[*1]
451 Rescue LLC v Rodriguez
2007 NY Slip Op 51062(U) [15 Misc 3d 1140(A)]
Decided on March 30, 2007
Civil Court Of The City Of New York, New York County
Engoron, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on March 30, 2007
Civil Court of the City of New York, New York County


451 Rescue LLC, Petitioner,

against

Faustino Rodriguez, Respondent.




105274/06

Arthur F. Engoron, J.

The instant summary holdover proceeding probably falls under the rubric of, "If it seems too good to be true, it probably is." As the readers of this opinion likely know, the standard form lease for commercial property in New York contains a provision essentially stating (see Moving Exhibit C ¶ 17) that if a tenant defaults other than in paying rent, the landlord may serve a 15-day notice to cure; and if the tenant fails to cure within that period, the landlord may serve a 5-day notice of termination, at the end of which the lease shall expire. This provision is ubiquitous.

In the instant case, lease rider ¶ 55 (id), presumably inserted at the landlord's request (or insistence), provides as follows:

55.Default

In the event of default by Tenant of any term of the lease, breach of lease or violation of lease, Landlord shall have the unconditional right to terminate the lease on three (3) days written notice.


The inclusion of this paragraph must have seemed like a good idea at the time. No need to serve a prior ("predicate") notice; no need to allow an (allegedly) undesirable tenant the chance to cure; no need to wait all that time. Sounds too good to be true; and in one sense, it is.

The fly in the ointment is that this provision establishes a "condition subsequent" (also simply known as a "condition"), rather than a "conditional limitation." The distinction between the two may not be as difficult to understand or explain as the rule against perpetuities, but even back in 1928, in Burnee Corp. v Uneeda Pure Orange Drink Co., 132 Misc 435 (App Term, 1st Dept 1928), one court noted as follows:
As may be expected, the cases on the subject, down to our own time, abound in subtle distinctions between conditions and limitations. Ordinarily in the [*2]construction of a contract the court endeavors to get at the intention of the parties to the instrument so as to effectuate their purpose; but in the interpretation of a lease in this connection, such intention is not necessarily controlling, for if the landlord and the tenant should agree that upon the happening of a certain event the term shall end and the landlord shall be entitled to resort to the summary remedy, nevertheless, should the contingency provided for present a condition and not a limitation, the intention is nugatory.


Why all the fuss over the distinction? Because, as just alluded to, the only remedy for the breach of a condition subsequent is to bring a plenary "action to recover real property," pursuant to Article 6 of the RPAPL (essentially, a common law ejectment action), whereas for breach of a conditional limitation, a landlord may bring a "summary proceeding to recover possession of real property," pursuant to Article 7 of the RPAPL, the normal time-frame for which, as its name implies, is considerably shorter than for a plenary action. See generally, 2 Dolan, Rasch's Landlord and Tenant Summary Proceedings § 23:25, at 184-85 [4th ed].

The best authoritative but simple explanation of the theoretical and practical differences between a "condition subsequent" and a "conditional limitation" of which this Court is aware is found in Lamlon Dev. Corp. v Owens, 141 Misc 2d 287, 289-90 (Dist Ct, Nassau County 1988):

the courts have consistently recognized a distinction in the termination of a leasehold pursuant to a condition (or condition subsequent) and a conditional limitation. If a leasehold can be terminated because the tenant's breach of a condition of the lease gives the landlord the option to declare the lease at an end, thereby exercising his right of forfeiture, a condition exists pursuant to which the landlord must enforce the forfeiture by reentry in an action for ejectment. (Beach v Nixon, 9 NY 35; Perrotta v Western Regional Off-Track Betting Corp., 98 AD2d 1; 34 NY Jur, Landlord and Tenant, §§ 352, 376 [1987].) If, however, the landlord has the option to terminate the lease by serving a notice fixing a time after the lapse of which the lease will automatically expire, a conditional limitation of the leasehold exists, pursuant to which a summary holdover proceeding will lie. (Fowler Ct. Tenants v Young, 119 Misc 2d 492; Matter of Miller v Levi, 44 NY 489; Perrotta v Western Regional Off-Track Betting Corp., supra.)

The distinction, however fictitious, permitting the maintenance of a summary proceeding is based upon the lease expiring automatically so that nothing further need be done by the landlord to terminate the lease. If the tenant continues in possession after the automatic expiration of the lease, he is holding over and a summary proceeding is maintainable. (See, Besmanoff v Allen, 137 Misc 2d 706; 2 Rasch, New York Landlord & Tenant—Summary Proceedings § 747 [2d ed]; RPAPL 711 [1].)


So there you have it. A landlord has to choose between Scylla and Charybdis, between a condition subsequent, which relegates a landlord to a plenary action, and a conditional limitation, which commonly allows the tenant more time and an opportunity to cure. And the landlord must not just choose, but execute, its intention carefully: [*3]

An examination of the cases passing upon this type of conditional limitation [i.e. those pursuant to which the lease expires "upon the happening of a specified contingency; to wit the lapse of time fixed in a notice"] will show that the lease must clearly provide that the term shall automatically expire upon the lapse of time fixed in a notice sent by the landlord. Unless this precise formula is used, the courts will rule that the provision is a condition, rather than a conditional limitation.

2 Dolan, Rasch's Landlord and Tenant Summary Proceedings § 23:29, at 191 [4th ed].

In the instant case, as argued by respondent, paragraph 17, in the body of the lease, constitutes a classic conditional limitation; and paragraph 55, in the rider of the lease, constitutes a classic condition subsequent (for one thing, it does not pass the test set forth by Rasch immediately above). As petitioner has brought a summary proceeding predicated upon a termination pursuant to the latter, the court lacks subject matter jurisdiction; respondent's motion to dismiss is granted; all other issues need not be and are not addressed; and the clerk is hereby directed to enter judgment dismissing the instant proceeding without prejudice.

Dated:March 30, 2007

Arthur F. Engoron, J.C.C.