330 South Third St., HDFC v. Bitar

• Decision Date: 07 July 2010
• Citation: 28 Misc.3d 51,906 N.Y.S.2d 839
• Parties: 330 SOUTH THIRD STREET, HDFC, Appellant, v. Benildis BITAR, Respondent, and "John Doe" and "Jane Doe", Undertenants.
• Court: New York Supreme Court

906 N.Y.S.2d 839

28 Misc.3d 51

330 SOUTH THIRD STREET, HDFC, Appellant,

v. Benildis BITAR, Respondent,and"John Doe" and "Jane Doe", Undertenants.

Supreme Court, Appellate Term, 2nd, 11th and 13th Judicial Districts.

July 7, 2010.

Law office of Gerald M. Pigott, P.C., Bethpage (Gerald M. Pigott of counsel), for appellant.

Law office of Charles Donaldson, P.C., Brooklyn (Charles W. Donaldson of counsel), for respondent.

PRESENT: STEINHARDT, J.P., PESCE and RIOS, JJ.

Appeal from an order of the Civil Court of the City of New York, Kings County (Eleanora Ofshtein, J.), entered May 26, 2009. The order granted the branch of tenant's motion seeking summary judgment dismissing the petition.

ORDERED that the order is affirmed without costs.

Landlord, a non-profit housing development fund cooperative corporation (HDFC) ( see Private Housing Finance Law [PHFL] art. XI), commenced this holdover proceeding following service of a 30-day notice of termination. Tenant answered and moved, as relevant to this appeal, for summary judgment, asserting, among other things, that the notice of termination was defective because it failedto allege a reason for the termination. Landlord opposed the motion, arguing, among other things, that it was not required to allege a reason for the termination because tenant did not take possession of the subject apartment until 11 years after the conversion to an HDFC. Finding that the record established significant government participation and entwinement in the HDFC, the Civil Court ruled that landlord was required to allege a cause for the eviction and granted the branch of tenant's motion seeking summary judgment dismissing the petition. We affirm.

The record indicates that, in May 1991, the building, which had been managed by the Department of Housing Preservation and Development (HPD) pursuant to the Tenant Interim Lease Program ( see generally 28 RCNY ch. 34), was converted to an HDFC organized pursuant to the provisions of article XI of the PHFL. Landlord's certificate of incorporation states that the corporation is organized exclusively for the purpose of developing a housing project for persons of low income and that none of the income and earnings of the corporation may be used for the profit of any private individual or corporation. The certificate also restricts the use, sale and transfer of the building, requiring that it shall provide housing for persons and families of low income; that for a period of 25years, it shall not be sold without HPD's approval; and that approval shall be granted only on condition that HPD receive 40% of the profits of the disposition. It further provides that the corporation may not be dissolved without HPD's consent. The building was conveyed by the City to landlord by deed dated June 26, 1991, which deed also included a 25-year restriction on the sale or transfer of the deed without HPD's written approval, as well as a covenant requiring that the premises be used solely as a housing project for persons or families of low income. At the time the deed was transferred, the City and landlord executed a security agreement, which gave the City a security interest in the property for 25 years to secure, among other things, payment of the City's 40% share of the proceeds of a sale of the building or of an individual apartment and which made landlord the City's agent to collect the City's 40% share of the profit upon the sale of an individual...