Court Opinion

ID: 5859602
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:14:42.320776+00
Date Added: 2024-06-11T08:44:23.291154
License: Public Domain

Kassal, J.
(dissenting). Defendant, lessor of premises located at 245 East 40th Street, New York City, appeals from an order and judgment which declared the rights of the parties pursuant to CPLR 3001, (1) holding plaintiffs *61entitled to sublet or assign the remaining term on their lease and (2) directing defendants to consent thereto.
Plaintiffs are the prime tenants of an apartment under a written lease for the term from July 1, 1980 to June 30, 1983. On or about June 10,1981, plaintiffs sought to sublet their apartment to one Mina Schottenfeld, effective August 1, 1981, to run for the balance of the lease term. After an exchange of correspondence between counsel, the lessor refused to consent upon three specified grounds: (1) the prime tenants had purchased a co-operative apartment at 135 East 83rd Street and, as a result of the purchase, would no longer maintain the subject apartment as their primary residence; (2) the proposed sublessee does not have income from employment to secure payment of rent; and (3) the proposed subtenant already has a residence address within New York County at 175 West 12th Street. In reliance upon the foregoing, the landlord refused to consent to the proposed sublease which, since it ran for the balance of the term of the prime tenant, actually constituted an assignment.
The prime lease affords a right to assign or sublet, subject to the prior written consent of the owner, in accordance with section 226-b of the Real Property Law: “Except as provided by section 226-b of the Real Property Law of New York, the Tenant shall not assign the Lease, nor sublet the Apartment, or permit the Apartment or any part thereof to be used by anyone other than Tenant or members of the immediate family of Tenant, without the prior written consent of Owner in each case.”
We find, as did Special Term, that the reasons given by the landlord in refusing to consent to the proposed assignment, were unreasonable. In accordance with our prior determinations in both Conrad v Third Sutton Realty Co. (81 AD2d 50, mot for lv to app den 55 NY2d 601) and Lexann Realty Co. v Deitchman (83 AD2d 540), section 226-b of the Real Property Law properly construed, affords a tenant with alternate remedies, where the landlord fails to conform to the statutory procedure; he may either effect his release from the remaining term of the lease or he may proceed with the proposed sublease or assignment. These alternatives are available where the landlord gives no *62reason to support his refusal to consent to the subletting or assignment (Real Property Law, § 226-b, subd 2) or, where, as here, the owner relies upon grounds which are palpably insufficient and unreasonable on their face.
First, on the procedural basis, we disagree with Justices Silverman and Bloom who object to granting summary judgment relief since issue has not been joined. While we recognize that CPLR 3212 requires joinder of issue before an application for summary disposition, there is apparently no dispute on this record with respect to the operative facts and the only disagreement between the parties is as to a matter of law, i.e., the determination of what legal consequences flow from the reasons assigned by the landlord in refusing to grant permission. Under the circumstances, we fail to perceive any factual issue, real or fancied, remaining to be tried and there is no practical reason to defer until service of an answer the very application which would undoubtedly be made at that time.
Further, although the procedural issue has been raised on the appeal, no such objection was made by defendants before Special Term. Having acquiesced in the procedural posture by which the legal issue was presented, the parties have charted their own procedural course (T. W. Oil v Con Edison Co. of N. Y., 57 NY2d 574, 580; Stevenson v News Syndicate Co., 302 NY 81, 87). This objection, not having been raised before Special Term, may not be tendered for the first time on appeal. Both parties directly and fully addressed the legal issue on the original application thus posing for disposition what, in effect, amounts to a submission on agreed facts. Under the circumstances, there is no reason to delay a strictly legal determination, necessary to declare the rights of the parties.
The parties here adhered to the same procedure followed in Conrad v Third Sutton Realty Co. (supra) where simultaneous with the service of a summons and complaint, plaintiff served an order to show cause for declaratory judgment relief, directing the owner to consent in writing to the sublease. Other cases have sustained the same procedure, in part in reliance upon our decision in Conrad (see Bragar v Berkeley Assoc. Co., 111 Misc 2d 333). Our colleagues who now object to the procedure as improper so *63as to warrant a reversal, raised no such similar objection in Conrad. We find no useful purpose served in deciding this appeal on this procedural ground, particularly since objection was not raised before Special Term. Clearly, the parties consented to and acquiesced in the procedural posture by which the legal issue was raised.
On the merits, we disagree with Justice Silverman’s analysis of the remedies afforded by the statute. His construction would allow the tenant to proceed with the sublease where the landlord fails to give a reason in refusing to consent, as was the case in Conrad (supra), but would limit the tenant to obtaining a release from the remaining term where the landlord gives any reason for his refusal, albeit unreasonable. The statute (Real Property Law, § 226-b) specifically affords to a tenant in a residential dwelling with four or more units the right to sublet or assign, subject to the written consent of the landlord and directs that “[s]uch consent shall not be unreasonably withheld.” The statute, therefore, establishes a mandatory standard and is binding upon the parties in the face of an inconsistent lease provision or where the lease does not address the issue. Moreover, here, the lease incorporates the terms and conditions of section 226-b of the Real Property Law and thus, imposes upon the landlord the statutory obligation that his consent not be unreasonably withheld. Upon that basis, the situation involved here is not at all different from that which confronted us in Lexann Realty Co. (supra) where the lease contained a clause which prohibited subletting without the landlord’s consent, but provided that the consent would not be unreasonably withheld.
We find unnecessarily restrictive Justice Silverman’s interpretation of the statute, which would limit the remedies available to a tenant, permitting the tenant to proceed with the sublease or assignment only in those cases where the lessor failed to follow the statutory procedure and did not give any reason for refusing to consent. While subdivision 2 of section 226-b of the Real Property Law specifically provides that the failure of the landlord to send a notice shall be deemed a consent, the statute does not preclude a similar result where the landlord is found to have unrea*64sonably withheld consent. Subdivision 1 of section 226-b of the Real Property Law provides a remedy to the tenant to be released from the lease where the landlord unreasonably withholds consent. The statute, however, does not limit the tenant to that remedy. As we held in both Conrad and Lexann Realty, the unreasonable refusal to consent may be deemed a consent. The restrictive view adopted by Justice Silverman unnecessarily permits the landlord to impinge upon the right to assign or sublet which the Legislature afforded to the tenant. In any case, were the landlord permitted to rely upon any excuse or reason for his refusal to consent, albeit improper and unreasonable, he would thus be afforded a most convenient means to effect removal of the tenant and thereby regain possession. Patently, the practice thus sustained would frustrate the legislative purpose.
While we are in agreement that further legislative action may be desirable to clarify the respective rights of the parties, we cannot subscribe to a restrictive interpretation which would limit the remedies available to a tenant, depending upon whether the landlord refused to consent, without assigning any reason, or, in lieu thereof, relied upon a palpably insufficient ground, which was unreasonable as a matter of law. Such an approach overlooks the underlying legislative purpose to afford the tenant a right to assign or sublet, subject only to the lessor’s refusal to consent based upon rational grounds.
The construction adopted by Justice Silverman overlooks the fact that, prior to the statutory enactment, when the landlord violated an agreement not to withhold his consent unreasonably, the tenant could avail himself of a variety of remedies. He could ignore the restriction in the lease and proceed with an assignment or subletting of the premises; he could proceed by way of declaratory judgment to determine whether the landlord’s consent was unreasonably withheld; he could maintain an action for damages; or he could sue for specific performance of the agreement (see 2 Rasch, New York Landlord and Tenant [2d ed], § 269). The only remedy which was not afforded to the tenant was to quit possession and abandon the leased premises, extinguishing the obligation to pay rent ibid.). The enactment of *65section 226-b of the Real Property Law effected a change in the law by giving to the tenant, as an alternate remedy, the right to obtain a release from the lease where the landlord unreasonably withheld consent. Contrary to the opinion of our colleague, however, this did not eliminate the other remedies available to the tenant, but rather, expanded the rights of the tenant by affording to him a remedy in addition to those that he already had.
In lieu of the piecemeal interpretation of the statute, we adhere to our prior determination in Conrad v Third Sutton Realty Co. (supra) as dispositive of the issue raised here. We see no reason to erode the legal principle announced there nor to limit the holding to those cases where a landlord fails to give any reason for refusing to consent to an assignment or subletting of the premises. Such a construction would unnecessarily eliminate a class of tenants intended to be protected from the scope of the statute. Thus, we find our observation in Conrad, in delineating the respective rights and obligations of the parties as dispositive of the issue herein (81 AD2d, at pp 55-56): “Accordingly, it becomes clear that under both sections, as amended, the release of the tenant from the lease becomes automatic at the option of the tenant and the landlord is required to set forth his reasons for refusing the tenant’s request for consent to sublease * * * To interpret the section as defendant would have us do would result in injury to the plaintiff tenant’s position, which was not contemplated by the Legislature. In fact, this result would be an incentive for landlords to unreasonably withhold their consent to a sublease for the purpose of obtaining a vacancy for rerental with an attendant increase. If the rights of tenants were limited to merely being released from the lease after a rejection of the sublease, as argued by the landlord, then the statutory mandate of requiring the landlord not to unreasonably withhold consent would be meaningless. This we are not prepared to sanction.”
Similarly, we held in Lexann Realty Co. v Deitchman (supra) adopting the dissent by Justice Asch, then sitting in the Appellate Term in that case, that section 226-b of the Real Property Law was designed to afford to the tenant two remedies, at his option, namely, to surrender the lease *66under subdivision 1 of section 226-b and, the other, to compel the landlord to accept the sublessee or assignee under subdivision 2 thereof (see, also, Conrad v Third Sutton Realty Co., 81 AD2d, at pp 56-57). Instructive is our observation in Conrad v Third Sutton (supra, p 57) “To interpret this section as defendant would have us do, ignores the fact that this legislation was passed to increase a tenant’s rights and provide him with a modicum of negotiating capacity during a period of housing shortages. This court cannot disregard the legislative intent behind this statute. One of the sponsors of this legislation, Senator Halperin, stated when the bill was submitted, that: ‘Housing shortages and inequities to the tenants may be alleviated by this bill through the allowance of a tenant to sublease his premises when they are not in use’.”
Accordingly, consistent with our holdings in both Conrad and Lexann Realty (supra), where a landlord, in response to a request by a tenant to assign or sublet, unreasonably withholds consent, either by failing to conform to the statutory procedure, or in giving as the reason for the refusal grounds which are patently insufficient and unreasonable, the tenant may avail himself of the alternate remedies afforded by the statute, either by surrendering possession and being released from the remainder of the lease term or, upon a finding that the landlord had unreasonably withheld consent, by proceeding with the proposed sublease or assignment.
We also disagree with the views expressed by Justice Milonas, who has concluded that the reason given by the landlord for withholding consent was reasonable, i.e., that the prime tenants, having purchased a co-operative apartment elsewhere, would no longer maintain the subject apartment as their primary residence. The approach, we feel, overlooks the express language of the statute and thus disregards the intention of the Legislature, which specifically affords to the tenant under section 226-b of the Real Property Law, a right to assign or sublet the premises. Justice Milonas, in concurring, would limit the statutory right only to cases where the tenant intends to return, i.e., where he continues to maintain the subject premises as his primary residence. However, by definition and legal effect, *67an assignment, as distinguished from a sublease, is a transfer of the tenant’s entire interest in the premises and, in such cases, a tenant having conveyed the remainder of his leasehold interest, will not return to or continue to maintain the premises as his primary residence. This is in sharp contrast to a subletting, whereunder the tenant retains a reversionary interest. The reasoning propounded by Justice Milonas, in permitting only sublessees and not assignees to be afforded the protection of section 226-b of the Real Property Law, is in clear conflict with the statute, which affords the tenant a right to assign or sublet.
Whether the landlord would in the future be required to recognize the assignee as the “tenant in occupancy” under section 60 of the Code of the Rent Stabilization Association of New York City, Inc., with the obligation to offer a renewal lease, is not before us on this appeal. Justice Bloom observes that, to his knowledge, the issue has not as yet been passed upon. However, assuming that to be the case, we do not perceive the necessity of deferring determination of the specific legal issue raised in this action, which is ripe for disposition, until some future time when the issue as to the applicability of section 60 of the Code of the Rent Stabilization Association of New York City, Inc. might be determined by the administrative agency.
For the foregoing reasons, we agree with Special Term that the grounds relied upon by the landlord in refusing to consent to the assignment were unreasonable. Lacking in merit is the second ground urged by the landlord, that the proposed tenant is not gainfully employed. The record clearly reflects that the proposed subtenant/assignee has independent means. She receives “equitable distribution” in the sum of $12,750 per year, payable over the next 20 years, plus $12,000 per year in alimony, concededly sufficient to satisfy the $1,017.84 monthly rental.
Similarly lacking in merit is the last reason ascribed by the landlord, that the proposed subtenant already has a New York City residence. According to Ms. Schottenfeld, that address is her daughter’s apartment, where she has temporarily resided until occupancy of the subject apartment could be secured. Nevertheless, even were no explanation given, this reason alone does not support the land*68lord’s refusal to consent since, in almost every case, a proposed subtenant or assignee has a prior residence before securing or while awaiting possession. To conclude otherwise would improperly restrict the scope of the statutory protection to situations where the proposed sublessee or assignee, prior to the sublease or assignment, lived outside of the City of New York.
Accordingly, since none of the reasons given by the lessor may properly support the refusal to consent, we find the lessor unreasonably withheld consent, thereby entitling the tenants to avail themselves of the alternate remedies afforded by the statute. As was directed by Special Term, plaintiffs may proceed with the sublease/assignment, with entry of a judgment directing defendants to consent thereto.
The result reached does not conflict with the underlying legislative purpose expressed in section 226-b of the Real Property Law, which is to afford to a tenant a right to assign or sublet, subject only to the right of the landlord to refuse to consent upon reasonable ground. In leasing the premises to the prime tenant in the first instance, the landlord relinquished possession for the full duration of an agreed term at an agreed rental. Appellants have suggested that a windfall would result to the tenant were we to grant permission to assign or sublet when the tenant does not maintain the property as his primary residence. However, were we to permit the landlord to be relieved of its obligations under the lease, as a result of the lessor’s own conduct in ascribing an unreasonable reason for his refusal to consent, would this not similarly grant a windfall to the landlord, who would thereby gain a right to rerent the property at a higher rental during the same period that he agreed to lease the premises? In either case, one party or the other is afforded relief more or less than he anticipated or bargained for at the beginning of the lease term. It is conceivable that a proposed assignment may result from the need to dispose of the lease quickly with a possible loss of rental or other moneys.
Although further legislative clarification is needed, the statute as it presently exists, accords relief to the tenant, consistent with the legislative purpose, which confers upon *69a tenant the right to assign or sublet on the stated condition, that the written consent of the landlord shall not be unreasonably withheld. Thus, this determination, consistent with our prior holdings in both Conrad and Lexann Realty (supra), gives effect to the underlying policy of the statute, without interposing by judicial action what the Legislature has not specifically provided for.
Accordingly, the order and judgment (one paper), Supreme Court, New York County (Maresca, J.), entered November 16, 1981, which granted plaintiffs’ motion, declaring their entitlement to proceed with a sublease or assignment of their apartment and directing defendants to consent thereto in writing, should be affirmed.
DECISION OF THE COURT
The order and judgment (one paper) of the Supreme Court, New York County (Maresca, J.), entered November 10,1981 granting plaintiffs’ motion for judgment declaring that they are entitled to sublease or to assign the lease to their apartment and directing defendants to consent in writing thereto, should be reversed, on the law, without costs, the motion denied, the judgment vacated and the matter remanded for further proceedings.
Silverman, Bloom and Milonas, JJ., each concur in separate opinions and Kassal, J., dissents in an opinion in which Sandler, J., concurs.
Order and judgment reversed, etc.