City Court of Mount Vernon, December 4, 2017

Legal Services of the Hudson Valley, Mount Vernon, for respondent.

Jack A. Addesso, PLLC, Mount Vernon, for petitioner.

In this holdover summary proceeding, respondent tenant moves for an order to dismiss the instant petition based upon the defense that the petitioner landlord's "post-termination acceptance of rent" vitiated the notice required by Real Property Law § 232-b terminating the lease.

Petitioner commenced this holdover petition to remove respondent from apartment No. 4, 113-115 North 5th Avenue, Mount Vernon, New York. The petitioner alleges that occupancy was terminated by a statutory 30-day notice that expired on July 31, 2017.

Prior to this action being commenced, Oscar Davis, the sole shareholder of the petitioner, commenced a holdover proceeding against the respondent. That action was commenced on August 3, 2017, and returnable on August 22, 2017. That action was withdrawn since 113-115 North 5th Avenue Holding Corp. was the actual owner of the property, and not Oscar Davis.

This action was commenced on October 3, 2017, and was made returnable October 11, 2017. On the appearance date, respondent moved to dismiss alleging that the landlord accepted rent between the date of the tenancy termination and commencement of the holdover proceeding rendering this action defective.

There is no dispute that since July 31, 2017, the date of termination, tenant mailed rent payments to petitioner on August 8, 2017, September 7, 2017, and October 6, 2017. The petitioner did not cash the rent payments, but has held the checks during this proceeding. The tenant argues that holding these unsolicited checks and not returning them to the tenant constituted an acceptance of the check and a waiver of the right to proceed with a holdover proceeding.

Both parties agree that the sole issue for this court to determine is whether the 30-day termination notice was vitiated by the rent payments sent to the landlord and not returned by landlord to the tenant.

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{**58 Misc 3d at 578} 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 Hous. Corp. v Luxenberg, 8 Misc 2d 831, 833 [Municipal Ct, Bronx County 1957]; 2 Dolan, Rasch's Landlord and Tenant—Summary Proceedings § 23:52 at 212 [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"].)

Over the years courts have grappled with what constitutes an acceptance of rent which waives a landlord's right to maintain a proceeding, as opposed to when it is an inadvertent "acceptance" of rent, which does not. The doctrine of waiver was not conceived as a trap for the unwary or to elevate gamesmanship, but rather its underpinnings emanate from considerations of justifiable reliance a tenant may place upon actions taken by a landlord that are contrary to its prior position causing the tenant to believe he/she need no longer surrender the premises (see Associated Realties v Brown, 146 Misc 2d 1069 [Civ Ct, NY County 1990]).

Petitioner cites the cases of Matter of Georgetown Unsold Shares, LLC v Ledet (130 AD3d 99, 105 [2d Dept 2015]) and Matter of State of New York v Ted B. (132 AD3d 28, 35-36 [2d Dept 2015]) for the proposition that retention of rent payments after the termination date, but before the commencement of a summary proceeding does not constitute a waiver of its right to proceed under the termination notice.

With respect to the first issue before the court, in Matter of Georgetown Unsold Shares, LLC v Ledet (130 AD3d 99, 105 [2015]), the Appellate Division, Second Department, held that a landlord's receipt of unsolicited rent after the expiration of a rent-stabilized lease and prior to the commencement of a nonprimary residence holdover proceeding did not,

"standing alone, amount to a voluntary relinquishment of the right to contest a tenant's possession on the basis that the leasehold is not the tenant's primary residence. Since the very essence of a waiver is the intentional relinquishment of a known right, a waiver cannot be created via negligence, oversight, or thoughtlessness."

The Court found that the record failed to demonstrate that the landlord had intentionally relinquished its right to proceed{**58 Misc 3d at 579} on its nonrenewal notice by accepting rent checks after the lease's expiration, notwithstanding that the landlord there had never returned the funds to the tenant, where there was no evidence that the landlord had solicited rent from the tenant and where the landlord's managing agent averred that the checks had mistakenly been deposited in [*3]the belief that they represented use and occupancy payments. The Court did not find persuasive the finding of the Appellate Division, First Department, in 205 E. 78th St. Assoc. v Cassidy (192 AD2d 479 [1993]), a nonprimary residence case, that the notice of termination had been nullified where the landlord had claimed its acceptance and deposit of rent in the window period had been inadvertent but had not subsequently returned the funds. The Court in Matter of Georgetown Unsold Shares, LLC noted, in particular, that it "[did] not agree that a landlord must return an unsolicited payment, and thereby allow the tenant to occupy the apartment at no cost, in order to retain its right to proceed on a timely served nonrenewal notice" (130 AD3d at 106).

The rationale of Matter of Georgetown Unsold Shares, LLC v Ledet was reaffirmed with approval by the Second Department in Matter of State of New York v Ted B. (132 AD3d 28, 35-36 [2d Dept 2015]), wherein the following is stated:

"The essence of a waiver is the intentional relinquishment of a known right with both knowledge of its existence and an intention to relinquish it (see Johnson v Zerbst, 304 US 458, 464-465 [1938]; People v Harris, 61 NY2d 9, 17 [1983]; City of New York v State of New York, 40 NY2d 659, 669 [1976]; Matter of Georgetown Unsold Shares, LLC v Ledet, 130 AD3d 99 [2d Dept 2015]). '[K]nowledge and intent are essential elements' (People v Cox, 71 AD2d 798, 798 [1979]). The waiver 'must be clear, unmistakable and without ambiguity' (Matter of Civil Serv. Empls. Assn. v Newman, 88 AD2d 685, 686 [1982], affd 61 NY2d 1001 [1984])."

In the case at bar, there is no evidence that petitioner intentionally waived its right to evict respondent by the acceptance of the three rent checks in August, September and October of 2017. Based upon the above rationale from the Second Department, there was no duty upon petitioner to return the three checks which were regularly sent to pay respondent's rent. Petitioner didn't demand the rent after service of the 30-day notice or offer respondent a renewal lease.{**58 Misc 3d at 580} Petitioner was not required to allow respondent to reside rent free in the apartment.

This court is aware of other cases holding the opposite of the above. The opposing rule is summarized in Scherer & Fisher, Residential Landlord-Tenant Law in New York § 11:6 ("Acceptance of rent as waiver—What constitutes 'acceptance of rent'—Retention of check may be 'acceptance' "):

"Retention of a tenant's check, even if it is not cashed, can constitute acceptance and result in waiver of the right to proceed with a holdover proceeding. 220 West 42 Associates v. Cohen, 60 Misc. 2d 983, 302 N.Y.S.2d 494 (App. Term 1969); 800 Northern Corp. v. Nextel of New York, Inc., 9/11/2002 N.Y.L.J. 22, col. 2 (Nassau Co. Ct.); Gomez v. Haldas, 9/21/2004 N.Y.L.J. 19, col. 3 (Dist. Ct. Nassau Co.); Community Housing Innovations, Inc. v. McKee, 10 Misc 3d 1069(A), 814 N.Y.S.2D 560 (N.Y. Dist. Ct. 2006) (month-to-month tenants could not be evicted based on termination notice intended to be effective at the end of September where landlord failed to return October and November rent checks until December)."

This court declines to follow the above line of cases based upon the two holdings of the Second Department handed down in 2015. There is no evidence that petitioner intentionally waived its right to evict respondent.

Accordingly, respondent's motion to dismiss is denied and the respondent is directed to submit and answer by the adjourned date of December 12, 2017.