2009-2011 Third Avenue Corp. v. Fifth Avenue Community Center of Harlem, Inc.

(concurring). I concur in the result reached by *69the majority on different grounds. The issue is whether a non-permissible use of a building by a net lessee of commercial premises can convert the building into a multiple dwelling. The sublessees contend that a conversion created a landlord-tenant relationship between the nonconsenting net lessor and the sublessees when the net lease was terminated resulting in their attaining rent-stabilized status. The general rule is that a sublessee’s rights are subordinate and extinguished by the termination of the net lease. (170 W. 85th St. Tenants Assn. v Cruz, 173 AD2d 338, 339.)

The city previously leased and renovated these premises as a group home for the homeless. When the city lease terminated, the net lessee attempted to continue to furnish similar housing accommodations but the project failed financially. The sub-lessee residents are now claiming rent-stabilized status with all the attendant legal consequences even though the net lessor has never demanded or accepted either rent or use and occupancy from them. It seeks possession only.

Even assuming that the premises were not being used as a group home and that the net lessor learned of this fact during the term of the l,ease as claimed by the sublessees the sublessees would be in pari delicto. They would have no equitable basis to complain of a misuse from which they are benefitting. (Phillips & Huyler Assocs. v Flynn, 164 Misc 2d 347, affd 225 AD2d 475; Zafra v Sawchuk, NYLJ, Jan. 9, 1995, at 27, col 2 [App Term, 1st Dept].) Furthermore, analogizing this situation with a property violation, the net lessor is simply seeking to cure the violation and obtain possession to restore the premises to commercial occupancy. (Hornfeld v Gaare, 130 AD2d 398.)

Ostrau, P. J., and Freedman, J., concur; McCooe, J., concurs in a separate memorandum.

OPINION OF THE COURT

Order dated February 3, 1995 reversed, with $10 costs, respondents’ motion to dismiss the petition is denied, and the matter is remanded to the Civil Court for further proceedings on the petition.

Appellant is the over landlord of building premises net leased to tenant Fifth Avenue Community Center of Harlem, Inc. (Fifth Avenue), a not-for-profit corporation, for the purpose of operating a "group home”. Respondents rented space from Fifth Avenue on the second and third floors, which they occupied for residential use. After appellant commenced a nonpayment proceeding upon Fifth Avenue’s rent default of approximately $40,000, Fifth Avenue consented to the entry of a possessory judgment against it. With respect to the respondents, who had been named in the petition, Civil Court granted their dismissal motion upon the ground that appellant had failed to plead the building’s status as a multiple dwelling and registration of the building with the Office of Code Enforcement.

The premises was a commercial building, not a multiple dwelling, when net leased to Fifth Avenue. A group home is a type of public institutional facility which is not encompassed within the definition of a "multiple dwelling” (Multiple Dwelling Law § 4 [7]; see, Fischer v Taub, 127 Misc 2d 518, 523-524). It is alleged, however, that Fifth Avenue did not operate the premises as a group home, but rented out the space to the respondents as separate apartments on a monthly basis. To the extent Fifth Avenue violated the terms of its own net lease and created conditions requiring registration while it was in exclusive control of the premises, neither Fifth Avenue nor its undertenants could validly assert lack of registration as a basis to defeat appellant’s nonpayment proceeding. Accordingly, the petition is reinstated and respondents are granted leave to serve an answer interposing any legal or equitable defense (RPAPL 743).