for a new term solely by virtue of the tenant’s holding over. In the case of such a holding over by the tenant, the landlord may proceed, in any manner permitted by law, to remove the tenant, or, if the landlord shall accept rent for any period subsequent to the expiration of such term, then, unless an agreement either express or implied is made providing otherwise, the tenancy created by the acceptance of such rent shall be a tenancy from month to month commencing on the first day after the expiration of such term.

Emphasis added.

In New York, once a month-to-month tenancy is created under Real Property Law § 232-c, that tenancy, in a building outside the City of New York, may only be terminated by a landlord on at least one full month’s notice of the landlord’s election to terminate. In other words, the tenant here argued that the termination notice was vitiated by the acceptance of rent and the creation of a month-to-month tenancy, thereby requiring a second 30 days’ notice to quit before a holdover proceeding may be commenced against it.

However, a month-to-month tenancy was not created under Real Property Law § 232-c because Section 29(e) of the lease between the parties was an express agreement providing otherwise, within the meaning of the Real Property Law. Specifically, it provided as follows:

Notwithstanding anything in this Article contained to the contrary, acceptance of any Rent paid by Tenant pursuant to this Article, shall not preclude Landlord from commencing and prosecuting a holdover or eviction action or proceeding or any action or proceeding in the nature thereof. The preceding sentence shall be deemed to be an “agreement expressly providing otherwise” within the meaning of Section 232-c of the Real Property Law of the State of New York and any successor law of like import.

Thus, we argued that the payment of rent by check dated February 15, 2017, for the month of March, when the termination notice came afterwards and ended the lease on February 26, 2017, did not create a statutory month-to-month tenancy, given, among other things, this express lease agreement providing otherwise. The Court agreed stating as follows:

The respondent next contends that prior to the Lease effective termination date of February 26, 2017 it paid the rent due for the month of March 2017 and petitioner’s acceptance thereof created a month-to-month tenancy which required a thirty (30) day notice of termination pursuant to RPL §232-c. Such argument is specifically addressed under the terms of the Lease. Under paragraph 29(e) of the Lease it provides in pertinent part that the acceptance of any rent shall not preclude the landlord from commencing a holdover proceeding as it shall be deemed to be an agreement expressly provided otherwise within the meaning of RPL §232-c.  Hence, dismissal is not warranted as a month-to-month tenancy was not created by the acceptance of March rent under the terms of the Lease.

Landlords should check their form leases for this type of language.