Karan Realty Assoc. LLC v Perez

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[*1] Karan Realty Assoc. LLC v Perez 2022 NY Slip Op 22093 Decided on March 25, 2022 Civil Court Of The City Of New York, Queens County Kuzniewski, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the printed Official Reports.

Decided on March 25, 2022
Civil Court of the City of New York, Queens County

Karan Realty Associates LLC, Petitioner-Landlord,


Nelson Perez, Respondent-Occupant, CRISTINA PEREZ JOHN DOE & JANE DOE, Respondent-Undertenants.

Index No. L & T 306418/21

For Petitioner: Gregory Bougopoulos, Esq., Novick Edelstein Pomerantz, P.C.

For Respondent: Jessie Phillips Levine, Esq. Queens Legal Services
Jeannine Baer Kuzniewski, J.

Recitation, as required by CPLR 2219(A), of the papers considered in the review of this Notice of Motion:

EXHIBITS Memo of Law
OTHER NYS ERAP Application

Upon the foregoing cited papers, the Decision/Order on the petitioner's motion to vacate the stay that is in effect due to the filing of a Hardship Declaration and ERAP application in this holdover proceeding is as follows:

This holdover proceeding was commenced seeking possession of the premises at 109-10 Park Lane South, apartment A6, Richmond Hill, NY 11418. The petition states that Nelson Perez is in occupancy of the apartment as an incidence of his employment as superintendent of the building. His employment was terminated on September 1, 2021 and the petition was filed on [*2]September 28, 2021. On October 6, 2021 the petitioner filed an amended petition which also alleged:

"Respondent's persistently and unreasonably engaging in behavior that substantially infringes on the use and enjoyment of other tenants or occupants or causes a substantial safety hazard to others, including your landlord and other tenant(s)."

Essentially the petitioner is alleging that the respondent is infringing on the use and enjoyment of the landlord and other tenants by remaining in the apartment and thereby not allowing the new superintendent to move in and be on property to address the needs of the tenants in the building. On October 3, 2021 Nelson Perez completed a Hardship Declaration. On December 10, 2021 the petitioner filed this Order to Show Cause. On January 27, 2022 the respondent applied for ERAP. On February 1, 2022 the respondent submitted opposition to the Order to Show Cause and on February 7, 2020 the petitioner filed their reply.

The Order to Show Cause seeks an order invalidating the Hardship Declaration filed by Mr. Perez. The Court will deny this as moot as this protection expired on January 15, 2022.

The application further asks that the proceeding be allowed to continue arguing that:

"...due to Respondents continued occupancy demonstrating persistent and unreasonably ongoing in behavior which is substantially interfering with the use and enjoyment of other tenants or occupants, or which causes a substantial hazard to others, -invalidating any stay of the proceeding date to Perez's filing of an Emergency Rental Assistance Program (the "ERAP") application, pursuant to Chapter 417, laws of 2021, Part A, §8 ) the "ERAP Amend Law"), because this is not an eviction proceeding eligible for coverage under ERAP program and/or Perez is not eligible for ERAP; and -pursuant to Eviction Restriction Law §10, scheduling the matter for a trial on a date and time certain ."[FN1]

In April 2021, the legislature passed the COVID-19 Emergency Rental Assistance Program ("CERAP"), funded with $2.6 billion for residential rent and utility assistance.

"On August 12, 2021, in the case Chrysafis v. Marks, the U.S. Supreme Court enjoined the enforcement of CEEFPA's residential eviction moratorium, finding that provisions that provided for a tenant to self-certify financial hardship and delayed a landlord from contesting the certification violated constitutional rights to due process. In response, the New York State Legislature amended the statute on September 1, 2021."[FN2] "The legislature is especially cognizant of the ongoing risks posed by residential evictions stemming from non-payment of rent during the height of the public health emergency, and its recovery period, such as the potential to exacerbate the resurgence of [*3]COVID-19, the damage significant numbers of evictions would cause to the state's economic recovery, and the deleterious social and public health effects of homelessness and housing instability."[FN3]

The amendment addressed the due process argument by providing for a mechanism for a petitioner to make a motion to dispute the validity of the hardship declaration.[FN4] There was no such mechanism for the petitioner to dispute the respondent obtaining a stay by filing an application for the Emergency Rent Assistance Program (ERAP).

The petitioner now moves to lift the stay imposed by the respondent's filing of the ERAP application arguing that "this is not a proceeding eligible for coverage under ERAP program and/or Perez is not eligible for ERAP."[FN5]

"... the stay only applies to proceedings where the respondent(s) would be eligible for ERAP in the first place. So, summary proceedings commenced pursuant to RPAPL §711, which involve 'tenants,' are clearly eligible proceedings. However, proceedings commenced pursuant to RPAPL §713 clearly cannot be eligible for a stay, because by their very nature they are based on a lack of landlord-tenant relationship."

Subpart A Section 3 of the Act states:

"'Tenant' includes a residential tenant, lawful occupant of a dwelling unit, or any other person responsible for paying rent, use and occupancy, or any other financial obligation under a residential lease or tenancy agreement, but does not include a residential tenant or lawful occupant with a seasonal use lease where such tenant has a primary residence to which to return to."

In support of the respondent's argument, they rely upon the court's ruling in 204 W. 55 Street LLC v. Mackler, et. al. (NY Co 2021), LT-300325/21. The court in determining that it did not have the jurisdiction to lift the ERAP stay determined:

"Petitioner asks the court to make a judicial determination, either apart from OTDA or to supplant OTDA's decision, finding that respondents are ineligible for ERAP funds. The ERAP statute provides that the OTDA commissioner is authorized and charged with implementing and administering the financial assistance program. ERAP, Section 1(3). The statute does not provide the Housing Court with the authority to determine whether a person is eligible for ERAP assistance. This ERAP eligibility determination lies solely with OTDA."

Subsequent to the above ruling, there have been decisions weighing in on the issue. The court in Active v Gregory, 2022 NY Slip Op 50117(U) [74 Misc 3d 1213(A)] vacated the ERAP stay:

"... if respondents' ERAP application is approved and petitioner accepted the funds, the payment of funds through the ERAP program would not reinstate the landlord-tenant relationship. Consequently, allowing the stay to continue is an exercise in futility and prejudicial to petitioner."The court in Kelly v Doe, 2022 NY Slip Op 22077, in distinguishing the facts from its prior ruling in Sea Park East LP v Foster, 74 Misc 3d 213, determined: "To allow individuals, alleged to be squatters, who are not tenants, the benefit of a stay provision of ERAP would be futile and would lead to an absurd result, not contemplated by the statute. (See Hibertz v City of New York, 64 Misc 3d 697 [Supreme Ct, Kings Co 2019) (Although statutes will ordinarily be accorded their plain meaning, courts should construe then to avoid, objectionable or absurd consequences)."

Most recently, the court in 2986 Briggs LLC v Evans, 2022 NY Slip Op 50215(U) found:

"...the ERAP Law does not provide a specific mechanism for landlords to challenge a stay, as did the revised "hardship declaration" statute promulgated after the enjoining of CEEFPA, Part A in Chrysafis v Marks, where the US Supreme Court specifically took issue with a statute that allowed a tenant to "self-certif[y] financial hardship" while precluding "a landlord from contesting that certification". Chrysafis held that, "This scheme violates the Court's longstanding teaching that ordinarily 'no man can be a judge in his own case' consistent with the Due Process Clause." However, the ERAP Law also does not include any provisions preventing landlords from challenging such a stay in a pending court proceeding and raising whatever cogent legal arguments they may have, including that ERAP funds may be irrelevant to a particular case, or that occupants of a particular residence clearly do not meet one or more of the program's fundamental eligibility criteria. If this Court were to categorically refuse to consider such arguments the same concerns that were implicated in Chrysafis v Marks would arise.""...what is before the Court is not a nonpayment proceeding where a landlord's receipt of a rent arrears payment upon approval of a tenant's ERAP application, 'could naturally and foreseeably resolve the nonpayment litigation.' Harbor Tech, (73 Misc 3d 1211[A], 154 NYS3d 411) That the petition includes use and occupancy in its prayer for relief is of no moment here where there is no indication of any 'written or oral rental agreement,' as is required under the RPAPL § 702 definition of 'rent', incorporated by reference in the ERAP Law. Compare 255 Skyline Drive Ventures LLC v Ryant, supra (finding, 'in light of the particular circumstances of this case' no distinction between 'rent' and 'use and occupancy').

The specific facts before this Court involve a holdover against a terminated superintendent. In the event ERAP were to be approved, it would not restore a "landlord-tenant" relationship as one has never existed between these parties. The respondent argues that the Court cannot entertain the argument as it was not ripe at the time the application was made before the court because the respondent filed his ERAP application subsequent to the filing of the motion.

In the interest of judicial economy the Court will entertain the argument seeking a lifting of the ERAP stay.

"To determine whether a matter is ripe for judicial review, it is necessary first to determine whether the issues tendered are appropriate for judicial resolution, and second to assess the hardship to the parties if judicial relief is denied"[FN6]

As the proceeding is currently stayed solely due to the pendency of the ERAP application, the issue is appropriate for judicial resolution.

Based on the facts before the Court, the motion is granted to the extent of lifting the ERAP stay. This respondent has no lawful obligation to pay rent, nor is it alleged that he ever had that responsibility. Respondent's possession of the premises is purely incidental to his now terminated employment. The petitioner has represented that they will not participate with ERAP nor will they create a tenancy. Further, pursuant to the statute([FN7] ) the Court has reviewed the application status on the portal under application number 0HBBQ DOB 2/2/75. The NYS site indicates that the respondent has not submitted "All Tenant Information and Documentation Verified". Based on this status, the state cannot complete the application and will most certainly deny it for failure to supply the required information. Mr. Perez filed his application on January 27, 2022, however, despite almost two months having elapsed, he has failed to provide the required verified documents to allow the application to proceed. This suggests that the filing of the application solely triggered a stay of the proceeding rather than a good faith attempt to obtain funds for the petitioner. Accordingly, it is futile to maintain the stay. The Court does not believe that it was the legislative intent in drafting the ERAP stay provisions to simply provide a mechanism to obtain a stay of a proceeding when it was not in reality to allow time for the ERAP application to be processed and to allow a petitioner to obtain rent relief; nor is it to maintain a landlord tenant relationship.

In light of the lifting of the stay, the Court need not address the issue of the amendment of the Petition, as the proceeding will be calendared and the respondents have the right to file any applicable motions in contesting the pleadings. The proceeding is adjourned to April 21, 2022 at 3:45 for all purposes including settlement or transfer for assignment to a trial part. The respondents to file an Answer on or before April 8, 2022.

Dated: March 25, 2022
Hon. Jeannine Baer Kuzniewski, J.H.C. Footnotes

Footnote 1:See Petitioner's Order To Show Cause.

Footnote 2:NYS Senate Bill S50001.

Footnote 3:Id. §2

Footnote 4:Id. at Subpart A §10.

Footnote 5:Petitioner's Order to Show Cause Part d.

Footnote 6:(Matter of Ranco Sand & Stone Corp. v Vecchio, 124 AD3d 73, 80-81 [2d Dept 2014])

Footnote 7:Id. at Part A§3(b)(ii).