Chronic late rent payment real nuisance

Real Estate Weekly, Feb 2, 1993 by Sherwin Belkin

It is often said, with regard to meeting one's obligations, that "it's better late than never." However, an appellate court recently held, with regard to a tenant's obligation to pay rent, that this oft used phrase is not necessarily accurate. ,4 tenant's chronic failure to pay any rent or chronic tardy payment of rent may each constitute a nuisance warranting eviction if not adequately explained by the tenant.

The late payment versus non-payment distinction was raised as a tenant's defense and as the basis for a tenant's motion to dismiss in Estate of Sharp vs. Norwood. The owner had brought a nuisance proceeding predicated upon the tenant's repeated failure to timely pay rent. Although the tenant generally paid rent within the month that the rent payment was due, the tenant's tender of rent was not made on a timely basis. Rather, payment was made late in the month. The tenant continued to make late payments notwithstanding the owner's repeated service upon the tenant of formal written three-day demands for rent and, further, notwithstanding the owner having served the tenant with several notices of petition and petitions commencing non-payment proceedings. Rather than continuing to serve rent demands and petitions as the predicate for the commencement of non-payment proceedings, the owner opted, instead, to commence a nuisance holdover proceeding.

The tenant moved to dismiss the summary proceedings in Civil Court. The tenant's motion was predicated, in part, upon a claim that, so long as rent was paid within the month that it was due, the tenant's conduct merely constituted late payment (not complete non-payment), such that this repeated conduct by the tenant did not constitute the basis for a nuisance proceeding. The owner responded by pointing to appellate precedent indicating that chronic late payment of rent constituted a repeated violation of tenancy, such that a cause of action in nuisance was properly stated.

The Civil Court granted the tenant's motion and dismissed the petition finding that repeated late payment of rent could not, as a matter of law, constitute a nuisance. Rather than continue to endure the tenant's repeated violation of its obligation to pay rent on a timely basis, the owner opted to appeal.

The owner was represented before the Appellate Term, First Department, by Belkin Burden Wenig & Goldman (Martin J. Heistein and I on the Brief; Magda L. Cruz arguing the appeal). The Appellate Term unanimously reversed, reinstated the petition, and set the matter down for a trial for the purpose of hearing the tenant's excuse for her continuous late payment of rent.

The Appellate Term specifically held that:

"Chronic late payment and non-payment of rent may constitute a nuisance warranting eviction if not adequately explained by the tenant".

The Appellate Term specifically relied upon the appellate precedent presented by the owner's attorneys (Greene vs. Stone, 160 A.D.2d 367; Twenty-Fifth Realty Associates v. Griggs, 150 A.D.2d 155).

Absent the 'tenant being granted leave to take a further appeal, the matter will now return to the Civil Court for a trial, at which time the burden will shift to the tenant to explain her chronic late payment of rent. In the Civil Court the tenant's "excuse" related to her former spouse's delay in making monthly support payments. It should be noted that a similar "excuse" sounding in financial difficulties had been offered by the tenant in Greene vs. Stone. In that case, on remand from the Appellate Division. the Civil Court awarded a final judgment of possession to the owner, finding that a tenant's personal financial difficulties did not constitute a legally cognizable excuse for failing to timely pay rent. The type of excuse that may be found to adequately explain a tenant's late or non-payment must generally pertain to some failure on the part of the owner, warranting a withholding of rent by the tenant (i.e.. an owner's breach of the warranty of habitability or quiet enjoyment).

In Estate of Sharp we had also asked the appellate court to be cognizant of the wider public policy ramifications of permitting chronic late payments of rent. Taken to its logical extension, the tenant's position, if upheld, would have ultimately meant that no owner could demand payment of rent before the expiration of the month that rent was due. To accept the tenant's position would require the rewriting of basic rights and obligations by and between landlords and tenants. Fortunately, the appellate court stood firm in upholding that most basic tenant obligation; to pay rent at the beginning of each month.