A Signed Lease Renewal Can Cost a Family Member Otherwise Legitimate Succession Rights

A landmark decision by the Appellate Division, First Department – affirming a series of decisions by the Appellate Term, First Department – has dramatically changed the landscape for family members seeking succession rights to a rent stabilized apartment. The case, Third Lenox Terrace Tower Associates v. Cynthia Edwards, 2012 NY Slip Op 00400 (1st Dept. 2012) stands for the proposition that where a tenant of a rent stabilized apartment executes a renewal lease after the tenant has moved out of the rent stabilized apartment it will divest a remaining family member of an otherwise valid succession claim. Succession to rent stabilized apartments is a contentious issue. Landlords resent that they must provide a below-market apartment to a family for generations. Tenants count on succession to permit family to maintain a rent stabilized apartment so that the family home remains in the family.

Burden of Proof for Family Succession Rights

As a general matter in order for a family member (as defined by the rent stabilization code) to succeed to a rent stabilized apartment that family member must prove that the family member and the tenant each resided in the rent stabilized apartment, with each maintaining it as a primary residence, for the two years immediately prior to the tenant of record permanently vacating the apartment. 9 NYCRR 2523.5(b). It is the permanently vacating of the apartment that is the rub. It has often been the custom for tenants of rent stabilized apartments to continue to execute lease renewals after moving out even when there is a family member left behind with an otherwise valid succession claim. In succession cases in the past, trial courts simply looked to the primary residence of the purported successor and the date on which the tenant of record permanently vacated to determine a succession claim. The Appellate Division has held that when a tenant signs a lease renewal – even when there is no question that the tenant of record no longer occupies the subject unit - the purported successor cannot claim that he/she and the tenant of record each maintained the subject unit as a primary residence because the tenant cannot be said to have vacated if he/she signed a renewal lease.

Beware Signing a Lease Renewal After Moving Out

Members of the landlord-tenant bar were anxiously waiting for a determination from the Appellate Division on this issue after the Appellate Term had surprised lawyers by releasing decisions holding that otherwise valid succession claims were rejected because of the execution of a renewal lease. See generally, Clinton Realty Associates v. De Los Angelos, 29 Misc.3d 142(A), 920 N.Y.S.2d 240 (1st Dept. App.Term 2010).Many tenants are not skilled in the intricacies of the rent stabilization code. Many tenants may believe that signing a lease renewal after moving out of the rent stabilized apartment is not problematic because it is the family’s apartment and there are family members still living there. Tenants should beware. Consider these facts:

1. A father and son live in the same rent stabilized apartment for 25 years with both maintaining the apartment as a primary residence;
2. The father decides to buy a house in the suburbs and moves out never again returning to the subject apartment and;
3. When the lease renewal next comes the son asks his father what to do and the father simply picks up the lease renewal from his son and signs it and sends it to the landlord.

In such a factual scenario the son will forever lose his otherwise valid succession claim because the father’s signature on the lease renewal means he has not permanently vacated and because he is no longer a primary resident, there can be no succession. This very harsh rule is bound to prevent some families from keeping an apartment in the family. Tenants and family members who hope to one day succeed should be very careful about who signs a lease renewal because valid succession claims will be failing. Landlords who hope to prevent succession claims should know to check who has signed a lease renewal after the tenant of record vacates.