Daily Development for Tuesday, October 31, 2006
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri

LANDLORD/TENANT; USE; RESIDENTIAL ONLY: Tenant's use of a rent stabilized apartment as a day care did not violate the provisions of a lease prohibiting non-residential use.

 Marick Real Estate, LLC v. Ramirez, 812 N.Y.S.2d 210 (Supp.App.Term 2005).

A landlord attempted to recover possession of a rent-stabilized apartment based on violations of material terms of the lease when the tenant used the apartment as a "child care business". The material terms the landlord claimed were violated included (i) restriction of the use of the property for residential purposes, (ii) barring any actions that could increase the landlord's insurance costs and (iii) prohibitions against violations of law. The court held that the state's interest in promoting availability of home child care by restricting government interference and private covenants outweighed landlord's concerns regarding lease violations.  The state’s interest is articulated in Social Services Law Sec. 390(12), which restricts public agencies from regulating against group care homes.

Comment 1: The issue of whether a covenant against group care homes violates public policy in New York is not exactly judge-made law.  The original case establishing the proposition, Crane Neck Ass’n v. New York City/Long Island County Services. Group, 41 N.Y.S.. 2d 154 (N.Y. 1984) interpreted a state statute that prohibited state and local government from prohibiting lawfully licensed group care homes in residential neighborhood.  The New York Court of Appeals, held  that the policy of the statute also applied to private restrictions, although the statute did not so state specifically.  The U.S. Supreme Court denied certiorari: 105 S. Ct. 60.

Since then the same ruling has applied to acts by homes associations interpreting their residential only restrictions so as to preclude group care homes.  Quinnones v.  Board of Managers of Regal Walk Condominium I, 673 N.Y.S. 2d 450 (A.D. 1998).  

Comment 2: To the editor, all of this appears to be essentially imposing on private individuals the public burden of providing group care facilities, by restricting the ability of parties to contract privately to restrict such facilities.  If the state wants or needs such facilities, it can spread the cost to the public at large through the process of eminent domain.

But the editor’s argument is weakened significantly if New York does not regard servitudes as “property” that are compensable in eminent domain.  As the editor understands this issue, it is divided in the state courts and not resolved at the U.S. Supreme Court level.

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