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Proprietary Lease Properly Terminated For Unauthorized Alteration, But Tenant-Shareholders Must Be Allowed A Final Opportunity To Cure

Tenant-shareholders in a cooperative installed a new air conditioning system, in breach of a provision of the proprietary lease that required that tenant-shareholders obtain written consent from the board of directors before installing any air conditioning system.  The record reflected that the tenant-shareholder had obtained written board approval for alterations in an application stating that “no work regarding … HVAC” would be performed, but then installed a central air conditioning system on the façade of the building without obtaining written consent.  The tenant-shareholders’ contention that the managing agent had provided oral assurances of approval, even if true, would not satisfy the proprietary lease’s requirement of written approval by the Board of Directors. Moreover, the written alteration application contained “a merger clause which provided that ‘all prior … understandings between the parties concerning the work are merged in this Agreement which alone expresses the understanding between the parties.’”

Based on the tenant-shareholders’ breach of the proprietary lease, the court held that the Cooperative was entitled to proceed in landlord-tenant court and to a judgment granting the Cooperative possession of the apartment.  However, “[i]nasmuch as the holdover petition was premised upon a breach of lease, tenant must be granted the remedy of a post-judgment cure.” This holding was predicated upon a statutory provision that in New York City, “[i]n the event [a holdover] proceeding is based upon a claim that the tenant or lessee has breached a provision of the lease, the court shall grant a ten day stay of issuance of the warrant [of eviction], during which time the [tenant] may correct such breach.”

The court also stated that if necessary to obtain complete relief, the tenant could bring a proceeding in State Supreme Court, implying that it could allow the tenant additional time within which to cure the breach so long as it was seeking to do so in good faith.  The case is Roger Morris Apt. Corp. v. Varela, 2016 N.Y. Misc. LEXIS 4385, 2016 N.Y. Slip Op. 51697(U) (App. Term 1st Dep’t Nov. 30, 2016).