Housing Court Decisions January 1997

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Case Caption:

Classic Properties v. Reif

Issues/Legal Principles:

Tenant entitled to attorney's fees on dismissed holdover where landlord elects not to pursue substance of holdover claim.

Keywords:

attorney's fees

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Saralee Evans

Date:

January 27, 1997

Citation:

NYLJ, page 28, col 2

Referred Statutes:

Real Property Law 234

Summary:

Tenant was previously successful in getting the holdover proceeding dismissed, not on substantive grounds, but on procedural grounds. Landlord did not recommence the holdover and elected not to pursue the breach of lease claims relating to the holdover. Instead landlord began a non-payment proceeding which in effect affirmed the tenancy. Tenant moved for attorney's fees based on the dismissal of the holdover and tenant's motion was granted by the lower court and upheld on appeal. Had landlord recommenced the holdover, tenant's motion for attorney's fees would have been premature because the substantive issues of the case would still be unresolved, and it would be too early to determine who the prevailing party would be. However, by commencing a non-payment proceeding, landlord put a definitive end to the holdover and thus tenant's motion for attorney's fees could go forward since the holdover was a resolved matter.

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Case Caption:

1199 Housing Corp.

Issues/Legal Principles:

Section 8 tenant allowed to challenge revocation of her rent subsidy in Housing Court where no hearing was held at agency administrative level.

Keywords:

Section 8

Court:

Appellate Term, First Department

Judge:

lower court: Hon. James Grayshaw

Date:

January 28, 1997

Citation:

NYLJ, page 25, col. 3

Referred Statutes:

none cited

Summary:

Tenant's federal rent assistance subsidy (Section 8) was revoked retroactively by her Mitchell-Lama Co-operative after the manager determined that a former employee had improperly placed the tenant's name ahead of other eligible tenants on the subsidy waiting list. The co-op did not terminate the tenancy on grounds of fraud. Rather, a non-payment proceeding was commenced to recover directly from the tenant the portion of the rent previously paid through a government subsidy. After trial the lower court found that the landlord's records were so poorly kept that it was not possible to determine whether the tenant's name was properly on the list. The court granted the petition holding that it lacked jurisdiction to resolve the issues before it other than whether arrears were owed. The Appellate Term noted that no procedure exists for review of project revocations of a subsidy. Thus, no formal or informal hearing was ever held, nor was written notice sent to the tenant terminating her subsidy. The Appellate Term reversed the trial court and held that where there was no opportunity to contest the landlord's claim at the administrative level, tenant should be entitled to do so within the contours of Housing Court. Tenant's defense to the non-payment petition would be that her subsidy was improperly terminated under the controlling federal regulations. The appellate court remanded for a new trial and directed the tenant to pay pending use and occupancy.

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Case Caption:

Partnership 76 v. Sooknan

Issues/Legal Principles:

Landlord is not legally obligated to apply to DHCR to reclassify property as an apartment building in order to be deemed rent stabilized hotel.

Keywords:

hotels; rent stabilization

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Arlene Hahn

Date:

January 28, 1997

Citation:

NYLJ, page 28, col. 2

Referred Statutes:

RSC 2521.3; RPAPL 711

Summary:

The lower court improperly dismissed the nonpayment proceeding because the owner properly pled in the petition that the building was subject to hotel stabilization. In another action involving the same building it was determined that the structure is a hotel due to its certificate of occupancy and DHCR designation. The Appellate Term held that the other case suggests that the owner has the option to apply to DHCR for reclassification as an apartment building, but that the owner is not legally obligated to do so. The Appellate Term also found that the fact that tenants executed standard form stabilized renewal leases for an apartment, as opposed to a hotel, does not relieve them of the duty to pay rent.

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Case Caption:

Agard v. Cajigas

Issues/Legal Principles:

Landlord's termination notice against Section 8 tenant is defective for absence of "good cause" stated of tenant's regulatory status.

Keywords:

Section 8

Court:

Civil Housing Court, Kings County

Judge:

Hon. Finkelstein

Date:

January 29, 1997

Citation:

NYLJ, page 28, col. 6

Referred Statutes:

24 CFR 882.511(b) & 982.310(e); 42 USC 1437f(d)(1)(B)

Summary:

Tenants entered into possession under a Section 8 lease. Landlord terminated the tenancy with a 30 day termination notice which said that there was no lease in effect and the apartment was not regulated since it was in a two-family house. Tenants argued that the landlord did not show good cause to terminate the lease, and landlord failed to state the apartment was subject to Section 8 status. The court agreed with the tenant that a landlord cannot terminate a Section 8 tenant except for good cause pursuant to the federal statutes. Since the termination notice mentions no cause at all it was defective. The court also agreed that the petition must state that the tenant is a Section 8 tenant. Even though the apartment is not rent stabilized or rent controlled, it is still regulated by federal laws through the Section 8 subsidy, and a petition must state whether an apartment is regulated or not.

Case Caption:

Amalgamated Housing Corp. v. Urena

Issues/Legal Principles:

Landlord waived right to evict tenant for harboring a dog because landlord did not start holdover proceeding within thirty days of learning about the dog.

Keywords:

pets

Court:

Civil Housing Court, Bronx County

Judge:

Hon. Halprin

Date:

January 22, 1997

Citation:

NYLJ, page 26, col 6

Referred Statutes:

Administrative Code 27-2009.1

Summary:

Landlord brought a holdover against tenants who live in a co-op unit on grounds that they harbored a dog in violation of their occupancy agreement which prohibits pets. Tenants argued that landlord waived a right to proceed against them because landlord did not act within three months of gaining knowledge of the pet. Both sides agree that the landlord became aware of the pet on February 22, 1996 and that a notice of termination was served on May 1, 1996. Then the tenants paid May's rent. Both sides agree that a second notice of termination was served on May 13, 1996 and the petition served on June 13th with a return date of June 19th. The court held that the landlord failed to commence a summary proceeding within three months from the time the landlord acquired actual knowledge of the dog, the time period required under the statute. The court held that the commencement of a summary proceeding occurs when the notice of petition and petition are served, not when a notice to cure or notice of termination are served.

Notes:

It appears that the landlord worried that the cashing of May's rent would vitiate the first notice of termination, so the second notice of termination was sent. However, this delayed the time when the petition could be served. The three month time period is measured from the date the landlord discovered the dog up to the date the petition was served. In this case February 22nd to June 13th exceeds three months.

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Case Caption:

Wong v. Khoo

Issues/Legal Principles:

Landlord allowed discovery in alleged unlawful sublet case.

Keywords:

discovery

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Kibbie Payne

Date:

January 23, 1997

Citation:

NYLJ, page 27, col. 3

Referred Statutes:

none cited

Summary:

Landlord's request to conduct a deposition before trial in an alleged unlawful sublet case was upheld on appeal. The Appellate Term held, "The availability of examinations before trial in a summary proceeding brought under Real Property Actions and Proceedings Law has long been recognized" and depositions are "no longer viewed as inherently hostile to the nature of the summary proceeding."

Notes:

This case seems to imply that landlords can obtain discovery whatever the issue involved just by the mere asking. In fact, landlords must show "ample need." In nonprimary residency cases or succession rights discovery is generally granted. But otherwise the landlord should still be required to make a showing of why discovery is needed. (Discovery means getting to ask the tenant or occupant questions under oath before trial.) Unfortunately it is not as easy for tenants to get discovery because one has to show that there is no prejudice to the other side by the request. Landlords will always claim that the prejudice involved is a delay of the proceedings which is preventing the landlord from pursuing its case.

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Case Caption:

Weehawken Street Associates v. Kali

Issues/Legal Principles:

One-bedroom co-habitation of occupant with deceased prime tenant raises issue of whether occupant has succession rights.

Keywords:

succession rights

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Donna Mills

Date:

January 23, 1997

Citation:

NYLJ, page 27, col. 3

Referred Statutes:

9 NYCRR 2204.6(d)

Summary:

Dismissal of landlord's summary judgment motion was upheld on appeal. The Appellate Term held: "In light of the 25 year period of cohabitation by respondent and the deceased tenant of record in the controlled one-bedroom apartment, we agree that there are questions of fact as to whether respondent's relationship with the decedent entitles him to eviction protection under the succession regulations.

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Case Caption:

Immerblum v. Grefe

Issues/Legal Principles:

Subtenant in possession before Rent Stabilized apartment is purchased as co-op unit retains Rent Stabilized rights during sublease period, except for renewal rights.

Keywords:

overcharge; statute of limitations; subtenant

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Bernard Fuchs

Date:

January 14, 1997

Citation:

NYLJ, page 26, col 4

Referred Statutes:

Rent Stabilization Code 2520.11(1) & 2522.5(h)(5); CPLR 213-a & 203(d)

Summary:

Plaintiff signed a subscription agreement to purchase the Rent Stabilized apartment as a co-op apartment. Plaintiff also signed an interim lease and then sublet the apartment to Defendants for a one-year period ending December 1984. Plaintiff obtained the shares to the premises upon closing in May, 1984. Defendants argued that the apartment remained subject to Rent Stabilization until the end of December, 1984. The lower court disagreed and the Appellate Term upheld, finding that the apartment became deregulated when it reverted to a co- op status in May, 1984. Assuming Defendants' argument that it remained Rent Stabilized during the term of the sublease, the court found that it became de-stabilized even under this theory in December, 1984. Thus, any overcharge claim could not have accrued later than December, 1984 (a typo in the Law Journal states 1994). Since Defendants did not interpose a claim for overcharges until September 1989 by way of service of an amended answer to Plaintiff's lawsuit for use and occupancy, Defendants' claim was time-barred by the four-year statute of limitations for overcharges. (Defendants' original answer in 1986 lacked a counterclaim for rent overcharges in this action.) The Appellate Term further held that Defendants could not assert the claim as a set-off to Plaintiff's lawsuit, since Plaintiff was not seeking rent during the term of the sublease, but rather use and occupancy during the term of the holdover after the sublease expired. A strong dissent by Justice McCooe made a two-fold argument. Firstly, Plaintiff's original claim related back to the terms of the sublease, the amount of the rent in the sublease, and thus the overcharge was relevant, pertained to, and related back to the performance under the sublease. Secondly, Defendants held a unique status as sublessees of a Rent Stabilized apartment that had not yet become exempted at the time the sublease agreement was signed. The dissent argued that the Defendants retained a Rent Stabilized status up to December 31, 1984, pursuant to Section 2522.5(h)(5) of the Code, even thought this Section did not give the Defendants a right to a renewal lease similar to other Rent Stabilized tenants. Nonetheless, this unique status as Stabilized tenants for the duration of the sublease agreement should enable Defendants, according to the dissent, to assert a claim of overcharge.

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Case Caption:

Bernard v. Scharf

Issues/Legal Principles:

Landlord fails to show economic infeasibility of restoration costs after fire to premises.

Keywords:

economic infeasibility; owners

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Peter Wendt

Date:

January 14, 1997

Citation:

NYLJ, page 25, col. 1

Referred Statutes:

Administrative Code 27-2004(45), 27-2121, 110 of Civil Court Act

Summary:

On February 7, 1994, a fire severely damaged a 60 unit co-op building and rendered the premises uninhabitable. The tenants and proprietary lessee shareholders sued the Owners Corp to demand that the owners restore the building units to habitable conditions. Approximately 2/3rds of the shares of the Corporation are held by Leon and Morris Scharf, and three other family members. They also sponsored the conversion. Morris Scharf is the secretary of the Corporation and managing agent of the building. His father, Leon, is the Corporation president. The co-op offering plan required that the building be insured for $3 million. In 1991 Leon Scharf, acting as president of the Board of Directors, reduced the insurance to $2 million, 80% co-insurance policy. The Dept. of Buildings issued a vacate order and later the premises were sealed to prevent vandalism since all the residents were forced to evacuate the building. After trial the lower court directed the Corporation to restore the premises to safe and habitable condition. The court ruled that the Scharfs were "owners" under the Housing Maintenance Code making them personally responsible for making the necessary expenditures for repairs. The Corporation went bankrupt. The Scharfs contend that they cannot be ordered to restore the building because it would be economically infeasible. The lower court rejected this defense on grounds that they presented no proof of the costs incurred if the premises were not restored in relation to demolition costs or costs to relocate or compensate the tenants. The lower court also rejected the economic infeasibility defense holding that the Scharfs were estopped from asserting it because they brought the problems on themselves through their deliberate underinsurance of the premises. The Scharfs argued on appeal that the lower court's decision constitutes an uncompensated "taking" violative of the 5th and 14th amendments of the U.S. Constitution. The owners also claimed on appeal that the building was no longer "salvageable." The Appellate Term agreed with the lower court that the owners failed to submit proof that restoration costs would exceed all the other costs involved if the tenants were not restored. The Appellate Term also ruled that the owners failed to present any evidence that once restored the building would not generate enough income to recover the cost discrepancy in a reasonable time. The Appellate Term also affirmed the lower court's rejection of the "marine rule" which is applicable to marine insurance cases and sometimes is used with commercial buildings. It holds that if the cost of restoration exceeds one-half the value of the building before the damage, then there is deemed a total destruction that does not require repair. The court held that to apply the marine rule to residential property would thwart the strong public policy that housing be maintained in safe and habitable condition. The Appellate Term also agreed that the owners brought on the economic situation by their underinsuring the premises and that they cannot now cry economic infeasibility. They breached their duties to the shareholders in underinsuring the premises. The Appellate Term further ruled that the trial court's order to repair does not constitute an unconstitutional physical or regulatory taking because the statutory requirement that a landlord must keep residential property in good repair is a legitimate exercise of the police power. The Appellate Term also agreed with the trial court that the Scharfs are owners because they are "directly or indirectly in control of the premises." Justice McCooe offers a very strong dissent in favor of the owner's economic infeasibility defense. The dissent is so detailed that it will probably allow the owners to appeal to the Appellate Division and thereby delay further the tenants' restoration to the building.

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Case Caption:

Matter of H&R Executive Towers v. DHCR

Issues/Legal Principles:

Landlord's falsely filing apartment as vacant with DHCR supports a finding of wilfulness warranting treble damages in tenant's overcharge claim.

Keywords:

overcharges; treble damages

Court:

Appellate Division, First Department

Judge:

lower court: Hon. Lottie Wilkins

Date:

January 16, 1997

Citation:

NYLJ, page 27, col. 4

Referred Statutes:

Administrative Code 26-517(d); 26-516(a)

Summary:

The tenant commenced occupancy on May 1, 1984 but the landlord never served the tenant a Rent Registration form (RR-1) as required when the first Rent Stabilized tenant takes possession. Moreover, the landlord filed the initial rent registration with the DHCR in June, 1984 listing the apartment as vacant. Because the landlord failed to prove proper service of the RR-1 form and filing of the form, DCHR was authorized to review the owner's records back to 1980 to establish the legal regulated rent for the apartment. Upon doing so, the DHCR properly determined that the last two rent stabilized tenants of the apartment had also been overcharged. Thus, there was sufficient evidence in the record that the landlord's overcharge was wilful and treble damages were warranted.

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Case Caption:

Matter of Maya Realty Associates v. Holland

Issues/Legal Principles:

Landlord not allowed to charge tenants a premium on utilities once tenants were given individual electric meters to their own units.

Keywords:

electric usage

Court:

Appellate Division, 2nd Department

Judge:

lower court: Hon. Lane

Date:

January 16, 1997

Citation:

NYLJ, page 32, col. 2

Referred Statutes:

none cited

Summary:

Prior to 1984 the rents collected from the tenants included charges for electricity. The building had a single meter and the landlord paid the utility bill and each tenant paid the landlord for electricity pursuant to the terms of their lease. In 1984 the landlord applied for permission to become an "electrical exclusion" multiple dwelling whereby each unit would have their own electric meter and each tenant would pay their own utility bill. The DHCR granted the application and the conversion took place. During the transitional period interim rent adjustments were made and certain rent reductions were calculated. In 1989 the DHCR granted the final application approving the conversion, setting the amounts to be deducted from the monthly rents by a "per bedroom" formula and directed the landlord to cease collection of unspecified "electrical inclusion allowances" factored into the rent of each unit by the Rent Guidelines Board Orders. Landlord appealed. The court held that once the landlord no longer supplied electricity to its tenants, it was no longer entitled to charge a premium "reflecting the adjusted value of the service previously supplied and the DHCR was proper in directing the elimination of the allowance.

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Case Caption:

Quinn v. Kim

Issues/Legal Principles:

Tenants' damages include loss of quality of life where landlord's consistently refused to repair fire-damaged building.

Keywords:

damages; attorney's fees

Court:

Civil Court, New York County

Judge:

Hon. Jay Stuart Dankberg

Date:

January 15, 1997

Citation:

NYLJ, page 26, col. 5

Referred Statutes:

Judiciary Law 773; Real Property Law 234

Summary:

Landlord refused to repair six residential apartments that suffered fire damage after being held in contempt on three occasion and signing a stipulation and consent order agreeing to make the repairs. The issue before the court was whether quality of life and pain and suffering damages constitute "actual loss or injury" so as to be compensable in a contempt hearing. The court found that the tenants suffered an actual loss or injury and were entitled to both out-of- pocket actual monetary damages and all actual non-pecuniary damages for injuries demonstrated, plus reasonable attorneys fees, costs and expenses. This case is very long and goes on at great length analyzing the nature of the damages to which the tenants are entitled. It is a useful case on the issue of damages where a landlord incorrigibly fails to make repairs.

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Case Caption:

Matter of Dhiman v. Roldan

Issues/Legal Principles:

DHCR order upheld as rational; no grounds to transfer landlord's appeal of order to Appellate Division.

Keywords:

DHCR; Article 78; substantial evidence

Court:

Supreme Court, Queens County

Judge:

Hon. Milano

Date:

January 6, 1997

Citation:

NYLJ, page 29, col 4

Referred Statutes:

Rent Stabilization Law 26-514, 26-516; Rent Stabilization Code 2520.6(r), 2523.4, 2523.5, 2525.1, 2525.2, 2525.5, 2526.2, 2527.5; CPLR 7804(g), 7803(4)

Summary:

The DHCR instituted proceedings to determine whether the landlords of a two family home violated various provisions of the Rent Stabilization Law by harassing their rent stabilized tenant who has lived in the apartment since 1951. At a hearing before an Administrative Law Judge, evidence was presented that the landlords harassed their tenant by discontinuing basic services, telling her that she had to move out because she was a squatter, putting a new lock on the door and refusing to give her a key, leaving her without heat, failing to repair a leak in the roof, and leaving her without a functioning refrigerator and stove. The Deputy Commissioner imposed civil penalties on the landlords in the amount of $8,000. As a result, the landlords brought an Article 78 proceeding to challenge the Commissioner's order. The DHCR brought a cross motion to transfer the proceeding to the Appellate Division. The Court denied the respondent's cross motion because a transfer to the Appellate Division is mandatory only when a "substantial evidence issue is raised" at a formal, evidentiary hearing. The DHCR hearing before the Administrative Law Judge was discretionary, therefore, the appropriate standard of review in this instance is not whether the order was supported by substantial evidence, but whether the agency's determination has a rational basis in the record. Moreover, the Court dismissed the landlord's petition on its merits, finding that there was a rational basis for the DHCR Order. The Court held that "the determination of an administrative agency will not be judicially annulled unless it was arbitrary, capricious, or otherwise contrary to law."

Summary:

The case does not explain why Rent Stabilization laws are applicable to a tenant in a two- family home, since as a general rule Rent Stabilized tenants reside in buildings containing six or more units. The court probably meant the rent control laws were applicable given that the tenant resided in her apartment since 1951.

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Case Caption:

200-218 Soundview Realty Corp. v. Sherlock

Issues/Legal Principles:

Rent Stabilization laws apply to tenant/owner of unique class of Bronx housing.

Keywords:

primary residence; rent stabilization

Court:

Civil Housing Court, Bronx County

Judge:

Hon. Heymann

Date:

January 6, 1997

Citation:

NYLJ, page 27, col. 3

Referred Statutes:

Rent Stabilization Code 2524.4(c)

Summary:

The subject premises in this proceeding, the Glenz Estates in the Bronx, is a unique class of housing in the City of New York where the dwelling unit is owned by one party and the land is owned by another party. On May 1, 1992, the DHCR determined that depending on each individual home owner's initial date of occupancy, those that took occupancy prior to June 30, 1971 are considered Rent Controlled and those that took occupancy after this date are considered Rent Stabilized. At the time of the DHCR determination, the tenant/owner who resided in the subject premises was deemed to be Rent Stabilized. DHCR established the legal regulated rent to be $50.00/month, to be paid to the owner of the land. On November 8, 1994 the estate of the original tenant/owner sold the premises for $6,000. On the same day, the purchasers negotiated a new Bill of Sale, wherein they "resold" the premises for $6,000 to themselves and their son-in-law. The parties negotiated a payment schedule for the amount of the purchase price. On October 30, 1996, the parties re-executed another Bill of Sale, where the original purchasers relinquished all rights to the subject premises in consideration of $1.00. At the present time, the son-in-law is the only party with an interest in the subject premises. Petitioner who owns the land in the instant case, brought a holdover proceeding against the current owner of the subject unit on the grounds that he does not occupy it as his primary residence. In seeking to obtain a judgment of possession, petitioner asserts that since the previous purchasers never intended to reside in the subject premises as their primary residence, the rent stabilization chain is broken. The Court rejected this contention and held that since the current owner occupied the premises as his primary residence, he was protected by rent stabilization. In reaching this decision, the Court looked to how this issue would be resolved in a standard non- primary residence holdover proceeding. The Court determined that unless otherwise changed by statute, it is the premises, not the tenancy which remains rent stabilized. Applying this reasoning, the Court held that the intentions and/or conduct of the original purchasers did not divest the current owner/tenant of rent stabilization protection. In addition, the Court found basis for this determination in the "legislative declaration" which accompanied the law creating this special class of housing.

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Case Caption:

Giffuni Bros. v. Schlamb

Issues/Legal Principles:

Remaining roommate not entitled to stay in premises even if he pays all rent owed by prime tenant who vacated.

Keywords:

Roommate Law

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Marian C. Doherty

Date:

January 7, 1997

Citation:

NYLJ, page 25, col. 1

Referred Statutes:

RPAPL 749(3); RPL 235-f[6]

Summary:

The tenant of record abandoned his apartment leaving his roommate who was apparently evicted after the landlord obtained a warrant of eviction in a nonpayment proceeding. The lower court granted the roommate's motion to be restored to possession provided he pay $8,000 in rent arrears owed by the tenant. The roommate paid the arrears and the landlord appealed. The Appellate Term reversed holding that the issuance of the warrant annulled the landlord/tenant relationship. Since there was no legal relationship between the parties, the tenant of record's roommate is not entitled to possession of the premises, or permitted to tender rent arrears since this act would create a tenancy. The Court referred to the "Roommate Law" which provides that the respondent was not entitled to continue in occupancy upon the tenant's vacatur from the premises. In addition, the Court noted that the respondent did not claim or establish succession rights.

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Case Caption:

New York City Housing Authority v. Manley

Issues/Legal Principles:

Petition alleging narcotics usage need only show inference that premises were used for illegal purposes, not proof of commission of specific illegal acts.

Keywords:

illegal usage

Court:

Civil Court, New York County

Judge:

Hon. Gische

Date:

January 8, 1997

Citation:

NYLJ, page 26, col. 2

Referred Statutes:

RPAPL 711, 715; RPL 231(1); CPLR 3211(a)(7); CPLR 408; CPL 240.20; CPLR 405(a); CPLR 3024[b]

Summary:

On December 18, 1995 a police officer obtained a search warrant of respondent's apartment based on hearsay statements of a confidential informant. Following a search of the premises, the police officer seized heroin and assorted drug paraphernalia. At the time of the arrest, respondent and others were present in the apartment. Thereafter, the New York City Housing Authority brought a holdover proceeding to recover possession of respondent's apartment pursuant to a statute which permits an eviction where "the tenant herself, or others acting with the tenant's knowledge, permission or acquiescence, use the premises for an illegal trade or business." Respondent made a pre-trial motion seeking (a) to dismiss the petition, (b) suppress the evidence seized in what she claimed was an illegal search, (c) discovery and (d) an order to strike scandalous materials from the petition from information taken in the search warrant. Respondent's motion to dismiss was on grounds that the petition failed to state facts supporting an "inference" of narcotics usage for sale (as opposed to personal usage). Respondent claimed that the small amount of narcotics seized by the police do not support a conclusion that she was engaged in the narcotics trade. Respondent acknowledged that at best, the amount of heroin seized supported an inference of personal use. Respondent also argued that the seizure included "common household items" which cannot serve as a basis for the conclusion that the premises were used to sell heroin. In denying this motion, the Court held that the amount of narcotics recovered is not dispositive and "there is no magical formula or threshold amount of drugs that must be recovered in order to state a cause of action for eviction based on illegal trade of controlled substances." The court also noted that the heroin seized was in 80 separate glassine envelopes, a fact supporting possession for sale rather than personal consumption (the latter is not a grounds for a holdover under RPAPL 711(5)). The respondent also argued that there were no specific factual allegations in the petition to support her consent to any alleged illegal drug trade in the apartment. The Court held that the petitioner need not prove that the respondent was actually involved in the illegal business, only that she had either "constructive knowledge" or "passive acquiescence" of such activity. The fact that the property was recovered from an apartment that was under respondent's dominion and control was sufficient to satisfy the petitioner's burden. Instead, the Court looked to the all of the facts taken together in order to determine that a sufficient inference existed in the petition that an "illegal trade or business" was being conducted. Secondly, the Court also denied respondent's motion to suppress the evidence which she argued was obtained without probable cause. The Court refused to apply the exclusionary rule, which would suppress the use of such evidence, in the civil context. Thirdly, the Court denied respondent's request for pre-trial discovery because her request was not specific and did not demonstrate "ample need" for material that was not within her personal knowledge. Furthermore, the Court noted that "the granting of discovery is still the exception, not the norm in summary eviction proceedings." Finally, the Court denied respondent's motion to strike from the petition, references to and copies of, the search warrant. The Court held that such references were material to the petition and are not the type of allegations which should be stricken.

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Case Caption:

Jones v. Peterson

Issues/Legal Principles:

Landlord could not bring legal proceedings against non-regulated tenant when she denied landlord entry to enter her apartment to conduct an appraisal.

Keywords:

access to apartment; life estate; illegal business;

Court:

Supreme Court, Nassau County

Judge:

Hon. R. Schmidt

Date:

January 8, 1997

Citation:

NYLJ, page 28, col. 3

Referred Statutes:

CPLR 3211(a)(7), (8); CPLR 103(c); CPLR 403(d); RPL 231(1); RPAPL 711(5)

Summary:

Petitioner brought this proceeding by an order to show cause for an order granting access to the leased premises for the purpose of obtaining an appraisal. The petitioner contested the respondent's claim that she has a life estate in the subject premises. As a result, the respondent made a cross motion to dismiss the petition for lack of jurisdiction and on the grounds that it fails to state a cause of action. The Court converted the proceeding into an action because although there is no statutory authorization for a landlord to commence a special proceeding to gain access to the leased premises, the proceeding was properly commenced by service of the order to show cause in lieu of a petition. The Court denied landlord's request for access, holding that at a minimum, there exists a landlord/tenant relationship between the parties. Absent a contrary lease provision, the tenant has "sole and exclusive right to occupation and control of the premises." The Court noted that there are several instances where a landlord may enter the premises: when the right to do so is reserved in a lease; when the tenant consents to such an entry; to make repairs; and to demand rent. A landlord, however, must obtain the tenant's consent in order to enter the subject premises. Furthermore, the Court stated that the petitioner's appropriate remedy would be to commence a proceeding to dispossess a tenant who is wrongfully denying possession. In such a proceeding, the Court would determine the status of the respective parties. Finally, the Court addressed the petitioner's claim that the lease was void because the respondent was allegedly subleasing an illegal basement apartment on the premises. Petitioner relied on a law which prohibited "illegal trade or business." The Court held that petitioner's reliance on this law was misplaced. The alleged collection of rent for an illegal basement apartment is not an "illegal trade or business" within the meaning of the statute and was an insufficient ground for eviction.

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Case Caption:

225 Eastern Parkway Associates LP v. Mitchell

Issues/Legal Principles:

Landlord's mistaken tender of lease renewal during pendency of holdover proceeding, does not nullify the holdover proceeding.

Keywords:

illegal sublet; non-primary residence; succession rights

Court:

Civil Housing Court, Kings County

Judge:

Hon. Finkelstein

Date:

January 8, 1997

Citation:

NYLJ, page 27, col. 5

Referred Statutes:

RSC 2523.5(b)(1); RPL 235-f(3)

Summary:

Landlord brought a holdover proceeding against named tenant, alleging he was in violation of a substantial obligation of his tenancy for subletting or assigning his interest in the premises without permission of the landlord. The tenant's daughter appeared pro se and claimed to be the rightful tenant of the apartment, which she occupied as her primary residence for many years. Thereafter, landlord requested permission to conduct an oral deposition of the tenant's daughter, as is customary practice in non-primary residency cases. Thereafter tenant's daughter retained counsel who moved to dismiss the proceeding with prejudice based on a variety of legal theories, none of which passed muster with the court which held that the facts required a full- fledged trial before a judge. There was no dispute that the lease for the subject premises had always been sent in her father's name. However, Ms. Mitchell alleged that she has lived there with her parents until their divorce many years ago. After the divorce she continued to reside at the premises with her mother who died in 1995. She claimed that since her parents' divorce, although all renewal leases were issued in her father's name, it was her mother alone who signed them. After terminating Mr. Mitchell's tenancy, landlord mistakenly sent a renewal lease which Mr. Mitchell and his daughter signed and returned. In support of her motion to dismiss, Ms. Mitchell's claimed that when the landlord offered to renew her father's lease (after commencing the holdover proceeding), the instant action was voluntarily terminated. The Court held that "the mere offer to renew a lease does not vitiate a holdover action". Ms. Mitchell also asserted that the landlord's allegation that her father illegally sublet the premises to her supported her claim that she has succession rights to the premises. In addition, Ms. Mitchell claimed that since she lived with her now deceased mother for the requisite period of time required by law, she is entitled to a lease in her name. The Court rejected this contention because the tenant of record, Mr. Mitchell must have "permanently vacated" the apartment. Although Mr. Mitchell may have another residence, there is no evidence that he has relinquished his interest in the subject premises. The Court also looked at the fact that Mr. Mitchell "apparently signed the latest renewal lease." The Court emphasized that the landlord presented evidence that Ms. Mitchell in fact lived at a different address at the time of her mother's death. The Court denied the motion to dismiss, holding that there were "genuine, substantial issues of fact which require a trial on the merits."

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Case Caption:

Annivan v. Lijen Realty Corp.

Issues/Legal Principles:

Small Claims Court found that Landlord's wrongful removal of tenant's possessions gave rise to treble damages and gave tenant option to transfer case to Civil Court.

Keywords:

treble damages; small claims; warrant of eviction; subject matter jurisdiction

Court:

City Court of Mount Vernon, Westchester County

Judge:

Hon. Seiden

Date:

January 8, 1997

Citation:

NYLJ, page 28, col. 5

Referred Statutes:

RPAPL 853; UCCA 1805(a),(b)

Summary:

Plaintiff in this Small Claims action was one of two named tenants in defendant's apartment. The lease required that the "tenant" pay the monthly rent. However, the landlord accepted and recorded their payments separately. Plaintiff's roommate often did not pay his share at all or paid less than the amount due. As a result, the landlord brought a non-payment proceeding seeking possession of the premises against plaintiff's roommate only. The landlord's books showed that the plaintiff paid his full share of the rent during the period in question. After the warrant of eviction was issued, the defaulting tenant moved out of the apartment and plaintiff remained in possession. Thereafter, landlord entered the apartment and put all of its contents out on the curb. Although plaintiff suffered a loss greater than $3,000, he limited his damages so that he could proceed in Small Claims Court. The landlord conceded that the warrant was not intended for the plaintiff, however he counterclaimed for the unpaid rent. The Court held that "there is no question that in the absence of a warrant of eviction against plaintiff, there were no lawful grounds for defendant entering and removing plaintiff's belongings." In addition, the Court recognized that a judge may award the plaintiff treble damages. Moreover, in determining whether treble damages would be an appropriate remedy, the Court pointed out that the landlord did not dispossess the tenant by unlawful means, rather he intentionally obtained a warrant against one tenant and then proceeded to "knowingly" remove all of the plaintiff's possessions from the apartment. However, the Court stated that Small Claims Court is under a jurisdictional limitation and may not award the plaintiff more than $3,000. However, the Court gave the plaintiff the option of accepting damages minus rent arrears or transferring his case to Civil Court where he treble damages could exceed $3,000.

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Case Caption:

Central Park South Associates v. Haynes

Issues/Legal Principles:

First Rent Stabilized tenants of decontrolled apartment lose stabilization rights where the rent exceeds $2,000 per month

Keywords:

rent control; vacancy de-control; overcharge

Court:

Civil Court, New York County

Judge:

Hon. Jay Stuart Dankberg

Date:

January 10, 1997

Citation:

NYLJ, page 26, col. 5

Referred Statutes:

Admin. Code 26-504.1 & 26-403(e)(2)(k); McKinney's Unconsolidated Law 8629(e);

Summary:

The tenants took possession in June, 1995 pursuant to a one-year lease which clearly stated that the apartment was not subject to Rent Stabilization laws. The prior tenant was rent controlled and was decontrolled upon her vacancy (which occurred by way of her death) in 1995. DHCR records show that at the time of her death the maximum base rent was $1,588.83. In 1995, the NYC Rent Guidelines Board authorized an increase of 35% above the maximum base rent as the permitted initial regulated rent. The new tenant's rent was placed at $2,144.92 per month which the landlord argued was legal and permissible due to Local Law #4 (Section 504.1 of the Rent Stabilization Law), an amendment to the Rent Stabilization Code, which provides that apartments becoming vacant after April 1, 1994 having regulated rents exceeding $2,000 per month are excluded from future regulation. The tenants claim that the $2,144.92 is an overcharge and that they should be subject to Rent Stabilization and given a renewal lease. The landlord refused to renew the lease and brought a holdover. They argue that since the building was built in New York City before 1947, the first applicable rent regulation was the NYC Rent Control Law and that upon vacancy the apartment became decontrolled through the Emergency Tenant Protection Act of 1974 (ETPA). Unlike 504.1 of the Rent Stabilization Law, the ETPA excludes from protection only those apartments becoming vacant between July 7, 1993 and October 1, 1993 and having a legal regulated rent of $2,000 as of October 1, 1993. The tenants argued that since the vacancy occurred after the window period (as defined by the ETPA) and since the legal regulated rent was not $2,000 or more as of October 1, 1993, the ETPA high rent deregulation is inapplicable, making the tenants covered under rent stabilization through the ETPA. The court held that the application of the ETPA resulted in the previously rent controlled apartment becoming subject to Rent Stabilization Law upon vacancy in 1995. But, it then became deregulated when the rent exceeded $2000. The tenants argued that although their apartment appears to fit the statute's definition of exclusion from Rent Stabilization, that this law should never be applied to the first stabilized tenant after an apartment is decontrolled. Rather it should only be applicable (i.e., deregulate when rent exceeds $2000 per month) when a there's a vacancy in an already stabilized apartment. The court analyzed the ETPA's relationship to the Rent Stabilization Law, as well as DHCR's position on the new law, and ruled against the tenants, holding that there was no reason to extend the tenants different treatment simply because they were the first rent stabilized tenant when the statute's criteria is otherwise applicable to their apartment. The court noted that it would have been wise if the landlord had filed appropriate forms with the DHCR to deregulate the vacancy decontrolled apartment, but failing to do so did not effect landlord's holdover proceeding.

TenantNet Notes:

In this case the court views the apartment as going from rent controlled and then for an instant becoming Rent Stabilized at a rent higher than $2,000, and then simultaneously becoming deregulated. In the court's view the apartment is instantly exempted from the Rent Stabilization Law when the rent is set above the $2,000 threshold amount, a provision of the Rent Regulation "Reform" Act of 1993 and NYC Local Law 4 of 1994. The legislative enactments were quite clear that two things must occur before an apartment may be deregulated pursuant to the "High Rent" provisions: a) the rent must be higher than $2,000 and b) the tenant must vacate the unit. In a situation where a tenant vacates a unit that was renting for under $2,000 and the landlord is able to raise the rent, either through normal guideline increases or improvements, the rent would then become more than $2,000, but the second requirement does not exist as the new tenant would then be in occupancy. So, in the way the law is written, the unit cannot become deregulated until the next vacancy occurs.

However DHCR, at the behest of a particular landlord law firm, changed their interpretation of the law in 1995 stating the agency would "deem" the increase took place and "deem" the new rent was over $2,000 at the moment the prior tenant vacates. This is oxymoronic and the problem with DHCR's (and now the court's) analysis is that it fails to take into account the fact that there is no rent until a new lease is signed, and there can be no "legal regulated rent" unless reserved in a lease. How could it be otherwise? Neither the landlord nor a potential tenant knows beforehand if the new tenant will take a one or two year lease, so there's no way of knowing what the new rent will be. Moreover, as per the Rent Stabilization Law, guideline increases can only be taken "pursuant to a lease." If a rent controlled apartment is decontrolled upon vacancy, the owner can make all the renovations it wants in order to increase the rent. However, the new rent will not take effect or be registered just nakedly on its own. The rent does not become the legal rent until the owner signs a lease with a tenant in order to give that rent legitimacy. That lease must be a Rent Stabilized lease. Once a lease is in effect, then according to the High Rent provisions of the law, an owner can exempt the premises if the rent in the lease exceeds the lawful amount, but only on the next vacancy. As an initial Rent Stabilized leaseholder the tenant would have the right to take a claim to the DHCR for overcharge. This case is significant because it attempts to deprive the tenant in circumstances like this to challenge rent which allegedly exempts premises from stabilization coverage in the courts or at the DHCR. It should also be noted that the Judge in this matter, Hon. Jay Stuart Dankburg, left the bench on December 31, 1996 and reportedly took a new job at a NYC Landlord law firm. This is a grave set-back to tenant's rights.

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Case Caption:

Sorkin v. Verdoliva

Issues/Legal Principles:

Tender of rent for period after termination notice expired vitiated the termination notice's effectiveness.

Keywords:

termination notice; waiver

Court:

Civil Court, Kings County

Judge:

Hon. Finkelstein

Date:

December 30, 1996

Citation:

NYLJ, page 25, col 3

Referred Statutes:

RPAPL 735(2)(b)

Summary:

Landlord brought a licensee holdover proceeding against respondent, who is the son of the deceased tenant. The respondent made a motion to dismiss on the grounds that the termination notice was vitiated by his tender of rent which covered a period after the termination notice expired (November 27, 1995). Prior to the tenant of record's death in October, 1995, he had paid all rent owed through October 31, 1995. Subsequently, on October 27, 1995, the deceased's son tendered two money orders equaling the monthly rent. Furthermore, on December 5, 1995, the respondent sent the landlord a personal check in the amount of the monthly rent. On both occasions the landlord accepted the tenders. The Court granted respondent's motion to dismiss the termination notice. Although the money orders did not indicate the time period that their payment was intended to cover, the Court looked to the fact that respondent's father was fully current in rent payments at the time of his death and concluded that "it is obvious they were full payment of rent for the month of November, 1995". There can be no termination notice if the landlord accepts rent for any period of time after the termination notice becomes effective. For this reason the court dismissed the petition on grounds of waiver. (The court noted that it was not deciding the issue of whether the landlord's acceptance of rent from the son constituted a waiver issue so as to grant the son succession rights to the apartment. These are two distinct type of waiver issues.)

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Case Caption:

U.E.S.S. Leasing Corp. v. Santiago

Issues/Legal Principles:

Court awarded landlord possession of the premises because prime tenant's abandonment of their children contributed to the acts of nuisance complained of by the landlord.

Keywords:

nuisance

Court:

Civil Court, Queens County

Judge:

Hon. Sheila Franke

Date:

December 30, 1996

Citation:

NYLJ, page 25, col. 5

Referred Statutes:

none cited

Summary:

Landlord commenced a holdover proceeding against the tenants of a rent stabilized apartment on grounds of nuisance. The landlord claimed that the prime tenant's son engaged in two instances of misconduct: he urinated over the side of the terrace, directly above the downstairs neighbor's terrace and he threw cigar fillings and ashes over the side of the terrace which landed on their neighbor's terrace below during a party, falling on the guest's plates. The prime tenants moved out of the subject premises two and a half years ago, leaving behind their daughter, aged nineteen or twenty, and their son, aged fifteen or sixteen who already had a criminal record. By the time of the litigation, the son had moved out and the daughter along with her two infant children remained the sole occupants. The Court awarded the landlord a judgment of possession but stayed the execution of the warrant to October 31, 1997. The Court further held that the landlord may move to accelerate the execution of the warrant if future incidents of nuisance arise, and the landlord can prove same. In reaching its determination, the Court felt it was "significant to note the irresponsibility of the prime tenants". The Court equated their conduct with abandonment of their children, especially in light of their son's history of illegal behavior.

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Case Caption:

51 Spring St. Limited Partnership v. Lobro Associates

Issues/Legal Principles:

Foreclosure proceeding must notify new owners of tenant's overcharge award.

Keywords:

overcharge; foreclosure; good faith purchaser

Court:

Supreme Court, New York County

Judge:

Hon. Gangel-Jacob

Date:

December 30, 1996

Citation:

NYLJ, page 21, col. 5

Referred Statutes:

FILL IN

Summary:

Plaintiff acquired by assignment a prior bank's lien interest in the building owned by the defendant, Lobro Associates, who had defaulted on the mortgage. Plaintiff moved for summary judgment in lieu of a complaint for a judgment of foreclosure. The rent stabilized tenant opposed the motion because plaintiff had taken the position that a DHCR overcharge order in tenant's favor was not binding on plaintiff, that plaintiff's mortgage lien foreclosed the tenant's subsequent judgment and therefore the tenant had no right to offset the amount of the DHCR order against rent the tenant owed to plaintiff. Plaintiff argued that the tenant was required to go after Lobro to collect the overcharges. The Court disagreed and held that plaintiff was required to notify any prospective purchasers of the existence of the DHCR order as well as the amount of the judgment and the prospective liability for the overcharge. The Court further held that any judgment of foreclosure entered in the main action must include a provision for the preservation of the DHCR order in the amount due to the tenant. The Court also ordered that any monies owed to the tenant be placed in escrow pending further order of the Court.

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Case Caption:

Joseph Conforti v. Indu Goradia

Issues/Legal Principles:

Tenant's affidavit that terrace was part of premises from the time tenant took possession years ago constituted sufficient evidence for summary judgment motion.

Keywords:

leasehold

Court:

Appellate Division, First Department

Judge:

lower court: Hon. Beverly Cohen

Date:

January 3, 1997

Citation:

NYLJ, page 27, col. 1

Referred Statutes:

CPLR 3001; CPLR 2701[2]

Summary:

Plaintiff was granted a declaration that he was the rent stabilized tenant of record, that he was entitled to a renewal lease and that his penthouse apartment included a terrace. The defendant landlord appealed on grounds that in the absence of any documentary evidence that the terrace was part of the leased space, summary judgment was inappropriate. The Appellate Division, however, affirmed, holding that the plaintiff-tenant's affidavit constituted evidence. The affidavit set forth that he had been a tenant since 1974 and that the apartment consisted of a large terrace whose boundary was defined as the roof covered by a wooden deck, and that this was in existence prior to when he moved in. The Appellate Division dismissed landlord's argument that lack of a building permit indicates lack of permission to erect the wooden deck. The Court held: "To the contrary, the existence of the structure for so long a period of time gives rise to a presumption that prior owners of the building acquiesced in its use by the tenant as part of the leasehold." The Court noted that the landlord failed to come forward with any proof to the contrary, and the lower court was justified in holding that the terrace was included as a part of the premises. The Court remanded to the Civil Court for a determination of the legal issue of whether the roof deck is in compliance with governing law and regulations, rejecting the tenant's argument that Civil Court did not have jurisdiction to determine this remaining issue. The Court also directed the tenant to deposit all outstanding rent with the court.