Gavish v. Rapp

• Decision Date: 06 September 1984
• Citation: 127 Misc.2d 255,485 N.Y.S.2d 407
• Parties: Jacob GAVISH, Plaintiff, v. Elaine RAPP, d/b/a Creative Growth Workshop, Defendant.
• Court: New York Supreme Court

Page 407

485 N.Y.S.2d 407

127 Misc.2d 255

Jacob GAVISH, Plaintiff, v. Elaine RAPP, d/b/a Creative Growth Workshop, Defendant.

Supreme Court, Special Term New York County, Part I.

Sept. 6, 1984.

Harris & McGaughey by Lawrence H. McGaughey, New York City, of counsel, for plaintiff.

David J. Stein, New York City, for defendant Rapp.

EDWARD J. GREENFIELD, Justice:

Plaintiff-landlord moves to enjoin defendant-tenant from either removing or dismantling improvements installed in the loft occupied by defendant at 11 West 17th Street, New York and/or restraining her from attempting to transfer any interest in the premises by assignment or subletting.

Plaintiff became the owner of the premises 11 West 17th Street on July 6, 1984. The premises were acquired from the Loft Management Corporation. Defendant Rapp first took over the premises in October, 1978 when she paid the outgoing tenant the sum of $10,500.00 for the assignment of his lease. Defendant continued in the premises under leases, the last of which terminated on September 30, 1983. Thereafter, she continued in occupancy as a month-to-month tenant.

Defendant alleges that upon her taking occupancy, she removed all existing partitions, electrical wiring and plumbing and reconstructed the loft space, subdividing it into a living area and a work space where she conducted her practice of art and dance therapy. In addition to erecting new partitions to wall the area off into rooms, she also claims to have constructed built-in closets, book shelves, mirrors and lighting fixtures, and to have renovated and improved the bathroom and the kitchen by installing new appliances.

During the early spring of 1984, tenant engaged the services of a real estate broker to procure a buyer for her leasehold interest in the loft and for the improvements. Her asking price was $85,000.00. Ultimately, on June 28, 1984, she entered into a contract with Mr. and Mrs. Howard Bildner to sell to them all her right, title and interest to the leasehold and to the improvements made therein for the sum of $64,000.00. Defendant then notified Loft Management Corporation of her agreement with the Bildners, giving the owner 30 days within which to exercise a right of first refusal for the purchase of the improvements pursuant to Section 286(6) of the Multiple Dwelling Law. The letter was transmitted to plaintiff as the new owner, and he requested that defendant Rapp and the prospective incoming tenants complete a detailed questionnaire. The completed questionnaire was returned to plaintiff on July 18. Defendant's attorney offered to make available to plaintiff a variety of paid bills, invoices and cancelled checks corroborating her improvements. On July 30, 1984, plaintiff's attorney replied:

"Although the Owner considers the asking price of the Outgoing Tenant to be very high, he is very desireous (sic) of reaching agreement with Ms. Rapp and will negotiate in good faith to that end. Owner wants to buy the loft provided agreement can be reached as to the price. Nevertheless, this letter is not a final rejection of Incoming Tenant Bildner, who is under active investigation."

Plaintiff-landlord continues to insist that while he is willing to purchase the improvements, the value claimed for them by defendant cannot be substantiated. Plaintiff thereupon commenced this action for declaratory judgment and an injunction. Defendant, contending that the landlord has not exercised his right of first refusal within 30 days, and asserting that she is no longer occupying the premises though she continues to pay rent, has cross-moved for an order granting her the right to go through with the proposed sublet of the loft.

Although defendant is purporting to assign her "leasehold rights" together with improvements for $64,000.00, it does not appear that she has any leasehold rights. Her lease expired on September 30, 1983. She has continued thereafter as a month-to-month tenant. The expired lease contained a provision granting to tenant the right to sublet or assign with the landlord's consent. On the expiration of the lease, this provision became inapplicable because defendant no longer had a leasehold to assign or sublet. Thereafter she continued occupancy as a month-to-month tenant. The lease provisions as to assignment and subletting did not carry over. Cf. Emtico Assoc. v. Gabel, 47 Misc.2d 577, 262 N.Y.S.2d 885, aff'd. 25 A.D.2d 718, 269 N.Y.S.2d 675. In the Emtico case it was held that "the right to sublet an apartment is not within the purview of the protection afforded by the rent control laws, and the sublet clause of a lease agreement is not projected into a statutory tenancy." (Id. p. 578, 262 N.Y.S.2d 885). The emergency rent laws permit a statutory tenant to hold over "not because he has any property right or estate in the premises, but because the emergency laws forbid his eviction." Wasservogel v. Meyerowitz, 300 N.Y. 125, 132, 89 N.E.2d 712. Similarly, the right to assign does not survive the expiration of the lease, and thereafter a tenant has no right to put a new party into possession under the assignment clause of the expired lease. Bisbano v. 40-42 Restaurant Corp., 280 App.Div. 790, 113 N.Y.S.2d 215. See also, Hart v. Merriman, N.Y.L.J. October 2, 1981, p. 4, col. 2 (App. Term, First Dept.).

Section 226-b of the Real Property Law (L.1983, Ch. 403, Sec. 37) provides, with respect to residential tenants, that a lease may not be assigned without the written consent of the owner. Should the owner withhold consent without cause, the sole consequence is the release of the tenant from the balance of the lease. In this case, since the tenant's lease has already expired, she is no longer bound by the lease. That does not mean that her rights are enlarged and that she can confer a leasehold and right of occupancy upon some third person. However, Subdivision 8 of Section 226-b contains the proviso that "nothing contained in this section shall be deemed to prevent or limit the right of a tenant to sell improvements to a unit pursuant to article 7-C of the multiple dwelling law."

Art. 7-C (Sections 280-287) of the Multiple Dwelling Law (L.1982, Ch. 349, Sec. 1, entitled "Legalization of Interim Multiple Dwellings", but generally known as the Loft Law) deals explicitly with buildings erected for manufacturing, warehouse or commercial purposes, and with a certificate of occupancy for such purposes, but which, in fact, had three or more units therein used for residential purposes. Section 286 specifies certain protections for residential occupants in loft buildings. One of those protections, designed to prevent windfalls to landlords as a result of tenants moving out after having substantially renovated or reconstructed a loft, provides:

"(6) Notwithstanding any provision of law to the contrary, a residential tenant qualified for protection pursuant to this chapter may sell any improvements to the unit made or purchased by him to an incoming tenant provided, however, that...