April 10, 2024

On January 19, 2024, Michelle Itkowitz taught a certified continuing legal education program for Lawline, entitled “Getting a Landlord-Tenant Case Started / Predicate Notices”. Below is an excerpt from the 50-page materials that accompany the program. The program has received 253 ratings with an average score of 4.9 out of 5 stars.

First, here are the great reviews the program garnered by July 2024:

• “Excellent as always.”
• “Detailed and thorough.”
• “Really love this speaker.”
• “Truly excellent content and speaker. Will look to take further courses from her.”
• “Excellent”
• “The facilitator was excellent and the corresponding materials were super helpful. She explained things in a way that I could easily understand everything.”
• “Great written materials!”
• “Wonderful presenter.”

Excerpt:

Who is the Owner?

What happens in a summary proceeding when the petitioner is synonymous with landlord in the lease, but that landlord actually had no right to enter into such lease because it did not have an interest in the premises? This problem arises frequently and has not been dealt with consistently by the courts. Although, a deep and methodical dive into thirty years of case law reveals a reliable rule.

1.       Ferber Rule

We begin in 1997 with the “Ferber Rule”. Ferber v. Salon Moderne, Inc., 174 Misc.2d 945 [App Term 1st 1997], which in relevant part, holds as follows:

Petitioner landlord leased commercial premises to tenant in his own name as “Owner”…In fact, landlord’s wife holds title, landlord having conveyed it to her in 1979 for “estate planning” purposes.

 

Upon tenant’s default in payment of rent, petitioner commenced this nonpayment proceeding on a petition which alleges that he “… is the landlord of the premises …” Civil Court granted tenant’s dismissal motion on the basis that petitioner did not have good title and could not maintain the proceeding merely because a lease existed between himself and the tenant. We disagree. Where the tenant has defaulted in the payment of rent pursuant to the agreement under which the premises are held, a summary proceeding for possession may be brought by the “landlord or lessor” [citations omitted throughout]. Questions of title or ownership are not litigated in summary proceedings…

 

Tenant has not sought rescission of the lease and has remained in possession while withholding rent on the ground that landlord has failed to make promised renovations…To the extent tenant is aggrieved by any misrepresentation of title in the lease, its remedy is in a plenary action.

[Emphasis supplied.]

Ferber has been followed in a perfunctory fashion by the Appellate Term in a series of short, often one-paragraph, decisions. Halle Realty Co. v. Abduljaami, 42 Misc.3d 148(A) [App Term 1st Dept 2014] (citing Ferber), holds that, “[p]roof of ownership is not a prerequisite to the maintenance of a summary proceeding pursuant to RPAPL § 721, which authorizes the maintenance of such a proceeding by ‘landlord or lessor’.” Gouverneur Gardens Housing Corp. v. Silverman, 26 Misc.3d 133(A) [App Term 1st Dept 2010] (citing Ferber), holds that, “[t]o the extent that appellant seeks to challenge landlord’s ownership of the premises, questions of title and ownership are not properly the subject of a summary proceeding.”

Mattis v. Brockington, 19 Misc.3d 133(A) [App Term 1st Dept 2008] (citing Ferber), in relevant part, holds:

The trial court correctly found that the jury’s determination that there was no landlord-tenant relationship between the parties was against the weight of the evidence, it being undisputed that petitioner had initially placed respondents into possession and that respondents concededly had paid rent to him. Having taken possession directly from petitioner, who was named as co-owner on a deed duly recorded in 1989, respondents are estopped from disputing his status as landlord. To the extent that respondents seek to challenge petitioner’s ownership of the premises, questions of title and ownership are not properly the subject of a summary proceeding.

 

[Emphasis supplied.]

2.      Redhead Rule

Alongside the Ferber Rule, however, has been the long-term consistent development of the “Redhead Rule”, derived from Redhead v. Henry, 160 Misc.2d 546 [New York City Civil Court, Kings County 1994], which in relevant part, holds:

One cannot confer the status of landlord or lessor upon oneself in a vacuum. One is not a landlord or lessor simply because he/she proclaims so. One cannot prove he/she is a landlord by simply testifying that he/she is a landlord. Nor is producing a lease between the purported landlord and tenant sufficient to prove one is a landlord or lessor. A lease merely evidences the transfer of an interest, it doesn’t show the transferor had the right or authority to transfer it. Testimony or production of the lease is only half of what need be shown in proving one is a landlord or lessor. The other half is authority or right to transfer an interest in real property. Expressed as an equation: Landlord = authority or right to transfer an interest in real property + transfer of an interest in real property via a lease, oral or written. Therefore in cases where the petitioner is in fact the owner, showing ownership is simply the most obvious method by which to prove one’s right or authority, it is not that ownership must be shown in and of itself as an element of the prima facie case. If the petitioner is the holder of a lesser estate, such as being a net lessee, then the net lease would be the instrument by which to exhibit one’s right or authority.

 

To adopt petitioner’s view that the lease alone is sufficient to prove one is a landlord or lessor is adopting a position akin to, “I am, because I say I am” and leads to absurd results. This would permit anyone coming upon an abandoned building, or a city-owned vacant building, or any other premises in which such person has no right or authority to convey a right to possession in and by the simple expedient of entering into leases with tenants allow such person to bring summary proceedings without further proof of right or authority to maintain the proceeding. One cannot transfer what he/she doesn’t possess. You cannot carve out an estate, a right of possession out of thin air…

 

[Emphasis supplied.]

Redhead’s reasoning is compelling. How can one be a lessor if one had no right to be? And a summary proceeding should be less concerned with privity of contract between the parties and more concerned with privity of estate, it being a proceeding to terminate and recover the estate. As such, Redhead initiates a thirty-year line of good case law that crosses over into the First Department. Below we track Redhead’s journey to the present day as controlling case law.

In 2002, 39 East Rest. Corp. v. Caffe Adulis Ltd., 2002 WL 1880253 [New York City Civil Court, New York County 2002], citing Redhead, in relevant part, held:

Petitioner [sold the subject commercial cooperative unit]…

 

…To be considered a landlord or lessor under section 721(1) of RPAPL the petitioner must prove that he is possessed of ownership of an estate in land and that he has leased it to another person. The lease itself is only half of what must be shown; the other half is the ability to transfer an interest in real property. Redhead v. Henry, 160 Misc.2d 546, 610 N.Y.S.2d 433 (Civ.Cyt.1994)…

 

Under section 721(7) of RPAPL, a person who is not a landlord may maintain a summary proceeding against a licensee provided that the petitioner can evidence that he is entitled to possession of the premises in question.

 

…in parting with the lease the [Petitioner] divested itself of privity of estate, although it retained privity of contract, and therefore was not entitled to recover possession of the premises nor maintain a summary proceeding for such relief.

 

[Emphasis supplied.]

For summary proceedings for the recovery of real property, it is not sufficient, for purposes of proving standing and for pleading the basis upon which the proceeding is based, to produce a lease between the purported landlord and tenant. To adopt the view that the lease alone is sufficient to prove one is a landlord or lessor leads to absurd results. One cannot transfer what they do not possess. You cannot carve out an estate and a right of possession out of thin air. Redhead v. Henry, 160 Misc.2d 546 [New York City Civil Court, Kings County 1994]; Abera Corp. v. Smith, 67 Misc.3d 1241(A) [New York City Civil Court, New York County 2020].

To be considered a landlord or lessor under section 721(1) of RPAPL the petitioner must prove that he is possessed of ownership of an estate in land and that he has leased it to another person. The lease itself is only half of what must be shown; the other half is the ability to transfer an interest in real property. 39 East Rest. Corp. v. Caffe Adulis Ltd., 2002 WL 1880253 [New York City Civil Court, New York County 2002].

In a summary proceeding involving a co-op apartment, respondent may utilize a challenge to petitioner’s ownership of the stock certificate and proprietary lease to defeat petitioner’s claim to ownership that would entitle petitioner to maintain the proceeding. Gordian v. Donovan, 6 Misc.3d 1028(A) [New York City Civil Court, New York County 2004]; Charles v. Walker, 48 Misc.3d 1208(A) [New York City Civil Court 2015].

A party without the necessary possessory interest and privity of estate may not be a party to a summary proceeding. This is not in contravention of Ferber if the question is one of standing and pleading and not one of title and ownership. Metropolitan Realty Group v. McSwain, 27 Misc.3d 1216(A) [27 Misc3d 1216(A) [New York City Civil Court, New York County 2010]. While Ferber may stand for the proposition that a tenant cannot dispute his or her landlord’s title after the tenant has accepted possession from such landlord and while still enjoying such possession, it should not be interpreted so as to preclude a tenant from asserting that the landlord who granted him possession lacked standing to commence a summary proceeding where the unrefuted evidence establishes that such “landlord” has no interest in the subject premises. Terner v. Brighton Foods, Inc., 27 Misc.3d 1225(A) [New York City Civil Court, Kings County 2010]. A Housing Part lacks jurisdiction to determine property ownership outside of the context of a summary proceeding and to otherwise issue declaratory relief, but it necessarily must be able to determine whether petitioner proved an element of its prima facie case. Baldwin v. McCarry, 78 Misc.3d 1214(A) [New York City Civil Court, New York County 2023].

3. Documents to Review Before Starting a Case

Thus, a practitioner must get their hands on and carefully examine the documents that prove landlord’s interest in the premises before drafting any documents for the lawsuit. Here is a chart demonstrating what you need:

If the building was transferred from a former owner to your client you need an assignment of rents and leases (and security deposits).

Sometimes the landlord will be a Limited Liability Company, but the deed will be in the name of a previous partnership. Not to worry, this is one of the few situations where it is not hazardous to your prima facie case for the deed to be in a different name than the petitioner. Limited Liability Company Law § 1007 (Effect of conversion) states:

(a) A partnership or limited partnership that has been converted pursuant to this chapter is for all purposes the same entity that existed before the conversion.

(b) When a conversion takes effect:

(i) all property, real and personal, tangible and intangible, of the converting partnership or limited partnership remains vested in the converted limited liability company;