Manhattan Avenue Assocs. v. Lenox Hill Hosp., 77 N.Y.2d 938 (1991)
In rent-stabilized tenancies, a landlord seeking to deny a renewal lease based on non-primary residence must strictly comply with the notice requirements of the Rent Stabilization Code; failure to do so entitles the tenant to a renewal lease.
Summary
Manhattan Avenue Associates sought a declaratory judgment to avoid offering a renewal lease to Lenox Hill Hospital, arguing the hospital wasn’t using rent-stabilized apartments as primary residences but subletting them to employees. The landlord claimed a 1984 statute allowing hospitals to sublet these apartments was an unconstitutional taking of their property. The Court of Appeals held that the landlord failed to provide timely notice as required by the Rent Stabilization Code, entitling Lenox Hill to a renewal lease. The Court emphasized that the procedural rules must be followed regardless of the landlord’s legal theory or form of action.
Facts
Lenox Hill Hospital was the tenant of record for rent-stabilized apartments owned by Manhattan Avenue Associates. The hospital sublet these apartments to its employees. Manhattan Avenue Associates sought to avoid offering a renewal lease, arguing that Lenox Hill was not using the apartments as primary residences. A 1984 New York statute authorized not-for-profit hospitals to sublet rent-stabilized apartments to employees.
Procedural History
Manhattan Avenue Associates initiated a declaratory judgment action in Supreme Court, seeking relief from the obligation to offer Lenox Hill Hospital a renewal lease. The Supreme Court ruled in favor of Lenox Hill Hospital. The Appellate Division reversed. The New York Court of Appeals reversed the Appellate Division and reinstated the Supreme Court’s order.
Issue(s)
Whether a landlord seeking to deny a tenant a renewal lease on the grounds of non-primary residence must adhere to the notice procedures set forth in the Rent Stabilization Code, regardless of the form of action (e.g., declaratory judgment) or the legal theory asserted (e.g., unconstitutional taking).
Holding
Yes, because when a landlord claims a tenant isn’t using an apartment as a primary residence, they must follow the notice procedures in the Rent Stabilization Code to deny a renewal lease.
Court’s Reasoning
The Court of Appeals emphasized the importance of adhering to the procedural requirements of the Rent Stabilization Code when a landlord seeks to deny a tenant a renewal lease based on non-primary residence. The Court cited Crow v. 83rd St. Assocs., 68 NY2d 796 and Golub v. Frank, 65 NY2d 900, underscoring that the owner must provide notice of their intention not to offer a renewal lease within a specific timeframe (120-150 days before the lease expiration) as per former section 54(E) of the Rent Stabilization Code (9 NYCRR 2524.4[c]).
Because Manhattan Avenue Associates conceded they did not provide the requisite notice, Lenox Hill was entitled to a renewal lease. The Court explicitly stated: “Inasmuch as plaintiff concededly did not give Lenox Hill the requisite notice, Lenox Hill is entitled to a renewal lease for each of the subject apartments.”
The Court further reasoned that the form of action (declaratory judgment) and the landlord’s legal theory (unconstitutional taking) were irrelevant to the requirement of following proper notice procedures. As the Court stated, “Since the gist of plaintiff’s claim is that it should not be obliged to offer Lenox Hill a renewal lease because of Lenox Hill’s alleged failure to use the subject apartments as ‘primary residence,’ the procedural rules set forth in former section 54 (E) of the Rent Stabilization Code must be observed.”