Civil Court of the City of New York, Bronx County, September 10, 2021

The Legal Aid Society (Kayla Fonseca of counsel) for respondent.

Kellner Herlihy Getty & Friedman LLP (Charles E. Krausche II of counsel) for petitioner.

The decision and order on this motion and cross motion is as follows:

Facts and Arguments

Petitioner in this summary holdover proceeding, Pri Villa Avenue, L.P., seeks to recover possession of the subject residential premises from respondent August Cocchia on the basis that respondent "[has] engaged in a course of objectionable conduct that interferes with the rights and comforts of others." (NY St Cts Elec Filing [NYSCEF] Doc No. 24, notice of termination at 9.) The essence of petitioner's allegation is that respondent has maintained the premises in a cluttered and unsanitary manner and has refused its attempts to declutter and exterminate. It is not disputed that petitioner is a recipient of funding through the Shelter Plus Care Program, and that respondent, a rent-stabilized tenant, is a participant in the program. It is also not disputed that the premises are further governed by a regulatory agreement between petitioner and New York City and consequently subject to Low Income Housing Tax Credit (LIHTC) regulations. If petitioner prevails, respondent will lose both his home and his assistance through the program.

Respondent, now represented by counsel, has moved to dismiss the petition pursuant to [*2]CPLR 3211 (a) (7) arguing{**73 Misc 3d at 485} petitioner has failed to state a legal and factual basis for this proceeding as required by RPAPL 741 (4) in that petitioner has "failed to properly plead the regulatory status of the subject premises and its compliance with the federal rules and regulations that govern the Shelter Plus Care Program." (NYSCEF Doc No. 5, Fonseca affirmation ¶ 42.) Specifically, respondent argues that petitioner was required to and failed to allege in the petition that (1) the premises are subject to the federal regulations of the Shelter Plus Care Program, (2) the premises are governed by a HOME written agreement and that the petitioner receives subsidies pursuant to the federal HOME Investment Partnerships Program, and (3) the premises are subject to the LIHTC regulations. (NYSCEF Doc No. 5, Fonseca affirmation ¶ 50.) Respondent also moves to dismiss the petition on the grounds that petitioner lacks standing to commence this proceeding because, contrary to the allegations in the petition, petitioner is not the "owner of the premises." (NYSCEF Doc No. 5, Fonseca affirmation ¶¶ 17-18; see also NYSCEF Doc No. 24, verified petition at 6 ¶ 1.) Respondent contends instead that the proper party to the proceeding is Pri Villa Avenue Housing Development Fund Corporation (the HDFC), the entity that holds record title as indicated by the most recently recorded deed. (NYSCEF Doc No. 5, Fonseca affirmation ¶ 18.)

In the alternative, respondent argues that respondent has provided the court with a "hardship declaration" and the proceeding must accordingly be stayed pursuant to the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 (CEEFPA) (L 2020, ch 381) as the grounds for this proceeding do not qualify petitioner for an exception under CEEFPA to the stay provisions of same.^[FN1] (NYSCEF Doc No. 5, Fonseca affirmation ¶¶ 82-83.)

In opposition, petitioner contends that it has standing to commence the proceeding under RPAPL 721 (1) as the "landlord or lessor" in the parties' lease agreement. (NYSCEF Doc Nos. 17, Krausche affirmation ¶ 3; 19, petitioner's exhibit A.) Petitioner clarifies that the petitioner is the beneficial owner of the premises pursuant to a declaration and nominee agreement{**73 Misc 3d at 486} with the HDFC (NYSCEF Doc No. 17, Krausche affirmation ¶ 4), and cross-moves to amend its petition to so state. (NYSCEF Doc Nos. 17, Krausche affirmation ¶ 25; 21, petitioner's exhibit C ¶ 1.) Petitioner also contends that there was no need to plead the existence of the HOME agreement as the premises are not governed by the HOME agreement (NYSCEF Doc No. 17, Krausche affirmation ¶ 14); that the LIHTC regulations do not provide respondent with any substantive rights relevant to this holdover proceeding and therefore respondent has not been prejudiced by the failure to plead same (NYSCEF Doc No. 17, Krausche affirmation ¶ 17); that the respondent's participation in the Shelter Plus Care Program was adequately pleaded (NYSCEF Doc No. 17, Krausche affirmation ¶ 18), and that any due process protections in the governing federal regulations are exceeded and obviated by protections provided for in the Rent Stabilization Code (NYSCEF Doc No. 17, Krausche affirmation ¶ 18); and that eviction for nuisance behavior satisfies the Shelter Plus Care Program "requirement that the housing provider only terminate in the 'most severe case.' " (NYSCEF Doc. No. 17, Krausche affirmation ¶ 23.)

Petitioner's cross motion also seeks to amend the petition to specify that the premises are subject to the LIHTC regulations found in section 42 of the Internal Revenue Code, and requests that the amended petition attached to its motion be deemed as served on all parties. (NYSCEF Doc Nos. 17, Krausche affirmation ¶ 25; 21, petitioner's exhibit C ¶ 9.) Conspicuously, petitioner has not moved to amend its petition to plead the Shelter Plus Care regulations, or its compliance with the rules and regulations that govern the Shelter Plus Care Program.

Respondent replies to petitioner's opposition and opposes its cross motion on the basis that the premises are in fact subject to a HOME written agreement (NYSCEF Doc No. 22, Fonseca reply affirmation ¶¶ 21-38), that the petitioner's cited cases are distinguishable (NYSCEF Doc No. 22, Fonseca reply affirmation ¶¶ 29-32), that amendment of the petition is futile because petitioner has already failed to provide respondent with due process rights afforded by the Shelter Plus Care Program regulations (NYSCEF Doc No. 22, Fonseca reply affirmation ¶¶ 41-53), and that petitioner has not adequately demonstrated that this proceeding falls within any "nuisance exception" to the filing of a hardship declaration. (NYSCEF Doc No. 22, Fonseca reply affirmation ¶¶ 54-60.)

The court first considers respondent's motion to dismiss.{**73 Misc 3d at 487}

Discussion

RPAPL 741 states in relevant part that

"[e]very petition shall:

"1. State the interest of the petitioner in the premises from which removal is sought.

"2. State the respondent's interest in the premises and his relationship to petitioner with regard thereto.

"3. Describe the premises from which removal is sought.

"4. State the facts upon which the special proceeding is based."

Where a tenancy is subject to a specific type of regulation, the petition must set forth the tenant's regulatory status, because this status may determine the scope of the tenant's rights. (Matter of Volunteers of Am.-Greater N.Y., Inc. v Almonte, 65 AD3d 1155 [2d Dept 2009], affg 17 Misc 3d 57 [App Term, 2d Dept, 2d & 11th Jud Dists 2007]; see Cintron v Pandis, 34 Misc 3d 152[A], 2012 NY Slip Op 50309[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2012].) A petition which fails to satisfy this requirement is subject to dismissal. While a defect of this nature may be overlooked where no prejudice results to the tenant (see 17th Holding v Rivera, 195 Misc 2d 531 [App Term, 2d Dept 2002]; see also Coalition Houses L.P. v Bonano, 12 Misc 3d 146[A], 2006 NY Slip Op 51516[U] [App Term, 1st Dept 2006]), for the following reasons it cannot be said that petitioner's failure to make the required allegation was not prejudicial here.

The Shelter Plus Care Program "is designed to link rental assistance to supportive services for hard-to-serve homeless persons with disabilities (primarily those who are seriously mentally ill; have chronic problems with alcohol, drugs, or both; or have acquired immunodeficiency syndrome (AIDS) and related diseases) and their families." (24 CFR 582.1 [a].) Recipients of funding through the program "must assure that adequate supportive services are available to participants in the program." (24 CFR 582.300 [c] [emphasis added].) "Eligibility [*4]includes documentation . . . that the client has a documented disability of indefinite duration and impedes the person's ability to live independently within the community." (NY Connects, Program Shelter Plus Care Housing, available at https://www.nyconnects.ny.gov/services/shelter-plus-care-housing-652 [last accessed Aug. 31, 2021]; see also 24 CFR 582.5 [defining eligible disabilities].){**73 Misc 3d at 488}

Consistent with the objective of the program, the governing regulations provide for termination of assistance to individuals in some circumstances, but "only in the most severe cases." (24 CFR 582.320 [a].) To ensure the integrity of the program, the regulations require that prior to termination of assistance to an occupant, recipients "examine all extenuating circumstances in determining when violations are serious enough to warrant termination." (Id.) In furtherance of this goal, recipients must "provide a formal process that recognizes the rights of individuals receiving assistance to due process of law." (24 CFR 582.320 [b].)

"This process, at a minimum, must consist of:

"(1) Written notice to the participant containing a clear statement of the reasons for termination;

"(2) A review of the decision, in which the participant is given the opportunity to present written or oral objections before a person other than the person (or a subordinate of that person) who made or approved the termination decision; and

"(3) Prompt written notice of the final decision to the participant." (Id. [emphasis added].)

The predicate notice of termination served herein, as is relevant to the Shelter Plus Care subsidy, summarily states that respondent's behavior constitutes "good cause for termination under the Shelter Plus Care Subsidy Program." (NYSCEF Doc No. 24, termination notice at 9-11.) Petitioner has neither pleaded the regulations requiring the formal termination process, nor compliance therewith.

Respondent cites to Westchester Gardens, L.P. v Lanclos (43 Misc 3d 681 [Civ Ct, Bronx County 2014]), a persuasive case indiscernible from the one at bar. In Lanclos, a landlord who was also a recipient of a Shelter Plus Care subsidy sued a tenant who was a participant in the program alleging chronic nuisance. Upon the tenant's failure to remove from the premises after the expiration of the termination notice, the landlord commenced a summary holdover proceeding. The represented tenant argued that the petition failed to sufficiently plead the regulatory status of the premises in accordance with RPAPL 741 (4), "and that [the] landlord additionally failed to comply with federal procedural due process protections and with other conditions precedent to commencing this proceeding as required by the Code of Federal Regulations (CFR), 24 CFR 582.320." (Lanclos, 43 Misc 3d at 684.) In Lanclos{**73 Misc 3d at 489}, as here, the petition was also silent as to a regulatory agreement with New York City, and that the premises were subject to the LIHTC regulations. (Id.) Such governmental entwinement, the court opined, "constitute[d] significant and meaningful governmental participation, triggering constitutional procedural due process guarantees." (Id. at 686.)

The Lanclos court pointedly rejected the landlord's argument that compliance with the [*5]CFR is not a condition precedent to commencing a summary proceeding to evict a tenant participating in the Shelter Plus Care Program, and specifically stated that the failure to include in its pleadings "the CFR rules and regulations governing the Shelter Plus Care Program of which tenant belongs" and failure to allege compliance with the regulations was "fatal to [the] proceeding because neither tenant nor the court were put on notice of the laws governing the tenancy or the substantive rights involved." (Id. at 685-686 [emphasis added]; see id. at 686 ["Not only is the premises' regulatory status required, but landlord must also show its compliance with the applicable rent laws and regulations over the tenancy" (emphasis added)].)^[FN2]

Petitioner mischaracterizes the supportive services and due process requirements of 24 CFR 582.320 (b) as "minimum requirements" to ensure due process prior to eviction (NYSCEF Doc No. 17, Krausche affirmation ¶ 21),^[FN3] that are lesser than the "superior" protections from eviction provided by the Rent Stabilization Code. Petitioner maintains that because petitioner opted in the regulatory agreement between it and the city to be subject to the Rent Stabilization Law, petitioner has provided a pre-eviction "judicial process" that exceeds the purported "minimum requirements [of the federal regulations]." (NYSCEF Doc No. 17, Krausche affirmation ¶¶ 21-22.) The gravamen of petitioner's argument is that it does not need to afford to respondent{**73 Misc 3d at 490} the supportive services process that it is required by the Shelter Plus Care regulations to provide because it is adhering to the Rent Stabilization Code by seeking respondent's eviction in court.^[FN4]

In the context of the relationship between petitioner and respondent, where respondent is sheltered by petitioner who receives federal funding to provide both shelter and care to respondent, the federal regulations and state law are not exclusive of each other and can exist in harmony. The Rent Stabilization Code does not require that recipients of funding for supportive housing provide for "adequate supportive services" or special procedures when evicting a [*6]supportive housing resident (see 24 CFR 582.300 [c]), or provide a formal process to ensure that a resident's rights to adequate services have been protected prior to termination. (24 CFR 582.320.) These are additional protections that petitioner has contracted to provide. (See Minick v Park, 217 AD2d 489, 490 [1st Dept 1995] ["The (Rent Stabilization Code) simply establishes the minimum rights to be accorded tenants, and does not preclude a contract that gives a tenant greater rights"].)

Thus, under the circumstances herein, pleading that these premises are subject to the relevant supportive housing rules and regulations, and compliance therewith, alerts the court and the parties to additional protections intended to safeguard vulnerable, formerly-homeless occupants from needless displacement or premature eviction. Requiring a landlord who receives government funds through the Shelter Plus Care Program to plead its contractual interest in a premises, and its compliance with governing supportive housing regulations and procedures, also ensures that such recipients are meeting the program's interrelated goals and obligations to house dispossessed and compromised individuals, prevent their displacement except in "only . . . the most severe cases," and support them to live harmoniously and safely within a community. It{**73 Misc 3d at 491} further ensures that the court does not inadvertently trample on the due process rights afforded to participants in the program.

As the respondent's motion to dismiss this proceeding pursuant to RPAPL 741 and CPLR 3211 (a) (7) is granted, the court need not reach the other branches of respondent's motion. Petitioner's cross motion is denied as moot.