Nichelle A. Johnson, J.

James G. Dibbini, Esq., Attorney for Petitioner, 570 Yonkers Avenue, Yonkers, New York 10704, Jason Mays, Esq., Hudson Valley Justice Center, Attorneys for Respondents, 19 Court Street, Suite 400, White Plains, New York 10601

Nichelle A. Johnson, J. Petitioner commenced this holdover proceeding in January 2019 seeking to recover possession of the residential premises on the ground that the tenancy has been terminated based upon the respondents' breach of a substantial obligation of their tenancy in that they have chronically and consistently failed to pay their rent on time thereby requiring petitioner to commence three nonpayment summary proceedings within a twenty-month period of time.

Respondents now move to dismiss this holdover proceeding on the ground that the Notice of Termination is vitiated as a result of the petitioner offering the respondents a renewal lease after service of the Notice of Termination.

Petitioner opposes the motion and cross moves for summary judgment.

FACTS

The respondents occupy the ETPA premises located at 474 East Third Street, Apt. C7, Mount Vernon, New York, pursuant to a written lease agreement. On November 23, 2018, petitioner served respondents with a Notice of Termination advising respondents that their tenancy was being terminated on December 31, 2018 due to their chronic failure to pay the rent in full in a due and timely fashion as provided for in the lease agreement. The Notice of Termination listed the following three (3) nonpayment summary proceedings brought by petitioner against the respondents in the City Court of Mount Vernon: Index No. 0079-17; Index No. 2585-17; and Index No. 2232-18. On December 3, 2018 the respondents presented and executed a renewal lease with the petitioner. The petitioner then commenced this holdover proceeding on January 7, 2019.

Respondents Argument

In support of the motion to dismiss the holdover petition, respondent points out that after the petitioner served the termination notice in November, that on December 3, 2018, petitioner offered respondent a renewal lease. A copy of the lease is attached to the respondents' papers as Exhibit 2. The lease, dated December 3, 2018, provides "The owner hereby notifies you that your lease will expire on 01/31/2019". The new lease term is for the period of February 1, 2019 through January 31, 2020 or January 31, 2021 depending on the renewal option chosen by the respondents. The lease also bears a signature on the owner line and is dated December 3, 2018 and was fully executed when the respondent signed. Accordingly, respondents argue that the termination notice was vitiated and became null and void upon the petitioner's offer of the renewal lease. Relying on the holdings in 757 Miller Owners v. Smith, 2017 NYLJ LEXIS 549, L & T 69079/2016 N.Y.L.J., Mar. 8, 2017 at 30 [Civ. Ct. Kings Co. 2017], and Ambassador Realty Co. v. Wachtel , 139 Misc. 2d 965, 529 N.Y.S.2d 694 (1988), respondent argues that the landlord of an ETPA-regulated tenancy or any tenancy for that matter, vitiates its termination notice when it offers a renewal lease after the termination notice is served. Respondent also argues that even if a landlord is required to renew a lease pursuant to ETPA regulations, that that renewal lease should contain a "no waiver" clause or language preserving its rights under any previously served notice and that a tenant is entitled to unequivocal notice.

In Ambassador Realty Co. v. Wachtel a case out of Civil Court of the City of New York, Queens County, the landlord served a rent stabilized tenant with a termination notice on the grounds that the tenant was committing a nuisance, in that the landlord was forced to institute six nonpayment proceedings in a 21-month period. The tenant was advised that unless he vacated on February 3, 1988 the landlord would commence summary proceedings against him. On February 12, 1988 the tenant received a notice of renewal of lease for either a 1- or 2-year term. The landlord argued that Rent Stabilization Code § 2523.5 mandated that he serve the renewal notice upon the tenant. In dismissing the holdover petition, the court held that "tenants are entitled to an unequivocal notice which can be relied on" ( Ambassador Realty Co. v. Wachtel at 967, 529 N.Y.S.2d 694 (citing Siegel v. Kentucky Fried Chicken , 108 A.D.2d 218, 488 N.Y.S.2d 744, affd 67 N.Y.2d 792, 501 N.Y.S.2d 317, 492 N.E.2d 390 [1986], and that by offering a renewal lease after service of a termination notice, the landlord vitiated the termination notice. The court reasoned "[t]here is no requirement under the Rent Stabilization Law or applicable precedent to serve a lease renewal offer after unilaterally terminating a tenancy pursuant to a notice served on the tenant of record."

In 757 Miller Owners v. Smith a case out of Civil Court of the City of New York, Kings County 2017, there the trial court held that a holdover petition will be dismissed unless there is a provision within the renewal lease that alerts the tenant that the lease renewal was forwarded and executed by the landlord to merely comply with the lease renewal provisions of the Rent Stabilization Code. In making its ruling, the court observed that there appears to be a split of authority between the First and Second Departments as to the effect of tendering a renewal lease after service of a notice of termination. Respondent argues in their papers and quoted that in its legal analysis, the court in Smith stated "[t]he Appellate Term First Department has been quite clear that the tender of a renewal lease after a notice of termination was served in holdovers based on violation of a substantial obligation of the lease, does not vitiate the holdover proceeding stating "The fact that the petitioner-landlord was required by regulatory authority to send the renewal lease was not one of free will but of adhering to the requirements of law’ " (citing Stewart M. Muller Constr. Co. v. NY Telephone Co., 40 N.Y.2d 955, 390 N.Y.S.2d 817, 359 N.E.2d 328 [1976] ; Kibel v. Appel , 147 Misc. 2d 141, 555 N.Y.S.2d 559 [Civ. Ct. N.Y. Co. 1990] ). The court went on to explain that "appellate authority in the Second Department, however, has found to the contrary." The court observed that in Carroll St. Properties v. Puente, 33 HCR 627A, N.Y.L.J. 7/13/05, 30:6 [App. Term 2 & 11th Dept.], the court found that since the landlord did not expressly reserve his rights under pending litigation before entering into a lease renewal with the tenant, the termination notice was deemed vitiated. In its analysis the court also relied on holdings in Ambassador Realty Co. v. Wachtel [rent stabilized tenant is entitled to an unequivocal notice which can be relied upon]; and Kew Gardens Associates LLC v. Camacho, 3 Misc. 3d 135[A], 2004 WL 1243415 [2d Dept. 2004] [landlord's ratification of renewal after issuance of warrant vitiated its right to evict pursuant to final judgment]. Accordingly, in making its ruling and relying on what that court deemed to be Second Department findings, the 757 Miller Owners court held that the "landlord did not even attempt to place any kind of conditional clause into the lease contract" and thus "it is not contrary to case law that the Respondent was entitled to rely upon the renewal and anticipate reinstatement of the tenancy." Thus, respondent argues that the 757 Miller Owners court makes clear that failure to include conditional language in a lease renewal offer may result in vitiation of the termination notice and the dismissal of any proceeding based thereon.

Petitioner's Argument

Petitioner argues that Ambassador Realty Co. v. Wachtel is "outdated law" and "not an appellate term case" and deals with a Golub Notice not a termination notice and as a result unlike in this case, in Wachtel the landlord was not required to send a renewal lease because it was a Golub notice so that's why the court found that the renewal lease vitiated the notice there.

Petitioner further argues that respondent's reliance on the ruling in 757 Miller Owners v. Smith is also misplaced because it pertains to the Rent Stabilization Code of NYC and not the ETPA.

Further, in opposition to the motion, petitioner's managing agent Teresa Sanchez affirms that as a result of respondent's failure to pay rent, petitioner has commenced five non-payment actions against the respondent. She affirms that petitioner has renewed respondent's lease in the past because she managed to get caught up on her payments. However, she states that respondent's consistent pattern of nonpayment is a substantial violation of her tenancy warranting termination of her tenancy. Ms Sanchez affirms that petitioner served an unequivocal Notice of Termination on respondent, attached as Exhibit E. However, she states that due to clerical error, the service of the predicate notice was not input into petitioner's automated system that generates ETPA lease renewal offers. Thus, she maintains that due to an inadvertent mistake, the automated system generated and mailed a pre-partially executed ETPA Lease Renewal offer to respondent.

Thus, petitioner argues on one hand that it was required by law to offer the lease renewal and on the other hand that the lease renewal was sent inadvertently due to a clerical error in their automated system.

Perhaps the most compelling argument by petitioner is where petitioner argues that in a Second Department case — at both the Second Department Appellate Term in Stepping Stones Assocs. v. Seymour , 8 Misc. 3d 138(A), 806 N.Y.S.2d 449, 2005 N.Y. Slip Op. 51309[U], 2005 WL 1981544(App. Term, 9th & 10th Jud. Dists.) and the Second Department Appellate Division in Matter of Stepping Stones Assoc. v. Seymour , 48 A.D.3d 581, 853 N.Y.S.2d 562 (2d Dept. 2008) - the Stepping Stones court has already determined that if a landlord is required to send a lease renewal per the ETPA regulations, then sending same does not vitiate a notice of termination. While the court in Stepping Stones sided with the tenant, petitioner argues that this case is distinguishable from Stepping Stones factual history in that no warrant of eviction has issued in this matter prior to renewal of the lease unlike in Stepping Stones. Accordingly, petitioner maintains that it was legally mandated to send a lease renewal to the tenant thus same should not vitiate the termination notice.

Analysis and Decision

This Court in consideration of the foregoing case law and its own analysis, finds that since petitioner was legally obligated to offer the respondent/rent-stabilized tenant a renewal lease said renewal lease DID NOT vitiate the termination notice that was sent to the tenant. While there was discussion regarding the fact that the First and Second Departments have been on opposite sides of this issue this Court respectfully holds that this court's decision is supported by the case law in our sister Department, the Appellate Term First Department and, also by our own Appellate Term Second Department and the Appellate Division Second Department. This court offers the following discussion that undergirds its decision herein.

The Appellate Term, Second Department and the Second Department Appellate Division have held that when a landlord tenant relationship is severed by the issuance of a warrant of eviction, a landlord has no obligation to offer an ETPA tenant a renewal lease (See Kew Gardens Assoc. v. Camacho , 3 Misc.3d 135(A), 2004 N.Y. Slip Op. 50473(U), 2004 WL 1243415 (App. Term, 2nd & 11th Jud. Dists.) ; Stepping Stones Assocs. v. Seymour , 8 Misc. 3d 138(A), 806 N.Y.S.2d 449, 2005 N.Y. Slip Op. 51309[U], 2005 WL 1981544 (App. Term, 9th & 10th Jud. Dists.) ; Everett D. Jennings Apts. L.P. v. Hinds , 2006 N.Y. Slip Op. 51335(U) [12 Misc. 3d 139(A) ], 2006 WL 1892280 (App. Term 2nd & 11th Jud. Dists.) ; 43-19 39th Place, LLC v. Morillo , 17 Misc.3d 138(A), 2007 N.Y. Slip Op. 52333(U) [17 Misc. 3d 138(A) ], 2007 WL 4303713 (App. Term, 2nd & 11th Jud. Dists.) Matter of Stepping Stones Assoc. v. Seymour , 48 A.D.3d 581, 853 N.Y.S.2d 562 (2d Dept. 2008) ). So, when a landlord is in this situation - has secured a warrant/judgment severing the landlord-tenant relationship - a renewal lease will vitiate that warrant as the landlord was not required to offer a renewal lease.

The landlord in Stepping Stones , commenced a nonpayment summary proceeding in February 1999. When the tenant failed to deposit the sum of $6,500 with the court by March 15, 1999, the City Court of White Plains issued a judgment awarding the landlord possession of the apartment. The tenant appealed to the Appellate Term Ninth and Tenth Judicial Districts. While the appeal was pending, on August 24, 1999, the landlord offered the tenant a renewal lease and the tenant accepted on August 30, 1999. The lease which the tenant is alleged to have breached by nonpayment was due to expire on November 30, 1999. In finding for the tenant and dismissing the petition, the Term court stated:

The issuance of the warrant pursuant to the subsequently-reversed final judgment annulled the landlord-tenant relationship ( RPAPL 749[3] ). Thus, when landlord offered and executed the renewal lease, it was under no legal compulsion to do so (emphasis added)

Further, in finding that the landlord reinstated the tenancy by offering the renewal lease the court at the Appellate Division held:

Contrary to the landlord's argument, the facts here do not support the contention that the tender of the renewal lease was compelled by the requirements of the ETPA. Except in circumstances not presented here, the ETPA requires that a landlord offer a renewal lease to a tenant ( 9 NYCRR 2503.5 [a]. Here, however, the issuance of the warrant of eviction pursuant to the initial judgment in favor of the landlord terminated the landlord-tenant relationship

(citations omitted ), and, with it, the landlord's obligation to offer a renewal lease (citations omitted)(emphasis added) . Thus, since the landlord was under no compulsion here to offer a renewal lease, we need not decide whether the making of such an offer under compulsion of the ETPA has the effect of defeating the landlords claim to possession by reason of the tenant's breach of the prior lease. (emphasis added)

Thus, in the above decision the Second Department Appellate Division was of the opinion that whether or not the landlord has an obligation to offer a renewal lease, would impact their decision. While this Court disagrees with petitioner's assertion that "the Stepping Stones court has already determined that if a landlord is required to send a lease renewal per the ETPA regulations, then sending same does not vitiate a notice of termination", we submit that the Second Department Appellate Division implicitly indicated its swaying that a mandatory renewal lease requirement would change the outcome of a case and we submit that it should. Again, we reiterate that in rendering its decision, the Second Department specifically stated:

Thus, since the landlord was under no compulsion here to offer a renewal lease, we need to decide whether the making of such an offer under the compulsion of the ETPA has the effect of defeating the landlord's claim to possession by reason of the tenant's breach of the prior lease " (emphasis added) (citing 9 NYCRR 2522.5 [b] ); compare Everett D. Jennings Apts. L.P. v. Hinds, 12 Misc. 3d 139(A), 2006 WL 1892280 [2006] ; ... with Kibel v. Appel, 147 Misc. 2d 141, 555 N.Y.S.2d 559 [1990] )

An analysis of the two cases cited by the Appellate Division Second Department in its decision is revealing as to why the status of the landlord tenant relationship is key to their analysis and what this court submits, its sway that where the landlord tenant relationship is still in existence a renewal lease should not vitiate a prior termination notice. In Everett D. Jennings , an Appellate Term, Second Department 2006 case, the court in ruling in favor of the tenant dismissing the summary proceeding stated "the landlord conceded, in a motion addressed to this court that the parties executed a renewal lease subsequent to the issuance of the warrant, at a time when the landlord-tenant relationship had been cancelled by the issuance of the warrant ( RPAPL 749 )3). In Kibel v. Appel an Appellate Term, First Department case right on point with the facts of this case, the court in a holding in favor of the landlord, stated that "the fact that the landlord was required by regulatory authority to send the renewal lease was not construed as vitiating the notice of termination when the act of renewing the lease was not one of free will but of adhering to the requirements of the law". It further stated, "accordingly the tender of a renewal lease in conformity with Code (Rent Stabilization Code) requirements should not be construed as vitiating the holdover proceeding or waiving landlords' right to prosecute the proceeding". This court points out again, the Appellate Division Second Department in Stepping Stones , cited this Appellate Term First Department case.

The question that this court must decide is whether petitioner's offer of the executed renewal lease after service of the notice of termination and prior to commencement of this action vitiated the termination notice and warrants dismissal of this proceeding. Courts in the First Department have continued to support the fact that a landlord with an obligation to offer a renewal lease will prevail where they have served a renewal lease in line with regulations where the landlord tenant relationship is still in tac. As the trial court stated in ML 1188 Grand Concourse LLC v. Khan, 60 Misc. 3d 1215(A), 2018 WL 3521219 [Civ. Ct. Bronx Co. 2018] ), "[t]he distinction between offering a renewal lease after the annulment of the landlord-tenant relationship by the entry of a judgment and issuance of warrant, and offering a renewal lease during litigation but prior to the entry of a judgment and issuance of a warrant, is central to the analysis of Respondent's motion."

In Terrace 100, L.P. v. Blaylock , 53 Misc. 3d 1156, 40 N.Y.S.3d 876 [Dist. Ct. Nassau Co. 2016] the district court dismissed a holdover petition where the landlord sought re-certification of the tenant's lease after service of the 30-day notice of termination. While the litigation was pending and before a judgment was rendered, the landlord sought re-certification of the tenant's lease and sent the tenant a letter adjusting her rent. Citing to the Second Department's holding in Stepping Stones, 48 A.D.3d at 583, 853 N.Y.S.2d 562, the court rejected the landlord's argument that federal regulations mandated it to send the HUD re-certification notice. Similarly, in the instant case, as in Stepping Stones , the re-certification of respondent's lease, in March of 2016, commenced a new tenancy, and prevents petitioner landlord from seeking possession of the subject premises based upon the 30-day notice to terminate under the previous lease. Moreover... the sending of the HUD re-certification notice must be viewed as a waiver of the termination notice, and respondent's motion to dismiss should be granted.

In Nyack Plaza v. Parker , 18 Misc. 3d 126(A), 2007 N.Y. Slip Op. 52353(U), 2007 WL 4355300 [App. Term 9th & 10th Jud. Dists.], the Second Department held that a landlord, with a viable chronic nonpayment cause of action, reinstated the tenancy by offering the Section 8 tenant a renewal lease. In responding to the holdover petition for chronic nonpayment, the tenant argued that all the incidents of nonpayment occurred prior the landlord's renewal of tenant's lease in June 2004. The landlord argued that it was required by federal regulation to renew tenant's Section 8 lease and that there can be no waiver of a chronic-nonpayment cause of action. The Second Department held that the landlord was not required to renew the tenant's lease in June 2004 after tenant's chronic nonpayment, "but could have served the termination of tenancy notice then, or prior thereto. Yet landlord, with full knowledge that it had an apparently viable cause of action based on tenant's chronic nonpayment, executed the renewal lease .... These actions are not without legal consequence" ( Nyack Plaza v. Parker, 18 Misc. 3d 126 (A) (citing Stepping Stones Assocs. v. Seymour , 8 Misc. 3d 138 (A), 2005 WL 1981544 [App. Term, 9th & 10th Jud. Dists.] ). Petitioner argues that this case is inapposite as Section 8 regulations, unlike ETPA regulations, do not require that the landlord offer a renewal lease.

The facts in Nyack Plaza and Terrace 100, L.P. are distinguishable in that those tenancies were Section 8/HUD tenancies subject to Section 8/HUD regulations which do not specifically provide that a landlord is obligated to offer a renewal lease when there is violation of the substantial obligation of the tenancy. However, we note again that this case is on point with the facts in Kibel v. Appel , 147 Misc. 2d 141, 555 N.Y.S.2d 559, cited by the Second Department Appellate Division in Stepping Stones court for its contrary position. In Kibel, the petitioner landlord served a 30-day termination notice on the rent stabilized tenants seeking termination of the tenancy on the grounds the tenants were violating a substantial obligation of their tenancy. After service of the termination notice and prior to commencing the holdover proceeding on those same grounds, the petitioner furnished the respondents with a renewal lease. In holding that the offer of the renewal lease did not vitiate the termination notice, the trial court held that "the petitioner landlord was required by regulatory authority to send the renewal lease" and "the act of renewing the lease was not one of free will but of adhering to the requirements of law". The court found that Rent Stabilization Code § 2523.5 mandates that the landlord offer the renewal lease, and "[w]hile section 2524.4 lists several exceptions to this rule, violation of a substantial obligation is not one of them." The court further found that the cases relied on by the respondent were "inapposite because none of them involved the compulsion of furnishing a renewal lease under the Rent Stabilization Code" ( Kibel v. Appel, 147 Misc. 2d 141, 555 N.Y.S.2d 559 (citing Mobil Oil Corp. v. Lione, 66 Misc. 2d 599, 322 N.Y.S.2d 82 [Dist. Ct., Suffolk Co. 1971] ; Atkinson v. Trehan , 70 Misc. 2d 614, 334 N.Y.S.2d 293 [Civ. Ct. NY Co. 1972] ; Kennedy v. Deignan, 90 Misc. 2d 238, 394 N.Y.S.2d 134 [Dist. Ct. Nassau Co. 1977] ).

In the instant case the tenancy is controlled by ETPA regulations. ETPA § 2504.4 provides in pertinent part:

The landlord shall not be required to offer a renewal lease to a tenant, and may maintain an action or proceeding to recover possession in a court of competent jurisdiction only upon one or more of the following grounds:

(a) Occupancy by owner or immediate family ...

(b) Withdrawal from the rental market ...

(c) Other grounds ...

(d) Primary residence ...

(e) Election not to renew ..

(f) Demolition.

The "other grounds" subsection does not include a summary proceeding for chronic nonpayment of rent. Accordingly, since chronic nonpayment is not a listed exception, the court finds that the petitioner-landlord was obligated to offer the respondent-tenant a renewal lease despite serving a notice of termination on the respondent, and such offer did not vitiate the termination notice. This court also notes that at the time the renewal was required to be offered, landlord could not predict whether tenant would ultimately prevail on the anticipated holdover proceeding and was not obligated to run the risk of penalties which adhere to a failure to renew a stabilized lease. While the Court is sympathetic to respondent's position that tenants must be offered unequivocal notices to avoid confusion, the cases relied upon for that position are not controlling. Moreover, the ETPA regulations do not require that the petitioner-landlord add qualifying language to lease renewal offers when there are outstanding termination notices and pending summary proceedings against rent stabilized tenants. As stated, the lease in question is regulated by the ETPA and it is clear that any renewal lease must be upon, the same terms and conditions of the expiring lease (See 9 NYCRR 2503.5 Renewal of lease which states in part "(a) On a form prescribed by the division signed and dated by the landlord, every landlord shall notify the tenant in occupancy not more than 120 days and not less than 90 days prior to the end of the tenant's lease term, by certified mail, of such termination of the lease term and offer to renew the lease at the legal regulated rent permitted for such renewal lease and otherwise on the same conditions as the expiring lease"). In this regard, the landlord does not have the ability to alter the lease in any way to include language regarding reserving rights under already existing termination notices or court proceedings. Additionally, here we find, contrary to other cases, there was no subliminal intent to renew the lease as there was no acceptance of any additional monies nor anything like that. To the contrary, what was served after the renewal lease was signed and executed, was the notice of petition and petition for a holdover whereby landlord was requesting court action to remove the respondents in line with the termination notice served prior to the renewal lease.

For the reasons stated above, respondent's motion to dismiss is denied.

Petitioner's motion for summary judgment is denied. There are triable issues of fact with respect to the allegations of chronic nonpayment.

The parties shall appear for trial on July 11, 2019 at 2:00 pm.

The Court considered the following papers: Respondent's Notice of Motion to Dismiss and/or for Summary Judgment, dated February 22, 2019; Affirmation in Support, dated February 22, 2019; Affidavit in Support, dated February 21, 2019;

Exh.1-2. Petitioner's Notice of Motion for Summary Judgment, dated April 12, 2019; Affirmation in Opposition, dated April 12, 2019; Affidavit in Support of Cross Motion, dated March 5, 2019; Exh. A-E. Respondent's Amended Affirmation in Reply, dated May 8, 2019. Petitioner's Reply Affirmation in Support, dated May 15, 2019.

This constitutes the Decision and Order of this Court.