Opinion
53646/2004
Decided June 27, 2005.
In an earlier motion dated March 1, 2004, the respondent sought summary judgment and dismissal of the instant nonpayment proceeding; alleging that the petitioner violated the Second Partial Consent Order in Williams v. N.Y.C.H.A., (No. 81 Civ. 1801, 1994 WL 533572 [S.D.NY 1994]), by failing to identify the respondent as a Section 8 tenant and notify New York City Housing Authority ("NYCHA") accordingly, and seeking full rent from the respondent, including her Section 8 portion. The respondent's motion was held in abeyance and the proceeding was marked-off the calendar on May 12, 2004, so as to allow the respondent an opportunity to seek an injunction at the United States District Court. By notice of motion dated January 21, 2005, the petitioner now seeks to restore the case to the calendar based upon the District Court's denial of injunctive relief.
The Consent Order, which enumerates certain procedural and substantive requirements, binds all landlords participating in the NYCHA Section 8 program.
It is undisputed that the respondent has resided in the subject rent stabilized apartment since 1981, and in or about 1988, she began receiving Section 8 benefits. In order to receive payment under the Section 8 program, the petitioner or its predecessor entered into a succession of Housing Assistance Payment ("HAP") contracts with NYCHA. According to the petitioner, it notified NYCHA on August 21, 2003, and the respondent on October 7, 2003, that it was "opting out" of the Section 8 program and that the respondent would have to pay the full rent herself if she chose to sign the current renewal lease beginning December 1, 2003. The petitioner then refused both NYCHA's and the respondent's December 2003 and January 2004 rent payments and commenced the instant proceeding seeking full rent from the respondent.
It does not appear as though the parties' original lease indicated that the respondent is or would be a Section 8 recipient.
According to the respondent, once the petitioner entered into the Section 8 program, the petitioner could not opt-out but must offer a renewal lease on the same terms and conditions. ( M 1849 v. Innis, N.Y.L.J., Nov. 10, 2004, pg. 20, col. 3 [Civ. Ct., Bronx Cty.]; Bran-Tran v. Matus, N.Y.L.J., Aug. 11, 2004, pg. 19, col. 3 [Civ. Ct., Kings Cty.]; Tibout v. Coleman, N.Y.L.J., Oct. 19, 2004, pg. 20, col. 1 [Civ Ct, Bronx County].) In opposition, however, the petitioner cites a host of cases allowing it to opt-out. ( Pelham v. Formisano, 5 Misc 3d 695, 782 N.Y.S.2d 898 (App. Term, 1st Dept. 2004); 30 Eastchester v. Healy, N.Y.L.J., April 17, 2002, pg. 30, col. 5; Licht v. Moses, 5 Misc 3d 1023A, 2004 WL 2812911 (Civ.Ct., Kings Cty. 2004); Cosmopolitan v. Ortiz, N.Y.L.J., Nov. 12, 2004, pg. 20, col. 1 [Civ. Ct., Queens Cty.].) All of the cases relied on by the parties that are directly on point are from the trial court; there is no appellate authority. And as can be seen from the parties' arguments, there is a divergence of positions amongst the lower courts as to whether the petitioner may opt-out or whether the acceptance of Section 8 subsidies is a material term and condition of the parties' lease, thereby requiring the petitioner to continue in the program.
The historical and legal details of the issue now before this court have been sufficiently addressed in the aforementioned decisions, and so there is no need to fully address same herein. Suffice it to say that at the heart of the issue are two statutes, the first is not actually a statute but a 1996 repeal of the "endless lease" provision of the United States Housing Act, ( 42 U.S.C. § 1437(f)), which required Section 8 landlords to renew subsequent Section 8 leases with the tenant in perpetuity. ( See Pub.L. No. 104-134, § 203(c), 110 Stat. 1321.) And secondly is section 2522.5(g)(1) of the New York City Rent Stabilization Code ("RSC"), which provides that a renewal lease must be "on the same terms and conditions as the expired lease." (9 N.Y.C.R.R. Part 2522.5 (g)(1); Kouznetski v. Verga, N.Y.L.J., July 10, 2002, pg. 29, col 2 [Sup. Ct., Kings County].) Some courts, and NYCHA, have interpreted section 2522.5(g)(1) of the RSC to mean that once a landlord enters into a Section 8 lease with a tenant, the landlord may not opt-out of the program but must offer a renewal lease on the same terms and conditions, notwithstanding the federal 1996 amendment. ( Kouznetski v. Verga, N.Y.L.J., July 10, 2002, supra; M 1849 v. Innis, N.Y.L.J., Nov. 10, 2004, supra; Bran-Tran v. Matus, N.Y.L.J., Aug. 11, 2004, supra; Tibout v. Coleman, N.Y.L.J., Oct. 19, 2004, supra.) These courts hold that acceptance of a Section 8 subsidy is a "material term and condition," and that the 1996 amendment does not preempt this state's rent laws.
See NYCHA Memorandum dated July 22, 2003. (Annexed as Exhibit 2 to the respondent's March 1, 2004-Notice of Motion.)
Other courts, along with the Department of Housing and Community Renewal ("DHCR"), take the position that the HAP contract and the lease are two independent contracts not "inextricably merged," and unless the terms of the original lease makes reference to the Section 8 program, it cannot be a material term and condition. ( Pelham v. Formisano, 5 Misc 3d 695, supra; 30 Eastchester v. Healy, N.Y.L.J., April 17, 2002, supra; Licht v. Moses, 5 Misc 3d 1023A, supra; Cosmopolitan v. Ortiz, N.Y.L.J., Nov. 12, 2004, supra.) Given the undisputed facts herein, this court finds the holding set forth in the aforementioned cases more persuasive. The respondent herein was not a Section 8 participant at the inception of the tenancy, nor does any lease make reference to same. Moreover, even if the respondent's subsidy were terminated by NYCHA for, inter alia, failing to meet eligibility criteria, her rent stabilized lease and the protection provided for by same would still survive. Although the HAP contract ran concurrent with the respondent's lease, (Licht v. Moses, 5 Misc 3d 1023A, supra), it is a separate agreement between the local housing authority and the landlord to ensure that the respondent could meet her rental obligation. The respondent is free to transfer her Section 8 voucher to another apartment. To preclude the petitioner from opting-out of the Section 8 program at the end of lease term would contradict the intent and policy behind the 1996 amendment which repealed the "endless lease" provision of the United States Housing Act. ( Mott v. DHCR, 211 AD2d 147, 628 N.Y.S.2d 712 [2nd Dept. 1995].) As the petitioner had already "opted-out" when the instant proceeding was commenced, it was under no obligation to notify NYCHA, or identify the respondent as a Section 8 tenant, and could seek the entire rent from the respondent. Therefore, the respondent's motion is denied and the petitioner's motion is granted to the extent of amending the petition to include all current rent and setting this matter down for trial on July 28, 2005, at 9:30 a.m., part G, room 823.
See In the Matter of the Administrative Appeal of Highland Management Corp., DHCR Docket No. QB910041RO, November 6, 2002. (Annexed as Exhibit G to the petitioner's January 21, 2005-Notice of Motion.)
This constitutes the decision and order of this court, copies of which are being mailed by the Court to the parties.