Hospital Can't Sublet to Nurses Without Landlord's Consent

(Decision submitted by Lawrence M. Furtzaig of the Manhattan law firm of Rosenberg & Estis, PC, attorneys for the landlord.) Facts: Landlord rented 15 rent-stabilized apartments to tenant Lenox Hill Hospital. The hospital in turn subleased the apartments to employees in order to provide low-cost housing near the hospital. Under the rent stabilization law, tenant, as a nonprofit organization, was allowed to rent apartments to affiliated subtenants without losing any rights if subtenants changed. New landlord sued tenant in 1991. Landlord claimed that tenant wasn't entitled to renewal leases without landlord's consent when subtenants vacated and that the law (``Chapter 940'') was unconstitutional. The Court of Appeals ruled that Chapter 940 was an unconstitutional taking of property. Landlord then asked the trial court to enforce the High Court's ruling by ejecting certain subtenants. The hospital claimed it was entitled to rent stabilization protection as a corporate tenant as long as the actual occupant was a primary resident. Court: Landlord wins. Tenant wasn't entitled to renewal leases under the so-called ``Cale doctrine,'' which allowed a corporate tenant to renew a stabilized lease if the designated person occupied the apartment as a primary residence. That doctrine doesn't apply when a corporate entity sublets to an endless stream of employees. The subtenancies in this case were covered by Chapter 940, which was now declared unconstitutional.

Manocherian v. Lenox Hill Hospital: NYLJ, p. 29, col. 4 (9/5/95) (Sup. Ct. NY; Schackman, J)