Goho Equities v. Weiss

• Decision Date: 30 April 1991
• Citation: 149 Misc.2d 628,572 N.Y.S.2d 836
• Parties: GOHO EQUITIES, Petitioner-Appellant, v. David WEISS, Respondent-Respondent. GOHO EQUITIES, Petitioner-Appellant, v. Milton DEAN, Respondent-Respondent.
• Court: New York Supreme Court

Page 836

572 N.Y.S.2d 836

149 Misc.2d 628

GOHO EQUITIES, Petitioner-Appellant, v. David WEISS, Respondent-Respondent.

GOHO EQUITIES, Petitioner-Appellant, v. Milton DEAN, Respondent-Respondent.

Supreme Court, Appellate Term First Department.

April 30, 1991.

Finkelstein, Borah, Schwartz, Altschuler & Goldstein, P.C. (Paul N. Gruber, of counsel), New York City, for appellant.

Jeffrey S. Ween & Associates (Douglas Simmons, of counsel), New York City, for respondents.

Before PARNESS, J.P., and MILLER and McCOOE, JJ.

PER CURIAM:

Order entered November 16, 1989 (Alice Schlesinger, J.) modified by granting summary judgment to petitioner dismissing tenants' counterclaims for reimbursement of rent previously paid; as modified, order affirmed, without costs.

These consolidated nonpayment proceedings against two loft tenants in a building zoned for light manufacturing use were commenced in May 1989. Previously, in February 1985, shortly after petitioner acquired the building, the New York City Planning Commission had certified these lofts and two others located in the building for residential loft occupancy under the "grandfathering" provision of the city zoning resolution ( § 15-215). This constituted the requisite "administrative certification" for coverage under the Loft Law (MDL § 281, subd. 2[i]; see 150 West 26th St. Corp. v. Galowitz, 121 A.D.2d 214, 216-217, 502 N.Y.S.2d 1021). Subsequently, however, in connection with petitioner's application for final approvals from the New York City Planning Commission and Board of Standards and Appeals, petitioner elected to attempt to obtain simultaneous residential certification of two additional non-grandfathered lofts. This attempt failed, apparently because of the refusal of the mortgagee of the building to consent to the removal of the non-grandfathered units from the commercial market. Petitioner's application for local certification was thereafter terminated in October 1988.

Thus, even assuming that the 36 month period for legalization of the lofts sub judice began to run in February 1985, at the time the grandfathering approval was obtained (MDL § 284, subd. 1), that period had expired without a certificate of occupancy having issued at the time these nonpayment proceedings were commenced. Moreover, petitioner had made no application to the Loft Board for an extension of time to obtain a certificate. In this posture, the dismissal with prejudice of the nonpayment petitions by the Civil Court was correct.

Petitioner is not in compliance with the owner obligation provisions of the Loft Law and has not taken "all reasonable and necessary action" to secure a certificate of occupancy (County Dollar Corp. v. Douglas, 160 A.D.2d 537, 556 N.Y.S.2d 533; M.D.L. § 284, subd. 1). The argument that petitioner has been precluded from legalizing the lofts at issue by events beyond its control is not supported by the record. Rather, petitioner's inability to timely comply with the owner obligation provisions arises from its own decision to seek the certification by local authorities of residential use of six lofts after it had previously obtained approval for the grandfathering of only four units, including those tenanted by the respondents. The lack of consent of petitioner's mortgagee, required for a certification of the residential use of the additional two non-grandfathered units under the applicable zoning regulation, does not excuse petitioner's failure to comply with the statute. Petitioner was advised by the Board of Standards and Appeals in December 1986 that it could obtain legalization for the four grandfathered units if it deleted the non-grandfathered units from its application. As found below, "the petitioner chose [to] not follow this course of action through which the residentially occupied loft units could be brought into compliance with the minimum housing standards of a class A multiple dwelling."

With respect to tenants' counterclaims for reimbursement of rent previously paid, we search the record and grant summary judgment to petitioner (CPLR 3212[b]. Since residential use of the grandfathered lofts had been certified, tenants' past rent payments, voluntarily made with knowledge thereof and without objection, constitute a ratification that the housing provided was both safe and habitable. Section 302 of the Multiple Dwelling Law, which is penal in nature and is to be strictly construed, does not by its terms provide for the recovery of rent previously paid for use and occupancy(Wokal v. Sequin, 167 Misc. 463, 4 N.Y.S.2d 86; Coulston v. Teliscope Productions, 85 Misc.2d 339, 378 N.Y.S.2d 553). The statute should be harmoniously construed with section 325, which does not allow for the recovery back of rent voluntarily paid in related circumstances where the requisite multiple dwelling registration statement was not filed (subdivision 2).

McCOOE, dissenting in part.

I respectfully dissent from that part of the majority opinion which granted summary judgment dismissing the tenants' counterclaim for the return of rent paid when the multiple dwelling did not have a certificate of occupancy. The issue is whether Multiple Dwelling Law Sec. 302 should be construed to authorize a cause of action to recover rent paid during the period the dwelling lacked a certificate of occupancy.

The majority has affirmed the finding of the court below that the owner failed, as a matter of law, to "take all reasonable and necessary action" to comply with M.D.L. Sec. 284(1)(i) and dismissed the petition. Noncompliance with the aforementioned section generally poses a question of fact (Cromwell v. Le Sannom Building Corp., 171 A.D.2d 458, 567 N.Y.S.2d 41), but the absence of proof by the owner justifies the summary relief granted. Non-compliance and a failure to obtain a certificate of occupancy subjects the owner to the penalties of Article 8 of the M.D.L. which includes M.D.L. Secs. 301 and 302. See M.D.L. 284(1)(ii).

M.D.L. Sec. 301 mandates a certificate of occupancy for multiple dwellings with the exception, not present here, of compliance with the Loft Law (M.D.L. 283). Sec. 302(1)(b) states the penalty for not having a certificate of occupancy.

"No rent shall be recovered by the owner of such premises for said period, and no action or special proceeding shall be maintained therefor, or for possession of said premises for non-payment of rent" (emphasis supplied).

Future rent concededly cannot be recovered by the owner. The question is whether the tenants can recover rent paid when the dwelling did not have a certificate of occupancy. The answer requires statutory interpretation to ascertain the intent of the legislature. Case law, with one...