Valley Dream Hous. Co., Inc. v. Schmidt, 2007 NY Slip Op 51747(U) (N.Y. Dist. Ct. 9/14/2007), SP 4992/06.

CourtNew York District Court
Writing for the CourtScott Fairgrieve
Citation2007 NY Slip Op 51747
Docket NumberSP 4992/06.
Decision Date14 September 2007

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2007 NY Slip Op 51747(U)
SP 4992/06.
District Court of Nassau County, First District.
Decided September 14, 2007.

Jane C. Reinhardt, Esq., of Counsel to Jeffrey A. Seigel, Esq., Nassau/Suffolk Law Services Committee, Inc., Attorneys for Respondent, Donna Lupo, Hempstead, New York,; William D. Friedman, Esq., Attorneys for Petitioner, Hempstead, New York,; M. Kathryn Meng, Esq., Guardian ad Litem for Respondent Agnes Schmidt, Garden City, New York.


The instant holdover proceeding was commenced on or about September 13, 2006, with the filing of the Notice of Petition and Petition, by the petitioner, Valley Dream Housing Company, Inc. (a/k/a Monica Village) (hereinafter referred to as "VDH"), seeking to evict Donna Lupo from its Section 8 "New Construction" premises. The respondent, Donna Lupo opposes the eviction.

This matter was heard by the Court on submitted facts, as well as by way of oral arguments and conferences. The parties in this proceeding share quite an acrimonious history. This proceeding is the second attempt by VDH to evict Ms. Lupo from its Section 8 "New Construction" facility, since 1998.

The issue before this Court is whether or not the respondent, Donna Lupo, is entitled to remain a tenant of VDH's Monica Village facility.

The petitioner asserts that Ms. Lupo has no right to possession of the premises as she

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has waived her succession rights. Nor does she independently qualify for residency in VDH as she is not 62 years of age nor is she mobility impaired. In addition, petitioner alleges that Donna Lupo never applied, nor has she been listed as a tenant at the premises. The petitioner further acknowledges that Ms. Lupo was only entitled to remain at VDH premises, so long as she continued as a Live-in-Aide to her mother. Once Donna Lupo's mother vacated the premises, VDH alleges that Donna Lupo's entitlement to remain at VDH terminated, as supported by the "Live-in-Aide/Release of Succession Rights Agreement" signed by Ms. Lupo.

The respondent, Donna Lupo, alleges that she qualifies for succession rights to her mother's VDH unit as either a "remaining family member of a tenant family" or a member of an "elderly family" of a section 8 unit. In addition, she alleges that elderly tenants can add members to their lease during tenancies and that these additional younger members may succeed to the tenancy as remaining family members of a tenant family after the original tenant is no longer in possession. In the alternative, the respondent alleges that she qualifies as a tenant based upon VDH's tenant selection procedures which designates that mentally as well as physically disabled individuals are eligible for occupancy in the VDH facility.


VDH is the owner and operator of a Section 8 "New Construction" housing complex, governed by the Division of Housing & Community Renewal (hereinafter DHCR) and Housing & Urban Development (hereinafter HUD) rules and regulations, which is located in Valley Stream, New York. The complex was completed in 1976 and is comprised of 191 rental units; 187 units for the elderly and 4 for those with mobility impairments. Notably, VDH sought HUD Section 202 financing, however, HUD denied VDH's application. However, VDH was operating under the mistaken belief that it was, in fact, approved to operate as a HUD 202 project. This mistake was discovered in a prior summary proceeding of the parties under index number SP1718/02. The proceeding under index number SP1718/02 was dismissed by the Appellate Term for a failure of the petitioner to name the lessee, Agnes Schmidt, pursuant to RPAPL §711.

In January 1985, Agnes Schmidt and her husband, Donna Lupo's parents, applied for an elderly low income unit in VDH, naming their daughter, Donna Lupo, as a possible tenant or resident. They were placed on a waiting list, until October 15, 1990, when a unit became available. Agnes Schmidt moved into the unit alone since her husband had died in the interim and Donna Lupo was not living with her mother at the time. Donna Lupo was not listed as a member of Agnes Schmidt's household when Agnes Schmidt moved into the unit.

Donna Lupo moved in with her mother on or about July 1997 and the petitioner was notified by Agnes Schmidt. However, VDH refused to add Donna as a named tenant on the

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lease. The lease and all subsequent lease renewals only list Agnes Schmidt, as the tenant and Agnes is classified as the head of the household in the annual re-certifications. Notably, from 1997 to 2000, Donna Lupo moved in and then out of her mother's unit. Beginning in September 1997, Agnes Schmidt's mental capacity began to diminish and by October 1999, she was diagnosed with dementia. Therefore, her doctor continued to advise VDH that she required monitoring and would benefit from her daughters care. As a result of her mother's declining health, Donna Lupo moved back in with her mother. In August 2000, VDH agreed to allow Ms. Lupo to reside in the unit as her mother's live-in aide. Ms. Lupo executed a written waiver entitled "Release of Succession Rights", whereby she agreed to relinquish her rights as a remaining family member upon her mother's vacatur of the unit.

"Commencing January 1, 1998, petitioner included respondent's Social Security benefits of $7,510 a year in the family income of Agnes Schmidt, but not for the period commencing May 1, 1998, Oct 1, 1999, and did include $8,346 of such income for the period commencing September 1, 2000 and $8,640 of such income for the period commencing October 1, 2001" (see, Stipulation of Facts, ¶h). Ms. Lupo vacated the premises on or about March 3, 2000, but again re-occupied the premises with her mother on August 28, 2000.

On or about March 3, 2002, Agnes Schmidt vacated the VDH premises to reside permanently in a nursing home. Agnes Schmidt was assigned a guardian ad litem and the guardian entered into a stipulation on behalf of Agnes in this matter. The stipulation states in part: "Agnes Schmidt vacated the premises without intent to return about March 2002 and makes no claim of possession and surrenders whatever leasehold interest she may have in the premises as of March 2002."


A. The Underlying Purpose of Section 8 and Two Subcategories Within Section 8

The underlying purpose of the Section 8 program, is to provide affordable, decent, safe housing "through the private sector to certain lower income' families, the elderly and the disabled", with federal funding (see, Morrisania II Associates v. Harvey, 139 Misc 2d 651, 655 [Civ Ct NY, Bronx County 1988] citing Housing and Community Development Act of 1974, Pub L93-383, adding 42 USCA 1437f; see also, Evans v. Franco, 93 NY2d 823 [1999]). The Section 8 program is governed by federal statutes and regulations and policies promulgated by HUD. State law is also applicable to Section 8 tenancies, unless preempted by federal statute or regulation or unless state law is in conflict with Section 8 rules and regulations (see, Mott v. New York State Division of Housing and Community Renewal, 211 AD2d 147 [2d Dept 1995]).

In order to be entitled to the protections and benefits of a Section 8 tenancy, a tenant is responsible for "maintain[ing] statutory eligibility requirements and complying with the obligations of tenancy" (see, Morrisania II Associates v. Harvey, supra at 655). Section 8

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provides protection to all members of the family occupying an apartment. "The section 8 program recognizes the entire family as the tenant, entitled to occupancy and assistance" (see, supra ). The reason for this is that the program seeks to encourage "family cohesion" (see, supra at 656).

Under the provisions of 24 CFR 880.504(a) and 24 CFR 880.601, the owner of a complex that signs a contract to provide Section 8 housing must develop a marketing plan and promulgate rules and procedures to determine the eligibility of applicants to live in the complex and to make units in the complex available to qualified applicants.

"In consideration for the receipt of Section 8 assistance, the HAP Contracts impose certain general obligation on the owners of assisted properties including; (I) the leasing of assisted units to Section 8 income eligible families, (ii) the maintenance of the project as decent, safe and sanitary housing for the residents; (iii) compliance with applicable nondiscrimination and equal employment opportunity requirements, (iv) compliance with Section 8 reporting, management and accounting requirements, and (v) the procurement of the prior written approval of HUD and the Contract Administrator to any transfers of the project or any portion thereof and any assignment of the HAP Contract." (see,

More specifically, in addition to complying with the requirements above, the owner of a subsidized unit must reexamine the income and composition of the family at least every 12 months to determine if the tenant continues to be eligible for Section 8 subsidized housing and so that the amount of the subsidy required can be calculated (see, 24 CFR 880.603[c]). Income includes the full amount of Social Security or Social Security Disability benefits received by the tenant and members of the tenant's family who reside in the unit (see, 24 CFR 5.609[c][5]).

A required clarification in the present case, is the distinction between two categories of section 8 housing: "Section 8 New Construction" and "Section 202 Supportive Housing for the Elderly Program". VDH operated as a "Section 202" facility until 2002 when it realized that it was in fact a section 8 "New Construction" facility. The distinctions are as follows.

Under Section 8 "New Construction", HUD provides "rental assistance in connection with the...

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