The instant holdover proceeding was commenced on or about September 13, 2006, with the filing of the Notice of Petition and Petition, by the petitioner, Valley Dream Housing Company, Inc. (a/k/a Monica Village) (hereinafter referred to as "VDH"), seeking to evict Donna Lupo from its Section 8 "New Construction" premises. The respondent, Donna Lupo opposes the eviction.

This matter was heard by the Court on submitted facts, as well as by way of oral arguments and conferences. The parties in this proceeding share quite an acrimonious history. This proceeding is the second attempt by VDH to evict Ms. Lupo from its Section 8 "New Construction" facility, since 1998.

The issue before this Court is whether or not the respondent, Donna Lupo, is entitled to remain a tenant of VDH's Monica Village facility.

The petitioner asserts that Ms. Lupo has no right to possession of the premises as she [*2]has waived her succession rights. Nor does she independently qualify for residency in VDH as she is not 62 years of age nor is she mobility impaired. In addition, petitioner alleges that Donna Lupo never applied, nor has she been listed as a tenant at the premises. The petitioner further acknowledges that Ms. Lupo was only entitled to remain at VDH premises, so long as she continued as a Live-in-Aide to her mother. Once Donna Lupo's mother vacated the premises, VDH alleges that Donna Lupo's entitlement to remain at VDH terminated, as supported by the "Live-in-Aide/Release of Succession Rights Agreement" signed by Ms. Lupo.

The respondent, Donna Lupo, alleges that she qualifies for succession rights to her mother's VDH unit as either a "remaining family member of a tenant family" or a member of an "elderly family" of a section 8 unit. In addition, she alleges that elderly tenants can add members to their lease during tenancies and that these additional younger members may succeed to the tenancy as remaining family members of a tenant family after the original tenant is no longer in possession. In the alternative, the respondent alleges that she qualifies as a tenant based upon VDH's tenant selection procedures which designates that mentally as well as physically disabled individuals are eligible for occupancy in the VDH facility.

VDH is the owner and operator of a Section 8 "New Construction" housing complex, governed by the Division of Housing & Community Renewal (hereinafter DHCR) and Housing & Urban Development (hereinafter HUD) rules and regulations, which is located in Valley Stream, New York. The complex was completed in 1976 and is comprised of 191 rental units; 187 units for the elderly and 4 for those with mobility impairments. Notably, VDH sought HUD Section 202 financing, however, HUD denied VDH's application. However, VDH was operating under the mistaken belief that it was, in fact, approved to operate as a HUD 202 project. This mistake was discovered in a prior summary proceeding of the parties under index number SP1718/02. The proceeding under index number SP1718/02 was dismissed by the Appellate Term for a failure of the petitioner to name the lessee, Agnes Schmidt, pursuant to RPAPL §711.

In January 1985, Agnes Schmidt and her husband, Donna Lupo's parents, applied for an elderly low income unit in VDH, naming their daughter, Donna Lupo, as a possible tenant or resident. They were placed on a waiting list, until October 15, 1990, when a unit became available. Agnes Schmidt moved into the unit alone since her husband had died in the interim and Donna Lupo was not living with her mother at the time. Donna Lupo was not listed as a member of Agnes Schmidt's household when Agnes Schmidt moved into the unit.

Donna Lupo moved in with her mother on or about July 1997 and the petitioner was notified by Agnes Schmidt. However, VDH refused to add Donna as a named tenant on the [*3]lease. The lease and all subsequent lease renewals only list Agnes Schmidt, as the tenant and Agnes is classified as the head of the household in the annual re-certifications. Notably, from 1997 to 2000, Donna Lupo moved in and then out of her mother's unit. Beginning in September 1997, Agnes Schmidt's mental capacity began to diminish and by October 1999, she was diagnosed with dementia. Therefore, her doctor continued to advise VDH that she required monitoring and would benefit from her daughters care. As a result of her mother's declining health, Donna Lupo moved back in with her mother. In August 2000, VDH agreed to allow Ms. Lupo to reside in the unit as her mother's live-in aide. Ms. Lupo executed a written waiver entitled "Release of Succession Rights", whereby she agreed to relinquish her rights as a remaining family member upon her mother's vacatur of the unit.

"Commencing January 1, 1998, petitioner included respondent's Social Security benefits of $7,510 a year in the family income of Agnes Schmidt, but not for the period commencing May 1, 1998, Oct 1, 1999, and did include $8,346 of such income for the period commencing September 1, 2000 and $8,640 of such income for the period commencing October 1, 2001" (see, Stipulation of Facts, ¶h). Ms. Lupo vacated the premises on or about March 3, 2000, but again re-occupied the premises with her mother on August 28, 2000.

On or about March 3, 2002, Agnes Schmidt vacated the VDH premises to reside permanently in a nursing home. Agnes Schmidt was assigned a guardian ad litem and the guardian entered into a stipulation on behalf of Agnes in this matter. The stipulation states in part: "Agnes Schmidt vacated the premises without intent to return about March 2002 and makes no claim of possession and surrenders whatever leasehold interest she may have in the premises as of March 2002."

The underlying purpose of the Section 8 program, is to provide affordable, decent, safe housing "through the private sector to certain lower income' families, the elderly and the disabled", with federal funding (see, Morrisania II Associates v. Harvey, 139 Misc 2d 651, 655 [Civ Ct NY, Bronx County 1988] citing Housing and Community Development Act of 1974, Pub L93-383, adding 42 USCA 1437f; see also, Evans v. Franco, 93 NY2d 823 [1999]). The Section 8 program is governed by federal statutes and regulations and policies promulgated by HUD. State law is also applicable to Section 8 tenancies, unless preempted by federal statute or regulation or unless state law is in conflict with Section 8 rules and regulations (see, Mott v. New York State Division of Housing and Community Renewal, 211 AD2d 147 [2d Dept 1995]).

In order to be entitled to the protections and benefits of a Section 8 tenancy, a tenant is responsible for "maintain[ing] statutory eligibility requirements and complying with the obligations of tenancy" (see, Morrisania II Associates v. Harvey, supra at 655). Section 8 [*4]provides protection to all members of the family occupying an apartment. "The section 8 program recognizes the entire family as the tenant, entitled to occupancy and assistance" (see, supra ). The reason for this is that the program seeks to encourage "family cohesion" (see, supra at656).

Under the provisions of 24 CFR 880.504(a) and 24 CFR 880.601, the owner of a complex that signs a contract to provide Section 8 housing must develop a marketing plan and promulgate rules and procedures to determine the eligibility of applicants to live in the complex and to make units in the complex available to qualified applicants.

"In consideration for the receipt of Section 8 assistance, the HAP Contracts impose certain general obligation on the owners of assisted properties including; (I) the leasing of assisted units to Section 8 income eligible families, (ii) the maintenance of the project as decent, safe and sanitary housing for the residents; (iii) compliance with applicable nondiscrimination and equal employment opportunity requirements, (iv) compliance with Section 8 reporting, management and accounting requirements, and (v) the procurement of the prior written approval of HUD and the Contract Administrator to any transfers of the project or any portion thereof and any assignment of the HAP Contract." (see, http://www.hud.gov/officer/hsg/mfh/rfp/s8bkinfo.cfm)

More specifically, in addition to complying with the requirements above, the owner of a subsidized unit must reexamine the income and composition of the family at least every 12 months to determine if the tenant continues to be eligible for Section 8 subsidized housing and so that the amount of the subsidy required can be calculated (see, 24 CFR 880.603[c]). Income includes the full amount of Social Security or Social Security Disability benefits received by the tenant and members of the tenant's family who reside in the unit (see, 24 CFR 5.609[c][5]).

A required clarification in the present case, is the distinction between two categories of section 8 housing: "Section 8 New Construction" and "Section 202 Supportive Housing for the Elderly Program". VDH operated as a "Section 202" facility until 2002 when it realized that it was in fact a section 8 "New Construction" facility. The distinctions are as follows.

Under Section 8 "New Construction", HUD provides "rental assistance in connection with the development of newly constructed or substantially rehabilitated privately owned rental housing financed with any type of construction or permanent financing ... " (see, http://www.hud.gov/offices/hsg/mfh/rfp/s8bkinfo.cfm). Tenant selection is considered to be the responsibility of the owner of an "assisted mortgaged property, subject to compliance by such owner with the applicable income eligibility criteria and certain occupancy requirements, including those pertaining to projects designated for elderly and non-elderly [*5]disabled families" (supra ).

A Section 202 program ensures that there is affordable housing with supportive services for the elderly (see, http://www.hud.gov/offices/hsg/mfh/progdesc/eld202.dfm). It provides very low-income elderly with options that allow them to live independently but in an environment that provides support activities such as cleaning, cooking, transportation, etc. (supra ). The program is similar to Supportive Housing for Persons with Disabilities (supra ). HUD provides capital advances to finance the construction, rehabilitation or acquisition with or without rehabilitation of structures that will serve as supportive housing for very low-income elderly persons, including the frail elderly, and provides rent subsidies for the projects to help make them affordable" (supra ).

As required for a Section 8 "New Construction" facility, VDH developed a marketing and eligibility plan. The eligibility plan required all potential residents to file an application. After the apartments had been filled, all future potential resident's applications were logged chronologically. As apartments became available, eligible applicants would be given apartments. Pursuant to the "Selection Preferences" section of VDH's Selection Procedures, it states:

H. Families will be selected on a first-come, first-served basis, as they appear in the log chronologically, taking into account all HUD-eligibility criteria and mandatory preferences in effect at the time of tenant selection ^[FN1].

B.Donna Lupo is a "Remaining Member of a Tenant Family"and Receives Succession Rights for Agnes Schmidt's Unit

Pursuant to the VDH residency rules, residence in the complex is limited to elderly persons ^[FN2], elderly households ^[FN3], handicapped ^[FN4], disabled ^[FN5], live-in aide/attendant ^[FN6], displaced [*6]persons ^[FN7] who meet the other HUD eligibility requirements. Generally, the regulation for Section 8 housing creates three classes of household: (1) elderly and handicapped; (2) family; and (3) large family (24 CFR 883.302). For the purposes of this analysis, the Court will adopt the general definitions for all Section 8 housing under 24 CFR 5.403. The federal regulations define the term "Family" as:

Family includes but is not limited to:

(1) A family with or without children (the temporary absence of a child from the home due to placement in foster care shall not be considered in determining family composition and family size):

(2) An elderly family;

(3) A near-elderly family;

(4) A disabled family;

(5) A displaced family;

(6) The remaining member of a tenant family; and

(7) A single person who is not an elderly or displaced person, or a person with disabilities, or the remaining member of a tenant family (see, 24 CFR 5.403). [emphasis added]

In order to be a recognized family member, the federal regulations require that "[t]he composition of the assisted family residing in the unit must be approved by the PHA ... The family must request Public Housing Assistance (hereinafter PHA) approval to add any family members as an occupant of the unit. No other persons [i.e., nobody but members of the [*7]assisted family] may reside in the unit" (see, 24 CFR 982.551[h][1]). Although this section is contained in the tenant based subsidy program regulations, it also applies to project based subsidized units pursuant to 24 CFR 983.2. The HUD Occupancy Handbook requires an eligible remaining family member to be a party to the lease when the family member leaves the unit (see, HUD Handbook 4350.3 [3-15]).

The definition of family includes the phrase "remaining member of a tenant family" (24 CFR 5.403[6]). While this phrase is used, it is not defined by either relevant statutes or regulations (see, 42 USC 1437a[b][3][c]; 24 CFR 5.403; see also, NSA North Flatbush Assoc. v. MacKie, 166 Misc 2d 446 [Civ Ct NY, Kings County 1995])). Therefore, this term should be given its normal and ordinary meaning (Morrisania II Associates v. Harvey, 139 Misc 2d 651; see also, State of New York v. Patricia II., 6 NY3d 160 [2006]). A "remaining member of a tenant family" is a member of the named tenant's immediate family, such as a child or grandchild, who has resided in the unit with the named tenant for a substantial period of time prior to the time that the named tenant dies or can no longer live in the unit (see, Morrisania II Associates v. Harvey, supra , cf. New York City Housing Authority v. Nesmith, 100 Misc 2d 414 [Civil Ct, NY Cty 1979]).

The term "family" includes an elderly family. An "Elderly family" is defined as follows:

"Elderly family ^[FN8] means families whose heads (or their spouses) or whose sole members are persons who are at least 62 years of age .... The Elderly families includes two or more elderly, disabled, or handicapped individuals living together, one or more such individuals living together with another person who is determined under regulations of the Secretary of Housing and urban Development ("Secretary") to be a person essential to their care or well being" (see, VDH Annual Contributions Contract, §2.1[b]).

The ability to succeed to a previous tenant's tenancy by way of the parties' relationship (i.e., remaining family members), is referred to as "succession rights". Succession rights have been recognized based upon federal statutes defining "family" and "elderly family", which suggests generally that a "remaining member family" may be entitled to a Section 8 tenancy. Succession rights have been recognized in various Court decisions and in Federal [*8]dicta. However, the Federal regulations are silent with regard to succession rights (see, NSA North Flatbush Assoc. v. MacKie, supra ; citing, Church Home Assoc. v. Bostick, NYLJ Sept. 19, 1990 [Civ Ct NY County]). Furthermore, New York State law is also silent with regard to succession rights. As a result, case law has been inconsistent at best.

The general trend has been to analyze each "remaining family member's" succession claims on a case- by- case factual basis. " ... [N]o one factor is completely determinative with regard to whether a relative may succeed to the rights of a Section 8 tenant when that tenant permanently vacated" (NSA North Flatbush Associates v. Mackie, 166 Misc 2d at 453). Rather, "[w]hat is dispositive is whether the respondent can make a showing, under the totality of the circumstances ... " that she is entitled to succeed to the tenancy (supra ). Factors that have been considered to determine succession rights are whether: the parties are living together as a family unit, the length of time the parties were living together, whether the individuals' income was factored into the annual certifications, and whether the family member was listed on the lease (see e.g., supra ).

For example, in 328-36 West 53rd Street Redevelopment v. Kosciuczuk, NYLJ 2/25/04, 27:1 (Civ Ct, NY Co, cited by, Upaca Site 7 Assoc. v. Hunter-Crawford, 2006 NY Slip OP 50887[U] [Civ Ct, NY Co 2006]), a daughter moved into a project based Section 8 unit to care for her ailing mother. She was never included in any of the income certifications and sought to succeed to the premises. The Court held that the occupant could not succeed to the apartment despite her proof of co-occupancy because she was never listed on the income certifications. The Court discussed the policy reasons for such a result including the possibility of fraud and the fact that possession of the unit without the subsidy would in effect remove the premises from the Section 8 program because possession and the subsidy could not be "teased apart" (see, 328-36 West 53rd Street Redevelopment v. Kosciuczuk, supra ).

However, the Appellate Term of the First Department has addressed the issue of succession to a project based Section 8 apartment by someone not listed on the income certifications. In 2013 Amsterdam Avenue Housing Associates v. Estate of Almeda Wells, 2006 NY Slip Op 50084[U] (App Term 1st Dept 2006), the Court held that "the absence of [an occupant's] name on the family composition document was not fatal to her succession claim otherwise established by the trial evidence". The Appellate Term's decision in 2013 Amsterdam Avenue Housing Associates v. Estate of Almeda Wells, supra , cautions lower courts to follow such decisions and precedents of higher courts (see also, Prestipino v. Matarazzo, 99 NYS2d 606 [App Term 1st Dept 1950]).

In the instant case, VDH made numerous inconsistent and incorrect attempts to prevent Donna Lupo from residing in VDH. Notwithstanding these attempts, Donna Lupo still retains succession rights for her mother's unit. Donna Lupo is the daughter of Agnes [*9]Schmidt. Agnes Schmidt entered the VDH "New Construction" facility as a legitimate and qualified tenant pursuant to the selection procedures of VDH (i.e. She was elderly and was low income). In July of 1997, Donna Lupo moved in with her mother and they requested that VDH add Donna Lupo to the lease. VDH refused. However, VDH it appears refused to add Donna Lupo based upon the fact that it believed that it was operating solely as an elderly facility pursuant to Section 202, it was mistaken.

VDH rejected Agnes Schmidt and Donna Lupo's request to add Donna Lupo to the lease without any substantial justification. VDH's tenant selection procedures states that "Rejections/Ineligibility" follow the procedure below:

"Applicants will be rejected if they fail to meet any HUD eligibility requirements with regard to income limits, family definition, and family composition. In addition, applicants will be rejected if they do not meet the project owner's screening criteria. Applicants may be rejected for any of the following reasons:

(1) History of violence as evidenced by a recent record of conviction and no current rehabilitation services.

(2) Poor housekeeping.

(3) History of drug or alcohol abuse as evidenced by a recent record of conviction and no current rehabilitative services.

(4) History of rent arrears or poor rental background.

(5) Poor credit check.

(6) - - -

(7) Refusal to pay rent calculated using HUD's rules.

(8) Admission to this project will not be applicant's only place of residence.

VDH did not comply with its own rejection process. There was no allegation in the papers presented to this Court that Donna Lupo has committed any of the enumerated violations above. Clearly, Donna Lupo did not fail to meet the definition of family as she was either a "remaining member of a tenant family" or could be considered a "remaining member of an elderly family". Whatever the designation, Donna Lupo retains her succession rights to her mother's unit. As a result, the respondents were forced to violate the VDH rules because Donna Lupo continued to reside at VDH with her mother, against VDH's wishes.

Another factor to be considered in the succession rights analysis is VDH's re-certification procedures. VDH's tenant selection procedures for re-certifications states:

"Following appropriate HUD guidelines, the owner will examine and verify the income and family composition of all tenants both initially, and thereafter, at least once a year. The owner will initiate the re-certification process timely and in accordance with Handbook procedures. The owner will then adjust tenant rent and the housing assistance [*10]payment in accordance with any change in tenant income. The owner may schedule re-examinations at intervals of less than one year when it is not possible to make a reasonable estimate of the tenant income for a full year." (see, ¶Y[3]).

Donna Lupo's income was factored into VDH's re-certifications of Agnes Schmidt's unit for approximately three (3) years, although Agnes Schmidt continued to be named as the head of the household. Donna Lupo has now been residing in her mother's unit since August, 2000 and although VDH factored Donna's income on three re-certifications, it continued to refuse to add Donna as a named tenant.

VDH alleges that Donna Lupo was a "live-in aide". VDH further alleges that it only factored Donna Lupo's income because she willingly consented as a "live-in aide" and that these income re-certifications do not prove that Donna was a VDH tenant. VDH seeks to evict Donna Lupo; asserting she is a "live-in aide" who waived and released her succession rights. The petitioner's argument that Donna Lupo was a "Live-in aide" is unpersuasive.

VDH's residency rules define Live-In Aide ^[FN9] as a person who lives with an elderly, handicapped or disabled person and who provides essential support to the elderly, handicapped or disabled person (see, Footnote 5). Family members can be live-in aides or attendants provided that such person would not otherwise be living in the complex. A live-in aide is permitted to remain in the apartment only as long as the elderly, disabled or handicapped person needs their supportive services and, if a family member, may not qualify for occupancy as a remaining family member.

Furthermore, VDH has not proven that Donna Lupo was even able to care for her mother because she claims to be mentally impaired (i.e., received Social Security Disability Benefits), nor was she recommended by Agnes Schmidt's doctors as a qualified care giver ^[FN10]. [*11]

In addition, the written waiver of succession rights relied upon by VDH to assert that Donna Lupo was, in fact, a "live-in aide" with no succession rights is invalid. In 2000, VDH required Donna Lupo and Agnes Schmidt to sign a "Release of Succession Rights", in order to allow Donna Lupo to continue to reside with her mother. This release was based upon the mistaken belief that VDH was a Section 202 project and as such, a family member could not move into an apartment in such a project except as a live-in aide.

The Release of Succession Rights was based upon a mutual mistake of fact. An agreement based upon a mutual mistake of fact is voidable (see, Gould v. Board of Education of the Sewanhawka Central High School District, 81 NY2d 446 [1993]). The mistake must be substantial and must exist at the time the agreement is entered into. The mistake must indicate that the agreement does not represent the intent of the parties (see, Weissman v. Bondy & Schloss, 230 AD2d 465 [1st Dept 1997]). "It is a basic rule that a person may not knowingly relinquish rights that she does not knowingly possess" (see, Gould v. Board of Education of the Sewanhawka Central High School District, 81 NY2d at 452). Donna Lupo's counsel claims that her client would not have signed the release if she was not under the mistaken belief that it was the only way she could remain in her mother's unit. Accordingly, the "Release of Succession Rights Agreement" is invalid.

Donna Lupo is not a "Live-in Aide". Rather, Donna Lupo is a "remaining member of a tenant family" whom has qualified for succession rights to her mother, Agnes Schmidt's tenancy in VDH.

C. Donna Lupo's Alternative Argument That She Qualifies for a Unit in the VDHFacility Based Upon her Mental Handicap is denied as Moot

Donna Lupo alleges that if she is not eligible to succeed to her mother's tenancy, in the alternative, she is entitled to remain in the VDH facility as the type of individual contemplated for VDH residency. Donna Lupo claims that she is legally disabled as defined by Section 223 of the Social Security Act (42 USC 423). Her income is also limited to her Social Security Disability benefits. She maintains that VDH's selection procedures indicate that a mentally impaired individual falls under the category of a handicapped person. VDH's selection procedures do indicate that eligibility requirements permit occupancy of the premises by handicapped individuals.

VDH opposes this argument by stating that it has always operated as a facility for the elderly and for "mobility" impaired individuals only. Whether VDH has failed to comply with its selection procedures and if such procedures were not in accordance with the Federal Section 8 requirements governing the facility, will not be reached by this Court.

Accordingly, this Court finds that Donna Lupo may remain in the named premises as she qualifies as a "remaining member of a tenant family" for the purposes of receiving succession rights to her mother's tenancy.

The summary proceeding is hereby dismissed.

So Ordered:

/s/

DISTRICT COURT JUDGE

Dated:September 14, 2007

CC:Nassau/Suffolk Law Services Committee, Inc.

William D. Friedman, Esq.

M. Kathryn Meng, Esq., Guardian ad Litem

SF/mp