Opinion
LT 87718/2008.
Decided March 28, 2011.
In this nonpayment proceeding, petitioner moves for an order restoring this matter to the calendar for a trial on rental arrears. Respondent opposes the motion and cross-moves for an order dismissing this proceeding pursuant to CPLR 3211. The court will grant the cross-motion and dismiss, as moot, petitioner's motion to restore.
On January 1, 2008, petitioner and respondent entered a lease for a Section 8 enhanced voucher unit, which was "not subject to the rent stabilization." The expiration date of the lease was December 13, 2009. However, effective July 31, 2008, the City of New York Department of Housing Preservation and Development (HPD) terminated respondent's Section 8 subsidy for violating requirements of truthful and complete reporting of family composition. Thereafter, respondent commenced a CPLR article 78 proceeding against HPD, challenging its determination.
The Section 8 system (Tenant Based Assistance: Housing Choice Voucher Program) is a federal program that provides housing assistance to eligible low-income families by giving subsidies to landlords who rent apartments to them ( see 42 USC § 1437f). In New York City, the City of New York Department of Housing Preservation and Development (HPD), the New York City Housing Authority and the New York State Division of Housing and Community Renewal administer Section 8 vouchers. Once an eligible family receives a Section 8 voucher, and the family has found a landlord willing to accept it, the landlord and public authority must sign a Housing Assistance Payments (HAP) contract ( see 24 CFR 982.451). The HAP contract specifies the terms of the landlord's participation in the Section 8 program.
In this case, HPD provided an enhanced voucher to respondent ( see 42 USCS § 1437f [t]). A Section 8 enhanced voucher refers to a voucher used to protect rent-regulated tenants where their landlord pre-pays federal loans to opt out of such rent regulation or opts not to renew project-based Section 8 contracts ( see 42 USCS § 1437f [t]). The tenant is able to remain in an apartment that begins charging market rent with an enhanced subsidy.
The petition asserts that respondent is a rent-stabilized tenant.
In October 2008, petitioner commenced this nonpayment proceeding against respondent for rent due. Respondent answered in defense that he paid his portion of the rent. Upon stipulation of the parties, the court marked this proceeding off the calendar pending the review of HPD's determination. By decision and order, entered May 20, 2010, the Appellate Division, First Department (Gonzalez, P.J., Friedman, DeGrassee, Manzanet-Daniels, Román, JJ.), unanimously confirmed the determination and dismissed the CPLR article 78 proceeding.
Thereafter, petitioner moved to restore this proceeding to the calendar. Petitioner later withdrew the motion on stipulation, as respondent requested permission for leave to appeal to the Court of Appeals from the Appellate Division decision and order. The parties further stipulated, among other things, that the stay in this matter remained in effect, that the tenant would vacate and surrender the premises to petitioner on or before July 13, 2010 and that the Housing Court would retain jurisdiction over the claim for rental arrears. Until vacating the apartment in July 2010, respondent paid petitioner his monthly portion of the rent. On September 7, 2010, the Appellate Division, First Department (Gonzalez, P.J., Friedman, DeGrasse, Manzanet-Daniels, Román, JJ.), denied respondent's motion for leave to appeal to the Court of Appeals.
Counsel for the parties wrongly contend that the Court of Appeals denied respondent leave in this matter, citing the September 2010 decision and order of the Appellate Division, First Department which denies such leave.
Petitioner now moves to restore the proceeding to the calendar for a trial on rental arrears, seeking payment for the full amount of rent due on the apartment. Respondent cross-moves for an order dismissing this proceeding with prejudice pursuant to CPLR 3211. Respondent argues that he cannot be held liable for the subsidized portion of the rent, even for the period after the termination of the subsidy.
Petitioner opposes the cross-motion, contending that, in the enhanced voucher Section 8 lease, respondent agreed to pay the full market rent for the subject apartment. To support this argument, petitioner points to paragraph one of the lease and paragraphs five and ten in the lease addendum. The language in paragraph one of the lease, upon which petitioner explicitly relies, states "[y]ou [tenant] will be billed and agree to pay each and every month rent as the above noted rent. . . ."Paragraph five of the addendum provides, as relevant here:
"5. Family Payment to Owner
(a) The family is responsible for paying the owner any portion of the rent to owner that is not covered by the PHA housing assistance payment.
(b) Each month, the PHA will make a housing assistance payment to the owner on behalf of the family in accordance with the HAP contract. The amount of the monthly housing assistance payment will be determined by the PHA with HUD requirements for a tenancy under the Section 8 voucher program.
(c) The monthly housing assistance payment shall be credited against the monthly rent to owner for the contract unit.
(d) The tenant is not responsible for paying the portion of the rent to owner covered by the PHA assistance program under the HAP contract between the owner and PHA. A PHA failure to pay the housing assistance payment to the owner is not a violation of the lease. The owner may not terminate the tenancy for nonpayment of the PHA housing assistance payment.
(e) The owner may not charge or accept, from the family or any other source, any payment for rent of the unit in addition to the rent to owner . . .
(f) The owner must immediately return any excess rent payment to the tenant."
Paragraph ten of the addendum provides: "PHA Termination of Assistance. The PHA may terminate program assistance for the family for grounds authorized in accordance with HUD requirements. If the PHA terminates program assistance for the family, the lease terminates automatically."
Considering all the arguments put forth, the court will grant the cross-motion, dismissing this proceeding, and dismiss the motion as moot. A nonpayment proceeding does not lie to recover from a tenant the subsidized portion of rent under a Section 8 lease agreement ( see Rainbow Assocs. v Culkin, 2003 NY Slip Op 50771[U], * 2 [App Term 2003]; see also Douglas v Nole, 20 Misc 3d 1119[A], 2008 NY Slip Op 51394[U], *2 [Nassau Dist Ct 2008]). "A Section 8 tenant agrees in the Section 8 lease only to pay the tenant share of the rent. Absent a showing by the landlord of a new agreement, . . . a Section 8 tenant does not become liable for the Section 8 share of the rent as rent' even after the termination of the subsidy" ( Rainbow Assocs. 2003 NY Slip Op 50771[U] at 2; see also Prospect Place HDFC v Gaildon, 6 Misc 3d 135[A], 2005 NY Slip Op 50232[U], * 1-2 [App Term, 1st Dept 2005]; see also Pinnacle Bronx West, LLC v Jennings, 29 Misc 3d 61, 62, 2010 NY Slip Op 20374 [App Term, 1st Dept 2010]).
Where HPD terminates a tenant's subsidy on the tenant's error, including a failure to properly certify, a landlord's remedy against the tenant is to commence a holdover proceeding based on breach of a substantial obligation of the tenancy ( see 835-37 Trinity Ave. HDFC v Royal, 2010 NY Slip Op 50481U, *3 [Civ Ct Bronx County 2010]; see also Zappala v Caputo, 17 Misc 3d 126[A], 2007 NY Slip Op 51808[U] [App Term, 9th 10th Jud Dists 2007]; Douglas v Nole, 2008 NY Slip Op 51394U, *2 [Dist Ct, 1st Dist 2008]).In the context of such holdover proceeding, a landlord may seek fair use and occupancy of the subject premises for the time period the tenant possessed the premises beyond termination of the Section 8 subsidy ( see generally Douglas, 2008 NY Slip Op 51394U at 2-3, discussing Zappala, 2007 NY Slip Op 51808U).
A landlord may seek payment of the total rent in a nonpayment proceeding against a tenant whose Section 8 subsidy has been terminated only where, after the legal termination of the Section 8 lease, the tenant and the landlord enter into a new agreement for the full rent amount. "Absent a showing by landlord of a new agreement . . . a Section 8 tenant does not become liable for the Section 8 share of the rent as "rent" . . .'" ( Prospect Place, 2005 NY Slip Op 50232[U] at 2, quoting Rainbow Assocs. v Culkin, 2003 NY Slip Op 50771U).
Here, there has been no such showing. Paragraph ten of the lease addendum clearly states that the lease "terminates automatically" when the Section 8 subsidy ends. However, petitioner and respondent entered no other lease agreement after the termination. Instead, respondent paid and petitioner continued to accept respondent's portion of the rent pursuant to the Section 8 lease.
The court has considered petitioner's argument that this proceeding involves an enhanced Section 8 voucher unit as opposed to a "regular" Section 8 voucher unit, which is at issue in Prospect Place and similar cases, cited here. However, the distinction appears to be without difference in the context of this matter. The language petitioner cites in the tenancy addendum before the court is clear that the "tenant is not responsible for paying the portion of rent to owner covered by the PHA housing assistant payment under the HAP contract between the owner and the PHA" (Tenancy Addendum, para 5). Petitioner's argument that the enhanced Section 8 voucher provides that the tenant will be responsible for the subsidized portion of the rent upon termination of the lease is completely unsupported by the language therein. Further, petitioner provides no case law or public policy reason to support its position. Finally, while petitioner contends that this application of the law results in a windfall for respondent, the legal principles applied here are not novel and counsel has represented petitioner throughout this proceeding.
Accordingly, it is ordered that respondent's cross-motion for an order dismissing this proceeding is granted and it is ordered that the proceeding is dismissed. Petitioner's motion to restore this proceeding to the calendar is dismissed as moot. The foregoing constitutes the decision and order of this court.