Shareholder Tenant Must Pay Use and Occupancy While Lawsuit Is Pending

Cooperative shareholder tenant held shares of two apartments in a co-op building. He entered an agreement with the co-op by which he would receive a maintenance credit until certain repairs were completed by the co-op. The co-op gave tenant the credit through November 2015, then claimed repairs were completed. The co-op later advised tenant that he was in breach of the proprietary lease by failing to make monthly maintenance payments, and then sued tenant for breach of contract.

The court ruled for the co-op in 2019 and ordered tenant to pay $119,121 for past use and occupancy and to pay prospective use and occupancy while the court action remained pending.

Tenant appealed and lost. The obligation to pay use and occupancy didn't arise from an underlying contract between landlord and occupant. Instead, an occupant's duty to pay landlord for its use and occupancy of the premises is predicated upon the theory of "quantum meruit" and is imposed by law for the purposes of bringing about justice without reference to the intention of the parties. Considering the shareholder tenant's continued use and occupancy of the two apartments and the work performed by the co-op, the lower court correctly exercised its discretion in directing tenant to pay u&o while the action was pending. 

Tavor v. Lane Towers Owners: Index No. 700253/17, App. Nos. 2019-03429, 2019-09300, 2021 NY Slip Op 04676 (App. Div. 2 Dept.; 8/11/21; Austin, JP, Barrios, Connolly, Christopher)