E. Recovery of Use and Occupancy in Summary Proceedings Recovery of Use and Occupancy in Summary Proceedings

• Jurisdiction: New York

E. Recovery of Use and Occupancy in Summary Proceedings

Use and occupancy is now routinely granted in summary proceedings. The grant is based on the premise that persons in possession of the landlord's housing unit "should not be entitled to continued occupancy of the premises without paying for its use."¹⁵¹⁰ It serves to "maintain [the] status quo until [the] rendition of [a] final judgment."¹⁵¹¹ Occupants are not excused from the obligation of paying for the space and services received as an incidence of possession merely because they are involved in litigation with their owner.¹⁵¹² Fairness and necessity underline these rules; it is economically impossible for owners to render services indefinitely without receiving rent.¹⁵¹³

Historically, a petitioner could recover only possession and rent arrears in a summary proceeding; use and occupancy could not be recovered.¹⁵¹⁴ In 1976, in response to the holding in Seminole Housing Corp., the Legislature amended RPAPL 741(5) to provide that the relief demanded in a petition may include a request "for the fair value of use and occupancy of the premises if the notice of petition contains a notice that a demand for such a judgment has been made."¹⁵¹⁵ Although not part of a possessory judgment in a holdover proceeding, a separate money judgment may still be entered for use and occupancy at the conclusion of the proceeding.

The New York State Legislature did not amend the Uniform Court Acts, which still provide only for the recovery of possession and "rent due without regard to amount."¹⁵¹⁶ But because RPAPL 741(5) "is a general provision referring to all applications wherever made,"¹⁵¹⁷ the Legislature's intent is clear: expand the jurisdiction of all the courts that adjudicate summary proceedings to allow for an award of use and occupancy in addition to rent.¹⁵¹⁸ Use and occupancy may generally be awarded only if it has been demanded in the notice of petition and petition. ¹⁵¹⁹

Because RPAPL 741(5) does not restrict its application to proceedings in which a landlord-tenant relationship exists between the petitioner and respondent, it has been broadly interpreted as a procedural matter¹⁵²⁰ to permit an award of use and occupancy against any respondent in a summary proceeding, including tenants,¹⁵²¹ subtenants,¹⁵²² or licensees,¹⁵²³ whenever equitable principles so require.¹⁵²⁴ The substantive obligation to pay use and occupancy is imposed by law, based on a theory of quantum meruit.¹⁵²⁵

The court may also award use and occupancy to the owner in a squatter proceeding.¹⁵²⁶

The landlord has the burden of proving the value of the use and occupancy of the premises.¹⁵²⁷ The measure of damages for use and occupancy is generally the fair market rental value of the property¹⁵²⁸ during the time that possession of the property is retained.¹⁵²⁹ One way to determine the fair rental value is to introduce appraisal testimony based on comparable rentals.¹⁵³⁰ Objective factual support must accompany expert opinion used to establish comparable values. ¹⁵³¹

Absent proof of comparable rentals, the rental history of the premises may be used to furnish proof of the reasonable rental value of the premises.¹⁵³² Regardless of the method used to ascertain damages, the award is subject to adjustment based on the actual condition of the apartment and any breach of the warranty of habitability. ¹⁵³³

If the apartment is in a multiple dwelling, the absence of a proper certificate of occupancy bars the collection of use and occupancy, just as it is a bar to maintaining a non-payment proceeding or other action to recover rent.¹⁵³⁴ If the apartment is subject to rent regulation, use and occupancy may be awarded at the full market rent where the occupant against whom it is awarded is not the lawful tenant.¹⁵³⁵ If the tenancy has not ended, an award of use and occupancy against the lawful tenant may not be greater than the regulated rent,¹⁵³⁶ but if the landlord prevails in a holdover proceeding and proves that the tenancy was properly terminated, the tenant may be liable for fair market use and occupancy for the holdover period where the possessory judgment in the landlord's favor removes the apartment from rent regulation. ¹⁵³⁷

Because the obligation to pay use and occupancy is not based on an express agreement, a Section 8 tenant who holds over after the expiration of the Section 8 tenancy is liable for the full fair market value of the premises, as damages for use and occupancy. ¹⁵³⁸

In a summary proceeding, a judgment for use and occupancy can be awarded only as an incident to a judgment of possession; if the petition is dismissed, no award of use and occupancy may be made.¹⁵³⁹ Because a judgment may not be amended for equitable purposes after it is entered,¹⁵⁴⁰ a final judgment in a summary proceeding may not be amended to include use and occupancy accruing after the trial. ¹⁵⁴¹

Some courts award use and occupancy only from the commencement of the proceeding.¹⁵⁴² But landlords are properly entitled to recover use and occupancy "from the time the tenant begins to hold over without the landlord's consent." ¹⁵⁴³

The rule against apportionment, applicable to rents accruing during periodic tenancies and which renders tenants who vacate in the middle of the rental period liable for the full term, is inapplicable to use and occupancy. Use and occupancy is generally assessed only through the date the apartment is vacated. ¹⁵⁴⁴

To the extent that special or consequential damages might otherwise be recovered against a residential tenant who fails to timely vacate,¹⁵⁴⁵ these damages do not appear to fall within the ambit of RPAPL 741(5), which permits an award for the fair value of use and occupancy of the premises. ¹⁵⁴⁶

A tenant's failure to pay use and occupancy directed by the court can result in forfeiture of possession.¹⁵⁴⁷ This remedy is granted more often in the commercial sphere, though.¹⁵⁴⁸

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Notes:

^[1510] Albright v. Shapiro, 92 A.D.2d 452, 453, 458 N.Y.S.2d 913 (1st Dep't 1983).

^[1511] Id. See, e.g., Eli Haddad Corp. v. Cal Redmond Studio, Inc., 102 A.D.2d 730, 731, 476 N.Y.S.2d 864 (1st Dep't 1984).

^[1512] Albright, 92 A.D.2d at 453–54.

^[1513] See, e.g., Corris v. 129 Front Co., 85 A.D.2d 176, 177, 447 N.Y.S.2d 480 (1st Dep't 1982).

^[1514] Seminole Hous. Corp. v. M&M Garages, 47 A.D.2d 651, 651, 364 N.Y.S.2d 26 (2d Dep't 1975), aff'g 78 Misc. 2d 762, 762, 359 N.Y.S.2d 710 (App. Term, 2d Dep't 2d & 11th Jud. Dists...