II. The Tenancy The Tenancy
Jurisdiction | New York |
II. The Tenancy
A tenancy is created when a party is the exclusive occupant of premises under an agreement not created by deed,19 including not only tenancies through leases, but also tenancies at will20 (and indefinite in duration)21 and by sufferance.22 A statute can also create a tenancy.23 Although paying rent is not always a necessary incident of a tenancy, a tenancy is generally marked by the payment of rent in return for the exclusive right to possess premises.24 A legal tenancy can be created even in an illegal multiple dwelling,25 but it cannot be created when a statute bars a landlord from creating a tenancy except in accordance with the statute. Thus, for example, in a building operated by the New York City Housing Authority or in a Mitchell-Lama building, a tenancy can be created only in accordance with applicable procedures.26
A lease27 defines the rights and obligations between the parties, setting forth a clear term, for a fixed period of time, at an agreed-upon rental rate.28 The rental rate may be set forth as a computation based on a definitely ascertainable figure outside the lease's four corners.29 If the lease duration is silent or ambiguous, New York law will usually assign a short lease term, absent an agreement to the contrary.30 Some missing terms in a written lease can be filled in through parol evidence. But for a lease to be binding and enforceable, the essential terms—the term of the tenancy, the space to be leased, and the amount of the rent—must be agreed upon and either explicitly stated in the lease or readily discernible by objective means.31
Under "time-weathered principles of real property law,"32 delivery of a lease is a prerequisite to the lease's effectuation.33 "By requiring delivery, the law facilitates the true expectations of the parties by ensuring that the interest in the property is not conveyed until that moment when the parties so intend."34 Delivery of the lease can be established by evidence that shows that the parties did acts consistent with a delivered lease.35 In one case, a court held that the delivery of the lease to one co-tenant was not simultaneously effective upon the other co-tenant, who neither had keys nor ever took possession; having a separate and distinct interest required a separate delivery.36 However, "[l]egal delivery may be accomplished even in the absence of a physical delivery. Indeed, any evidence that shows that the parties to a written instrument intend that the same should be operative and binding upon them is sufficient in an action to enforce its provisions."37
Notwithstanding the rule requiring delivery for a lease to take effect, a rent-stabilized renewal offer becomes a binding lease agreement immediately upon the tenant's acceptance, even if the landlord did not intend the offer to be binding.38 In unregulated leases, "[i]t has long been established that 'a tenant's election to renew a lease must be timely, definite, unequivocal and strictly in compliance with the terms of the lease.'" This rule holds the tenant's exercise of the renewal effective so long as the tenant complies with its requirements, even if the parties later enter into substantial negotiations.39
There is a possible split in authority among the Appellate Division Departments over whether a landlord's renewal of a rent-stabilized lease after entry of a possessory judgment and issuance of a warrant of eviction serves to waive or vitiate the landlord's right to execute upon the warrant. The rule in the First Department is that a landlord's tender of a stabilized renewal lease, when made under compulsion of the Rent Stabilization Code, cannot serve to waive its right to seek judicial rescission of the lease based on the tenant's breach thereof.40 A contrary rule is followed in the Second Department, which holds that the tender and acceptance of a stabilized renewal lease creates a new tenancy and the landlord cannot seek possession of the premises based on the tenant's default under the previous lease.41
However, these rules may be reconciled, in part, if the First Department does not recognize rescission after there has been an acceptance.
When a non-regulated lease expires, the tenant no longer has any entitlement to possession, and the tenant must vacate.42
If a landlord accepts rent after the expiration of a lease term, a periodic month-to-month tenancy will be presumed43 under the same terms of the original lease,44 unless an agreement expresses otherwise.45 A landlord may refuse to keep the terms of the original lease and preserve the right to seek the full market value of the premises by endorsing the check "under protest" or "without prejudice."46 A month-to-month tenancy, commonly created by a rental agreement (distinguishable from a lease, which is usually for a longer term), is determined anew each month.47 A line of cases holds that the continued existence of a month-to-month tenancy depends on rental payments being made each month,48 but the better rule is that a landlord has the option to elect to treat the tenancy as existing even if rental payments are not made.49 This is because the landlord's common-law right to treat a holdover tenant as a tenant for a new term has been obviated by statute only with regard to a holdover after a lease for a term that was greater than one month.50 Because the term of a month-to-month tenancy is one month, a landlord's option to hold the holdover tenant for a new month has not been abolished by statute.
If a month-to-month tenant fails to pay rent, the landlord may choose between serving a 30-day notice of termination and commencing a holdover proceeding if the tenant fails to vacate, or serving a rent demand and commencing a non-payment proceeding upon the tenant's failure to pay.51
To determine whether an agreement is a net lease or a contract for management of property, the courts will look to the rights and obligations conferred on the parties by the agreement and whether exclusive control of the premises is conveyed to the tenant.52
A tenancy differs from a license, which does not convey a possessory interest.53 As the Court of Appeals has explained, "If the underlying instrument purports to yield up exclusive possession of premises against the world, including the owner, it is not a license, but creates an irrevocable estate or interest in the land."54
Because paying rent is an incident of a landlord-tenant relationship, accepting rent suggests a tenancy rather than a license.55 Thus, in Vitarelle v. Vitarelle,56 the court rejected a landlord's claim that the occupant was a mere licensee of the tenant whose tenancy had previously been terminated. The court noted that the landlord had set off his indebtedness to the occupant against "rent" and that he knew that the occupant had paid the real estate taxes on the house for three years. In most circumstances, however, a landlord's acceptance of rent from an occupant other than the tenant will not be held to create a new tenancy with the occupant.57
With respect to rent-controlled tenancies, family members who co-occupy an apartment with the record tenant may sometimes be considered tenants even if they never personally pay rent.58
As explained in Feder v. Caliguira, to qualify as a lease, an agreement must transfer absolute control and possession of property at an agreed rental.59 In that case, a written agreement governing the operation of a restaurant juke box was not considered a lease, even though the agreement twice referred to the defendant as a "lessee." The Court of Appeals held that there was no lease for the juke box because the defendant, the putative "lessee," had no control over the operation of the juke box and was under no legal obligation to pay rent to the plaintiff, the juke box owner. "What defines the proprietary relationship between the parties is not its characterization or the technical language used in the instrument, but rather the manifest intention of the parties."60
The occupancy of a squatter or licensee can ripen into a tenancy. Thus, if a landlord accepts rent from a squatter, the landlord acknowledges the existence of a tenancy.61 However, whether consideration is exchanged does not determine the nature of the parties' relationship as, for example, fees...
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