The respondent, April Keys, moves to dismiss the instant holdover proceeding alleging that she is the sole tenant of the premises in question who was not named or served in the underlying foreclosure action or in the Ten Day Notice to Quit, affidavit of service, or the petition. The petitioner submits no opposition.

The holdover proceeding was commenced on or about March 6, 2008. The petitioner came into possession of the premises located at 143 Carolina Avenue, Hempstead, New York, by way of public judgement of foreclosure sale, on October 22, 2007. On January 30, 2008, a Ten Day Notice to Quit with a copy of the Referee's Deed was served on the respondent.

The respondent is the sole tenant under a Section 8 lease that is for a term of one year from September 1, 2007 to August 31, 2008. This was the second lease executed by the respondent for these premises. The previous lease was from November 1, 2006 to October 31, 2007. (It appears that the first lease was renegotiated before the expiration of the term, lowering the monthly payment for the respondent but also making her responsible for the payment of [*2]utilities at the premises.) The respondent asserts that she was the sole tenant of the premises and therefore she should have been named a party to any foreclosure proceedings.

The Court finds that the respondent was properly served with the Ten Day Notice to Quit with a copy of the Referee's Deed, in that a Mrs. Aiken (who refused to give her first name) was served by the process server. The docket reflects that Mrs. Aiken is an a/k/a/ for April Keys and the caption was amended to reflect that fact. Accordingly, the respondent was properly served with all papers in regard to the holdover proceeding.

The respondent was not properly named as a party in the foreclosure proceedings though. "In order to cut off the interest of an occupant of the premises, the occupant must be named as a party in the foreclosure proceedings." Mers, Inc. v. Bernard, 18 Misc 3d 1134(A) [SCt, Nassau County 2007] (citing Douglas v. Kohart, 196 App Div 84 [2d Dept 1921]; and Krotchka v. Green, 121 Misc 2d 471 [Yonkers City Ct, 1983]). The respondent was not named in the foreclosure proceedings and therefore her rights were "not affected by the judgment of foreclosure and sale." Id. (Citing Polish National Alliance of Brooklyn, U.S.A. v. White Eagle Hall Co., Inc., 98 AD2d 400 [2d Dept, 1983] and Empire Savings Bank v. The Tower Co., 54 AD2d 574 [2d Dept, 1976].

The respondent, as the sole tenant, is a necessary party to the foreclosure proceeding (see 78 NY Jur. 2d Mortgages §588). As a necessary party who was not named in the foreclosure proceeding, the respondent's rights were "unaffected by the judgment and sale, and the foreclosure sale may be considered void as to the omitted party ." 6820 Ridge Realty, L.L.C. v. Goldman, 263 AD2d 22, 26 [2d Dept, 1999] (see Si Bank & Trust v. Sheriff of the City of New York, 300 AD2d 667, [2d Dept, 2000]). Thus, a tenant or occupant who was not named as a party in the foreclosure action retains his or her possessory rights and a right of redemption. Id.; and Davis v. Cole, 193 Misc 2d 380 [SCt NY, 2002].

As stated in Finkelstein and Ferrara, Landlord and Tenant Practice in New York § 2:76:

Lease Subject to Foreclosure-Typically, the possessory interests of a rent paying tenant who was not made party to a foreclosure action will not be affected by a judgment of foreclosure- the purchaser will take title subject to any rights or interest which the tenant may establish. When a tenancy is not expressly extinguished by the foreclosure judgment, the subsequent purchaser generally is not entitled to actual possession until the tenancy's termination.

The lease would be extinguished if the lease contained a subordination clause but only if the tenant were duly named and served as a party defendant (Finkelstein and Ferrara, Landlord and Tenant Practice in New York § 2:77). The lease does not have a subordination clause but even if it contained one, the foreclosure action would have no effect on the tenant's lease because she is a necessary party and would still have to be named and served in the foreclosure action.

The foreclosure action has a designation for "John Doe" so as to include any unknown [*3]persons. The fact that the respondent, as a necessary party, was not named or served in the foreclosure proceeding would not be remedied, even if she, as an unknown person, were considered to be a "John Doe." CPLR 1024 permits a plaintiff to proceed against an unknown party but would be inapplicable in regard to the respondent. "Before naming a party as a "John or Jane Doe", the plaintiff must establish that it has made a genuine effort to ascertain the name of the party but has been unable to do so." Mers, Inc. supra, citing Tucker v. Lorieo, 291 AD2d 261 [1st Dept, 2002] and Porter v. Kingsbrook OB/GYN Associates, P.C., 209 AD2d 497 [2d Dept, 1994]. If the plaintiff knew or could have discovered the actual names of the parties named as "John or Jane Doe" with the exercise of due diligence, then the summons naming such parties as unknowns is jurisdictionally defective. Id. citing ABCKO Industries, Inc. V. Lennon, 52 AD2d 435 [1st Dept, 1976]

Because the lease contains no subordination clause, the tenant's leasehold can only be terminated in accordance with section 8 guidelines, by showing a cause to terminate the lease as well as giving the requisite notice.

24 C.F.R.982.310 (a) addresses termination of a section 8 tenancy.

24 C.F.R. § 982.310 states:

(a) During the term of the lease, the owner may not terminate the tenancy except on the following grounds: (1) Serious violation (Including but not limited to pay rent or other amounts due under the lease) or repeated violation of the terms and conditions of the lease: (2) Violation of federal, State or local law that imposes obligations on the tenant in connection with the occupancy or use of the premises; or (3) other good cause.

( d) Other Good Cause

(1) "Other good cause" for termination of tenancy by the owner may include, but is not limited to any of the following examples:

(iv) A business or economic reason for termination of the tenancy (such as sale of the property, renovation of the unit or desire to lease the unit at a higher rental).

(2) During the initial lease term, the owner may not terminate the tenancy for "other good cause", unless the owner is terminating the tenancy because of something the family did or failed to do.

24 C.F.R. § 982.310 (e) addresses the notice requirementsfor terminating a section 8 tenancy.

24 C.F.R. § 982.310 (e) entitled Owner Notice states: [*4]

(1) Notice of Grounds

(I) The owner must give the tenant a written notice that specifies the grounds for termination of tenancy during the term of the lease. The tenancy does not terminate before the owner has given this notice, and the notice must be given at or before commencement of the eviction action.

(ii) The notice of grounds may be included in or combined with any owner eviction to the tenant.

(2) Eviction Notice.

(I) Owner eviction notice means a notice to vacate or a complaint or other initial pleading used under State or local law to commence an eviction action.

(ii) The owner must give the PHA a copy of any owner eviction notice to the tenant.

24 C.F.R. § 982.310 (f)) entitled Eviction by Court Action states:

The owner may only evict the tenant from the unit by instituting a court action.

The Court finds that the petitioner did not comply with 24 C.F.R.982.310, in that the petitioner did not give the requisite notice to the tenant and PHA showing a cause to terminate the lease. Accordingly, the respondent's motion to dismiss is granted.

So Ordered:

/s/

District Court Judge

Dated:July 1, 2008

CC:Nassau/Suffolk Law Services Committee, Inc.

Ezratty, Ezratty & Levine, LLP

Steven J. Baum, P.C.

SF/mp