Cal. Civ. Code § 776
Judgment
Operative Text
§ 776. Judgment. The court shall render a final judgment either a. Dismissing the petition for failure to affirmatively establish the allegations thereof or because of the affirmative establishment by the owner or a mortgagee or lienor of record of a defense or defenses specified in section seven hundred seventy-five of this article; or b. Directing that (1) the rents due on the date of the entry of such judgment from the petitioning tenants and the rents due on the dates of service of the judgment on all other residential and non-residential tenants occupying such dwelling from such other tenants, shall be deposited with the administrator appointed by the court, pursuant to section seven hundred seventy-eight of this article; (2) any rents to become due in the future from all tenants occupying such dwelling shall be deposited with such administrator as they fall due; (3) such deposited rents shall be used, subject to the court's direction, to the extent necessary to remedy the condition or conditions alleged in the petition and (4) upon the completion of such work in accordance with such judgment, any remaining surplus shall be turned over to the owner, together with a complete accounting of the rents deposited and the costs incurred; and granting such other and further relief as to the court may seem just and proper. A certified copy of such judgment shall be served personally upon each non-petitioning tenant occupying such dwelling and upon the city of New York by service as provided in subdivision five of section seven hundred seventy-one of this article. If personal service on any such non-petitioning tenant cannot be made with due diligence, service on such tenant shall be made by affixing a certified copy of such judgment on the entrance door of such tenant's apartment, store or other unit and, in addition, within one day after such affixing, by sending a certified copy thereof by registered mail, return receipt requested, to such tenant. Any right of the owner of such dwelling to collect such rent moneys from any petitioning tenant of such dwelling on or after the date of entry of such judgment, and from any non-petitioning tenant of such dwelling on or after the date of service of such judgment on such non-petitioning tenant as herein provided, shall be void and unenforceable to the extent that such petitioning or non-petitioning tenant, as the case may be, has deposited such moneys with the administrator in accordance with the terms of such judgment, regardless of whether such right of the owner arises from a lease, contract, agreement or understanding heretofore or hereafter made or entered into or arises as a matter of law from the relationship of the parties or otherwise. It shall be a valid defense in any action or proceeding against any such tenant to recover possession of real property for the non-payment of rent or for use or occupation to prove that the rent alleged to be unpaid was deposited with the administrator in accordance with the terms of a judgment entered under this section.
Under N.Y. Real Prop. Acts & Proc. Law § 776, when a court hears a petition about dwelling conditions, it must issue one of two types of final judgment: either dismissing the petition if the petitioners fail to prove their claims or if the owner, mortgagee, or lienholder successfully establishes a statutory defense, or directing that rents be redirected away from the owner and deposited with a court-appointed administrator. When a rent-redirection judgment is entered, those deposited funds are used to remedy the conditions identified in the petition, and any surplus remaining after the work is completed is returned to the owner along with a full accounting. Tenants who deposit rent with the administrator in compliance with such a judgment cannot be treated as having failed to pay rent for purposes of eviction or possession proceedings.
Plain English — not legal advice.
Under § 776, once a court enters a judgment directing rent deposits with an administrator, an owner's contractual or legal right to collect rent directly from tenants is suspended to the extent tenants comply with the judgment's deposit requirements. Operators who receive notice of such a judgment generally document all communications with the court-appointed administrator and track the accounting of deposited funds and remediation costs, since any surplus is returned to the owner upon completion of the required work. Owners and their managers typically consult qualified legal counsel to understand how the judgment affects existing lease obligations and to ensure that any defenses available under § 775 were properly raised before judgment was entered.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Section 776 provides tenants with a meaningful protection: if a court has entered a rent-redirection judgment and a tenant deposits rent with the court-appointed administrator as directed, that deposit satisfies the tenant's rent obligation, and the owner's right to collect that same rent directly becomes void and unenforceable. Importantly, § 776 explicitly establishes that proof of a proper deposit with the administrator is a valid defense against any eviction or possession proceeding based on nonpayment of that rent. Tenants who believe this provision applies to their building may wish to review the judgment's service requirements, consult a tenant-rights organization, or contact a local rent board to understand how the deposit process works in practice.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 13, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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