Renters Rights?

Under rent regs, yes. Barring that, it's month-to-month if LL cashes check. Otherwise she's a holdover and legal action can be taken.

Why wouldn't LL just notify everyone that they're not renewing leases? Are there also rent-regged tenants, and they don't want the tenants to stay if they might otherwise be thinking about leaving?

And what building is this?

I am assuming this is a market-rate unit. If they take the check, then it establishes month-to-month tenancy. They can end such a tenancy with 30 days notice. I'm not sure, but I don't think the tenant needs to provide 30 days notice the other way if they want to leave. Rent may be raised any time, there is no need to have a reason to end month-to-month. I am not sure what happens come 1/31/11 if they don't accept a check: no month-to-month has yet been established until they presumably take the first such check?

In any case, this website has good info:

http://www.housingnyc.com/html/resources/attygenguide.html#3

If I were the management company, I'd continue accepting rent from through April or May. At that point, I'd ask her to sign a 1-year lease at a much higher price or vacate in 30 days. I could command higher rents from the market (rents are higher in the summer) and not worry about finding a tenant (turnover is much higher in the summer).

Right now, your friend has maximum leverage to get a new lease from this or some other owner. The management company knows this, does not want to have a showdown at this point -- happy to let your friend "win" by accepting their month-to-month rent. Until summer, that is.

Anyways, that's how I see it...