This Summary Holdover Proceeding was commenced by Notice of Petition and Petition of Petitioner/Landlord Macleay Woods Housing Company, Inc. ("Petitioner" or "Landlord") dated May 2, 2006. Petitioner, a non-profit corporation, is a Section 8 landlord where tenants are exclusively those who receive Section 8 assistance with their rental payments. The alleged basis of the holdover proceeding is a notice of termination dated March 10, 2006 which purported to terminate respondent/tenant Patricia Franks' ("Tenant" or "Respondent") tenancy as of April 30, 2006 (the "Termination Date"). The notice charged, in essence, that members of Tenant's household had engaged in criminal or otherwise unlawful activity on the Petitioner's premises (the "Notice of Termination").

At the first court appearance of the parties on May 16 , 2006, Petitioner requested and was granted permission by the Court to accept rental payments from Tenant and the Section 8 administrator without prejudice to its right to maintain this proceeding. It is undisputed that prior to the initial court date, Petitioner received and retained both Tenant's share and the Section 8 share of Tenant's rental payments for the months of March and April, 2006. It is also undisputed that Petitioner initially received and deposited in its account the Section 8 payment — contained in a bulk check that included rental assistance for numerous other tenants as well — [*2]and the instant Tenant's personal share of her rent for the month of May, 2006 (the "May Payment") but then returned them to Tenant and Section 8 respectively within approximately 14 days of their initial receipt.

After several conferences with the Court in an effort to amicably resolve the matter failed to bear fruit, Tenant moved to dismiss the Petition on several grounds including, most prominently, the ground that the Notice of Termination had been vitiated by Petitioner's alleged acceptance of rental payments after the Notice of Termination had been served. By Decision and Order dated March 13, 2007 (the "Decision and Order") the Court dismissed the Petition "[b]ecause Petitioner herein accepted Respondent's rent payments for at least two months after serving the notice of termination." (Id., p. 3).

Petitioner has now moved to reargue the Decision and Order pursuant to CPLR 2221(d). Petitioner contends that the Court misapprehend the applicable law by appearing to hold that any rental payments made by a tenant and accepted by a landlord after a the notice of termination is served renders the notice of termination a nullity and mandates dismissal of the summary holdover proceeding. Petitioner argues that only a payment that applies to the time period after the date of termination set forth in the notice will have such an adverse effect on the proceeding, and even a payment made at that late date will not compel dismissal as long as, once received, it is promptly returned to the tenant and landlord had a reasonable excuse for having accepted it in the first place. In the instant case, only one such payment the May Payment was made, and as noted above, both segments of it were returned to Tenant within approximately 14 days of their receipt by Petitioner.

Not surprisingly, Tenant disagrees with Petitioner's analysis and maintains that the Court's original Decision was correct. Tenant contends that any post-notice of termination payment as opposed to a post-termination date payment - invalidates the notice and requires dismissal of the proceeding. Tenant also contends that, in any event, Petitioner's acceptance of the May Payment and retention of it for 14 days, standing alone, constitutes sufficient grounds to require dismissal.

Upon further review of the undisputed facts and circumstances as set forth in the parties' papers and the applicable law, the Court holds that for the reasons set forth below, Petitioner has the better of the argument, its motion to reargue is granted, and upon reargument Respondent's motion to dismiss is denied in all respects.

Discussion:

The law is reasonably clear that in the context of a summary holdover proceeding, a landlord may, without affecting its right to maintain the proceeding, accept rent from its tenant after a notice of termination is served and before the proceeding is actually commenced as long as the payment pertains to the period prior to the date of termination as set forth in such notice. The reason behind this rule is evident: until the noticed date of termination, the tenancy continues by its terms, and the tenant's right to be in possession is unchallenged. See Amalgamated Housing Corp. v. Luxenberg, 8 Misc 2d 831, 833 (Municipal Ct., NYC 1957); Dolan, Rausch's Landlord and Tenant,  23:52 (4th Ed. 1998) ("After a landlord has given notice of election to terminate a lease, he may then accept rent for periods prior to the termination of the term.").

A landlord's acceptance of rent for the time period following the purported termination date, however, will vitiate the notice because it "sends the tenant a message contrary to that [*3]contained in the notice." As the New York City Civil Court reasoned in Associated Realties v. Brown, 146 Misc 2d 1069, 1070-1071 (Civ. Ct., NY Co. 1990),

"The acceptance of rent for a period after expiration of the notice sends the tenant amessage contrary to that contained in the notice. . . . On the one hand landlord requirestenant to leave, and on the other, accepts rent for a period after surrender is demanded.This can easily imply to tenant that she need not surrender the premises, but may continuein possession. By such acceptance of rent for the period between the expiration of thenotice and commencement of the proceeding, landlord therefore nullified the effect of thenotice".

(Emphasis supplied).

See also, e.g. Roxborough Apartment Corp. v. Becker, 176 Misc 2d 503, 504 (Civil Ct., NYC. 1998); Dolan, Raush's Landlord and Tenant,  23:52 (4th ed. 1998). This result obtains unless, at the time the rent was accepted, the adversary proceeding has already been commenced. (RPAPL  711; Dolan, Raush's Landlord and Tenant,  23:52 (4th Ed. 1998).

In this case, it is undisputed that Petitioner received Tenant's rent, both from her and Section 8, after the Notice of Termination was served, but only one such payment the May Payment pertained to the period after the Termination Date as set forth in the Notice. Accordingly, any prior payments were permissibly accepted and retained by Petitioner without adverse consequences to its maintaining this proceeding. Moreover, shortly after the instant summary proceeding was commenced, Petitioner obtained the Court's permission pursuant to RPAPL  711 to accept ongoing rental payments from Tenant and the Section 8 administrator without prejudice to its ability to maintain this proceeding..

The issue on the instant motion thus boils down to whether Petitioner's receipt of the May Payment as tendered by both Tenant and Section 8 on her behalf constitutes an "acceptance" of post-termination rent that vitiates the Notice of Termination when it is undisputed that Petitioner returned the payments made by both Tenant and the Section 8 program administrator approximately 14 days after they were received.

To be sure, a landlord may not accept post-termination rental payments and retain them indefinitely without suffering the consequence of dismissal. See, e.g., Dulac v. Moy, NYLJ, Nov. 4, 1992 at 28, col.) (Civil Ct, N.Y.Co.); Mannino v. Figueroa, NYLJ, Nov. 22, 1995 at 31, cols 1, 2 (Civil Ct. Kings Co. ); St. Luke's/Roosevelt Hospital Center v. Taft Pharmacy, NYLJ, May 10, 1995 at 31, col 5 (Civil Ct. N.Y.Co. 1995). By the same token, mere receipt even to the point of cashing such rent payment checks for the post-termination period does not inexorable lead to dismissal. Such a drastic result may be avoided if the landlord either promptly returns the checks uncashed, or if inadvertently cashed, makes prompt reimbursement as long as there is a reasonable explanation as to why such payments were accepted in the first place.

For example in Roxborough Apartment Corp. v. Becker, 176 Misc 2d 503 (Civil Ct. N.Y.Co. 1998), the landlord in a summary holdover proceeding received and retained uncashed three rent checks for the months after the purported termination of respondent's tenancy, but before a summary proceeding had been commenced. Since petitioner "never returned the checks to respondent and has not claimed that the receipt and retention of the checks were inadvertent in any way" (id. at 506), the Court held that the landlord had accepted rent during the proscribed [*4]period and therefore dismissed the proceeding. However, the Court acknowledged the principle that if the rental checks for the prohibited post-termination and pre-proceeding period are tendered and even cashed a return of them along with a reasonable excuse for their inappropriate initial receipt will not constitute "acceptance" of payment that would otherwise mandate dismissal. As the Roxborough Court stated:

Thus, the only real issue in this case is whether petitioner's receipt and retentionof three rent checks constitutes "acceptance" of rent sufficient to vitiate the predicatenotices.

A landlord's mere receipt of rent checks does not alone constitute acceptance,especially where the landlord promptly returns the checks uncashed, or where the rentchecks although cashed, were accepted inadvertently and the landlord promptly explainsthe inadvertence to the tenant. Thus, courts have refused to find that a landlord"accepted" rent checks sufficient to vitiate the predicate notice where the rent isunknowingly received through a lock box (see, e.g., Metropolitan Life Ins. Co. v. Sucdad,NYLJ, Aug. 6, 1985, at 6, col 1 [App Term, 1st Dept.]), or where the rent is acceptedinadvertently and the landlord returns the checks uncashed to the tenant withoutunreasonable delay (see, e.g., Pacer Realty Assocs. v. Bishop, NYLJ, Dec. 12, 1996, at 29,col 1 [App Term, 1st Dept]).

(Emphasis supplied).

Cf. 205 E. 78th Street Associates v. Cassidy, 192 AD2d 479 (1st Dept. 1991), reversing on dissent of Judge McCooe, NYLJ, Sept. 23, 1991, at 21, cols. 4, 5 (Proceeding dismissed when landlord deposited tenant's check "inadvertently" but made no attempt to explain the inadvertanence or return the check or its proceeds to tenant); Mannino v. Figueora NYLJ Nov. 22, 1995 at 31 cols 1,2 (Civil Ct. Kings Co.) (Landlord retained checks for two weeks and offered no explanation for their retention); Dulac v. Moy, NYLJ, Nov. 4, 1992 at 2d, col. 1 (Civil Ct. N.Y.Co.) (Acceptance found where landlord received and retained 10 monthly rent checks)

Here, the Petitioner received the checks from both Tenant and Section 8 administrator for the period commencing May 1, 2006, cashed them, but returned the proceeds of both approximately 14 days later. In view of the nature of this particular landlord, and the manner in which it receives the lion's share of rental payments from its tenants, the Court finds that the delay was not unreasonable under the circumstances and should not serve as a basis for vitiating the Notice of Termination.As Petitioner points out and Tenant must concede, Petitioner is essentially a Section 8 landlord, with over 200 rental units and literally hundreds of tenants under its several roofs. The Court also takes judicial notice of the nature and purpose of Petitioner and the salutary goal it seeks to achieve providing affordable housing for tenants with limited or no income. Such landlords, by and large public or quasi-public entities, as Petitioner is here, typically operate on a limited budget, serve numerous tenants and, as here, receive the bulk of their revenue via lump sum payments from a governmental entity — bulk payments that cover many if not all of its apartments together.

With respect to Petitioner herein, the vast majority of its monthly rental revenue is derived from one all encompassing check it obtains periodically from the Section 8 program, covering literally scores of tenants. To require a landlord so situated to reject such an omnibus check would potentially jeopardize its financial health and thereby its ability to provide shelter for its other low income tenants. Similarly, it would prove, to say the least, administratively [*5]burdensome for such a landlord to immediately identify one among hundreds of payments from individual tenants, particularly when such payments are relatively minor here $134.00 when compared to the substantial, bulk payment it receives through Section 8.

Thus, the rule as articulated by the Courts in Roxborough, Metropolitan Life v. Sucdatt, and other cases cited above that permits a landlord to initially receive, then reject and return, payment from a putative holdover tenant without suffering the pain of dismissal as long as a reasonable excuse for so doing is discernable applies with even more force to landlords similarly situated to Petitioner herein. If a private landlord, the rental payment of whose tenant is readily identifiable and constitutes full monthly payment of the rental amount, is afforded the excuse of reasonable misapprehension should it receive and then promptly return, a post-termination payment, then a public entity, the rental share of whose tenant is comparatively minuscule, should be afforded an even greater benefit of the doubt. Indeed, to hold, as Respondent herein suggests, that any post-termination late payment requires dismissal would at once effectively prevent similarly situated public landlords from prosecuting many holdover cases, however justified, by imposing a standard they could rarely meet, and contravene the overarching judicial policy in favor of resolving disputes on the merits.

Parenthetically, the Court notes that the Nassau County case of Greenwich Gardens Associates v. Pitt, 126 Misc 2d 947 (Dist. Ct., Nassau Co. 1984), relied upon by Tenant, is not to the contrary. In Greenwich, the Court held that a payment by the Section 8 Administrator to the landlord constitutes rent, the acceptance of which, post-termination, will vitiate a holdover proceeding. However, in that case — unlike here — the Section 8 landlord made no attempt to return the rent to the administrator. Here, Petitioner initially received, then promptly returned both the Tenant's and Section 8's share of the May Payment, after it had been culled from the omnibus Section 8 check. Greenwich thus proves inappropriate.

In the instant case, it is undisputed that the Tenant's May Payment, both tendered by Tenant herself and Section 8, that pertained to the post termination period were promptly returned once identified by Petitioner a process that took roughly 14 days. Under the circumstances described above and in the motion papers, the Court finds that such a delay was not unreasonable, and that the Petition should not be dismissed on that ground. The other grounds for dismissal raised by Tenant present issues of fact that can be resolved at trial.

Accordingly, Petitioner's motion to reargue the Court's Decision and Order dated March 13, 2007 is granted, and upon reargument, Respondent/Tenant's motion to dismiss is denied in all respects. The parties are directed to appear at 9:30 a.m. on September 27, 2007 for further proceedings.

The foregoing constitutes the Decision and Order of this Court.

DATED: New Rochelle, New York

September 7, 2007

____

John P. Colangelo

City Court