In 1400 Broadway Associates v. Henry Lee and Co. of NY, Inc.,1 the parties’ commercial lease expired January 31, 1990 and the tenant, who did not realize the lease had expired, continued to make monthly rent payments, in the amount set forth in the expired lease, for six months. The tenant learned that the lease had expired during negotiations for a new lease and during the negotiations continued to pay rent through October 1992. Tenant then stopped making monthly rent payments and landlord commenced a nonpayment proceeding. Tenant moved for summary judgment to dismiss the complaint for failure to state a cause of action. The Court granted the motion holding that a nonpayment proceeding could not be maintained against a month-to-month tenant because, “absent a meeting of the minds, no agreement exists regarding the monthly rental rate.” The Court held:
A month-to-month tenancy, by its nature, is renewable by the parties’ conduct, i.e., by continued payment and acceptance of agreed-upon amounts each month. When the parties no longer agree to continue the relationship, either party can terminate it. However, if the tenant does not voluntarily surrender, the owner must serve a statutory notice of termination at least 30 days before expiration of the monthly term, as a condition to bringing a holdover proceeding.
Thus, the Court held that “Petitioner’s acceptance of respondent’s monthly payments created a month-to-month tenancy, by operation of law, which could be terminated only by service of a 30-day notice.” A 30-day termination notice, the predicate to commencing a holdover proceeding against a month-to-month tenant, was not served and therefore a holdover proceeding was not possible.
The Court concluded that:
[t]o permit petitioner to maintain a nonpayment proceeding under these circumstances, seeking payment at the lease rate, would permit a landlord unilaterally to bind a tenant to payment at a rate predicated on a continuing agreement, even though there no longer was a meeting of the minds. Such a result would vitiate the intent of RPL §232-c.
RPL 232-c provides:
Where a tenant whose term is longer than one month holds over after the expiration of such term, such holding over shall not give to the landlord the option to hold the tenant for a new term solely by virtue of the tenant’s holding over. In the case of such a holding over by the tenant, the landlord may proceed, in any manner permitted by law, to remove the tenant, or, if the landlord shall accept rent for any period subsequent to the expiration of such term, then, unless an agreement either express or implied is made providing otherwise, the tenancy created by the acceptance of such rent shall be a tenancy from month to month commencing on the first day after the expiration of such term.
The Court’s analysis has been generally accepted.2 But, in Tricarichi v. Moran3 the Appellate Term reversed an oral order dismissing a nonpayment proceeding brought against month-to-month tenants and in its decision explicitly rejected the analysis set forth in 1400 Broadway Associates v. Henry Lee and Co. of NY, Inc.
In Tricarichi, the Appellate Term specifically held:
Real Property Law §232-c is inapplicable to month-to-month tenants, since the term of a month-to-month tenancy is not ‘longer than one month.’
The Court explained that:
Real Property Law §232-c did not abolish a landlord’s right to elect to hold a month-to-month tenant for a new term solely by virtue of his holding over. Indeed, the requirement of Real Property Law §232-b –that both a landlord and a tenant wishing to terminate a month-to-month tenancy must give a month’s notice — remains unaffected by the subsequent enactment of Real Property Law §232-c. Here, both the making of a rent demand by landlord and the commencement of a nonpayment proceeding constitute an election by landlord to treat the holdover tenants as tenants for a new term and not as trespassers (see Friedman on Leases §18:4). Their month-to-month tenancy continues on the same terms as were in the expired lease, if, in fact, the lease has expired.
This statutory analysis by the Appellate Term, at least in the 9th and 10th Judicial Districts and until a higher court weighs in, permits a landlord to commence a nonpayment proceeding against a holdover month-to-month tenant. The obvious benefit to a landlord is time. Rather than being compelled to serve a 30-day termination notice to terminate a month-to-month tenancy under RPL §232-b before commencing a holdover proceeding, the landlord may now commence a nonpayment proceeding against a month-to-month tenant upon making an oral demand for rent or serving a 3-day written demand under RPAPL §711(2).
1 161 Misc.2d 497, 614 N.Y.S.2d 704 (NYC Civ. Ct., NY Co. 1994)
2 See, Krantz & Phillips, LLP v. Sedaghati, 2003 N.Y. Slip Op. 50032(U) (App. Term 1st Dep’t 2003)
3 2012 N.Y. Slip Op. 22395 (App. Term, 9th & 10th Judicial Districts 2012)