Opinion
105418/2007.
Decided June 4, 2008.
Petitioner's Counsel: Jacob Rabinowitz, Attorney at Law, New York, NY.
Respondent's Counsel: Emmanuel Roy, Esq., Roy Associates, P.C., Brooklyn, NY.
Petitioner Frank Rosemberg brought this commerical holdover proceeding to recover possession of the ground floor and basement of the premises located at 599 Vanderbilt Avenue, Brooklyn, New York (the "premises"), where respondents operate a restaurant. The trial was conducted on March 31, April 1 and April 7, 2008.
After considering and evaluating the testimony of the witnesses, as well as the other trial evidence, and having had the opportunity to review the parties' post trial submissions, the court makes the following findings of fact and conclusions of law.
II. Findings of Fact:
Pursuant to a commercial lease agreement dated June 1, 2004, Teryl Dixon leased the ground floor and basement of 599 Vanderbilt Avenue, Brooklyn, New York to respondents Maria Pichardo, Freddy Filpo and Luis Brens for a period of 10 years. Mr. Dixon was the owner of the building at the time. The lease is to expire by its terms on June 1, 2014. The leased premises were to be used as a restaurant. The Courts notes that while the introductory paragraph of the lease indicates that the lease is between "Teryl Dixon ("Landlord"), and Maria Pichardo and Freddy Filpo ("Tenant"), it was signed only by respondent Luis A. Brens in his capacity as a tenant. The lease contains a provision entitled "Termination upon Sale of Premises" which provides: "Notwithstanding any other provision of this Lease, Landlord may terminate this lease upon THIRTY DAYS [sic] days' written notice to Tenant that the premises have been sold."
On September 27, 2007, Mr. Dixon executed a deed transferring his ownership of 599 Vanderbilt Avenue to the petitioner. As consideration for the transfer, petitioner executed a deed transferring his ownership of a vacate lot located at 3043 Brighton 1st Street, Brooklyn, New York to Mr. Dixon. No cash was exchanged.
Mr. Dixon testified that prior to swapping properties with petitioner, he was planning on doing a major renovation to the building which would require that the entire building be vacant for a period of approximately three months. He testified at trial that he approached the respondents and offered to pay them a sum of money if they would voluntarily leave their restaurant during the renovations. Suffice it to say, Mr. Dixon could not strike a deal with the respondents. Sometime thereafter, Mr. Dixon and the petitioner agreed to swap properties.
On October 17 and 18, 2007, after acquiring title to the premises, petitioner served respondents with written notice that their lease was being terminated pursuant to the termination clause. The notice, among other things, stated, that "[t]he undersigned is the Landlord and Owner of the above premises. On September 27, 2007, he purchased the above demised premises. You are the Tenant and Undertenants of said premises pursuant to a lease dated June 1, 2004 between Teryl Dixon as Landlord and Luis Brens, as Tenant, said lease having been assigned by Teryl Dixon to Frank Rosemberg as Landlord on September 27, 2007. . . . The owner of the property, Frank Rosemberg, hereby elects to terminate your lease and the occupancy of any subtenant, in accordance with the previously quoted provisions in the lease. Such termination is as of November 30, 2007. Please be advised that, if you do not remove yourself from the premises on or before said date, the Owner-Landlord intends to bring a holdover proceeding in the Civil Court to evict you therefrom. . . ."
When respondents continued in possession past November 30, 2007, petitioner commenced this instant holdover proceeding. Respondent Luis Brens is the only respondent who has appeared in the proceeding. In his answer, he asserted numerous affirmative defenses, the gist of which are that the transfer of ownership of the premises to the petitioner was a sham transaction. Respondent also asserted multiple counterclaims which were severed from the proceeding prior to trial.
III. Conclusions of Law:
The pivotal issue here is whether the petitioner, under the facts and circumstances of this case, had the right to terminate respondents' lease pursuant to the termination clause. Assuming that the property swap between petitioner and Mr. Dixon was a bona fide transaction, when petitioner acquired title to the premises, he acquired all the rights and liabilities that Mr. Dixon had under the lease, including those rights specified in the termination clause (Real Property Law § 223; 507 Madison Ave. Realty Co. v. Martin, 200 A.D. 146, 152, aff'd, 233 NY 683; Knutsen v. Cinque, 113 A.D. 677). The termination clause, however, did not confer upon the petitioner-purchaser the option to terminate respondents' lease in connection with his own purchase of the property. The termination clause in the lease only conferred upon the petitioner-purchaser the option to terminate the lease in the event of his subsequent sale of the premises. This interpretation is consistent with how other courts have construed similar termination clauses ( see 112 East 36 Street Holding Corp. v. Daffos, 273 A.D. 447, aff'd 298 NY 763; Scheman v. Adore Realty Corp., 117 NYS2d 884 [Sup Ct, New York County1952]; Sitt v. Fifth Ave. Realty Co., 31 Misc 2d 803, 804 [Sup Ct, New York County 1961]; Payne v. Brathwaite, 113 Misc. 517 [App Term, 1st Dep't 1920]; Krim Realty Corp. v. Varvori, 97 Misc. 407, 411 [App Term, 1st Dep't 1916]) and with the principle that contractual provisions conferring upon a party an option to terminate a tenancy must be strictly construed ( see, e.g. Leighton's Inc. v. Century Circuit, Inc., 95 AD2d 681; Greenwich Village Associates v. Salle, 110 AD2d 111, 113; A. Dubois Son v. Goldsmith Bros., 273 A.D. 306, 309, citing Matter of Loew's Buffalo Theatres, Inc., 233 NY 495).
The termination clause interpreted in 112 East 36th Street Holding Corporation was virtually the same to the one in this case and provided "that in the event of the sale of the herein demised premises, the Landlord, his heirs, successors or assigns, shall have the right to cancel this lease at his or their option, such cancellation to be effective at any time on or after August 1st, 1946, upon giving at least ninety (90) days written notice to the Tenant. . ." ( 112 East 36th Street Holding Corporation, 273 A.D. at 448).
"The right thus to be enforced is the right of the named landlord, or of any successor landlord, upon the making of a bona fide sale to give a timely and proper notice of cancellation" ( Sitt, 31 Misc 2d at 804).
In other words, the termination clause only gives the landlord who is selling the property [*4]the right to terminate the existing lease. Certainly, the termination clause can not be construed "to give the purchaser the right to cancel the lease at any time it may so desire within the prescribed term" ( Scheman, 117 NYS2d at, 885-886; citing 112 East 36 Street Holding Corp., 273 A.D. 447). If the petitioner wanted the premises vacate at the time he acquired title, he "would have had to have insisted upon a cancellation by its immediate grantor [Mr. Dixon] at the time of the sale . . . and . . . [n]ot having done so, [he] cannot claim the right to cancel as grantee by reason of the sale to him. . . ." ( 112 East 36th Street Holding Corporation, 273 A.D. at 449).
In sum, as the purchaser of the property, the petitioner did not have the right to cancel respondents' lease. Whether the transfer of title from Mr. Dixon to the petitioner was a sham is an issue that need not be addressed.
Accordingly, it is hereby
ORDERED that judgment be entered in favor of the respondents dismissing the petition.
This constitutes the decision and order of the court.