Housing Court Decisions December 1998

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Case Caption:

Barclay v. Natoli

Issues/Legal Principles:

Occupant in possession greater than 30 days denied restoration to possession on grounds he was mere licensee.

Keywords:

unlawful eviction; licensee

Court:

Appellate Term, 2nd & 11th Judicial District

Judge:

lower court: Hon. Carl Callender

Date:

December 30, 1998

Citation:

NYLJ, page 24, col 1

Referred Statutes:

RPAPL 713; Administrative Code 26-521, 523, 524, 528

Summary:

The "tenant" brought an order to show cause on grounds that he had been unlawfully evicted from the church premises where he was residing. He claimed that the "landlord" used threats of force and arrest to induce him to vacate. The lower court restored the tenant to possession on grounds that he had occupied the premises for greater than 30 consecutive days and since the landlord did not obtain a court order to evict the tenant, the eviction was unlawful. The Appellate Term reversed, noting that the trial testimony indicated that "tenant" was really a mere licensee. Therefore, he was not entitled to seek restoration to the premises pursuant to RPAPL 713 which requires that the party be in possession of the premises and have acquired a possessory interest in the premises. The court noted that the "thirty-day rule" under the Administrative Code does not change the occupant's status as licensee because it merely authorizes the City to subject the violator (i.e., a landlord) to criminal liability and civil penalties which are paid into the general fund of the city.

Notes:

This is an awful decision. Under RPAPL 713(10) to commence a petition for restoration to the premises, the statute requires that the petitioner (i.e., the evicted occupant) "was peaceably in actual possession at the time of the forcible or unlawful entry or in constructive possession at the time of the forcible or unlawful detainer." There is nothing in the statute that distinguishes between a tenant and a licensee. A licensee is someone who was granted permission to reside in the premises, like a roommate, but is not the actual tenant. A fair reading of the statute would allow even a licensee to maintain an unlawful eviction proceeding if they were forced out absent a court order. The Administrative Code pertains to fines and penalties against the violator, yet it has been relied upon for the thirty day rule. Statutes are meant to be read "in pari materia," which means that a harmonious reading is generally given to different statutes covering the same topic. In this regard, the thirty day rule has been applied in unlawful eviction cases. This Appellate Term decision gives landlords (or even prime tenants with roommates) a green light to throw out licensees at their whim. It's a Wild West decision which does not bode well for due process in the area of housing.

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Case Caption:

Fernandez v. Chapman

Issues/Legal Principles:

Tenant cannot recoup rent already paid even though landlord lacks a proper certificate of occupancy.

Keywords:

certificate of occupancy

Court:

Court of Mount Vernon, Westchester County

Judge:

Hon. Seiden

Date:

December 30, 1998

Citation:

NYLJ, page 27, col 4

Referred Statutes:

Multiple Dwelling Law 301 & 302

Summary:

Former tenant brought a small claims action to recover her security deposit and six months of rent previously paid. She resided in the basement while the owner's family lived upstairs. She had since moved out. The building was classified as only a one family residence in the certificate of occupancy. In such cases, a landlord is not entitled to collect rent in the absence of a certificate of occupancy that lists the leased space as residential. The court dismissed the tenant's complaint because even though the certificate of occupancy does not permit the collection of rent, a tenant cannot recoup rent already paid based on a faulty certificate of occupancy. The court also noted that the purpose of the multiple dwelling law is to protect tenants from unsafe living conditions and not a sword to unjustly enrich tenants by giving them free rent.

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Case Caption:

Gemini Realty v. Yeiser

Issues/Legal Principles:

Attorney who notarized affidavit not signed by agent is sanctioned $1,000.

Keywords:

sanctions; notaries

Court:

Civil Housing Court, Kings County

Judge:

Hon. C. Callender

Date:

December 30, 1998

Citation:

NYLJ, page 24, col 6

Referred Statutes:

26 NYCCR 130.1.1

Summary:

Landlord made a motion in this nonpayment proceeding seeking a final judgment against the tenant. The affirmation of the attorney stated that his client advised him that all the necessary repairs were completed as required under the parties' stipulation of settlement. Accompanying the motion was an affidavit from the managing agent reiterating the attorney's statement that repairs were completed. The agent's affidavit was notarized by the attorney. At a hearing on the motion, the agent claimed that the tenant denied access to do the repairs. The judge handed the agent the affidavit and the agent denied ever seeing it, that its contents were not true and that the signature was not his. The attorney admitted that his office often allowed affidavits to be notarized without the signing party present. The court sanctioned the attorney $1,000.00.

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Case Caption:

1895 Grand Concourse Associates v. Ramos

Issues/Legal Principles:

Tenant's husband's personal consumption of cocaine, absent proof of selling, does not constitute grounds for eviction.

Keywords:

illegal usage

Court:

Civil Housing Court, Bronx County

Judge:

Hon. Anthony Fiorella

Date:

December 30, 1998

Citation:

NYLJ, page 23, col 1

Referred Statutes:

RPAPL 711(5) & 231(1)

Summary:

Landlord brought a holdover petition against the tenant on grounds that she allowed or acquiesced in allowing her husband to traffic in drugs. On two occasions police officers arrested people in the apartment, including the tenant and her husband. On both occasions less than $60 worth of cocaine was confiscated, and various drug paraphernalia. The husband pled guilty to a misdemeanor while the charges against the others were dropped. At trial the police officer testified that to his knowledge no drugs were sold in the apartment, nor did the husband sell drugs outside the apartment. The managing agent testified that he has known the tenant and her husband for 8 years and has never received any complaint about them. In the judge's opinion, the husband testified credibly that he consumed cocaine only for personal use. He also testified that he was in a drug treatment program and had resided in the premises for 25 years. He had never been arrested before these 1997 incidents. All charges against the wife were dismissed. She testified that she didn't know of the existence of drugs in the apartment until the arrest because she did not have a key to the closet where the cocaine was kept by her husband. The court concluded that the evidence showed no proof of any sale of drugs in the premises or its environs. Mere personal usage is not sufficient for a landlord to be awarded a judgment based on illegal usage of the apartment. Further, the court concluded that the landlord likewise failed to present evident that the wife knew about her husband's possession of drugs in the apartment. The court dismissed the petition with prejudice.

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Case Caption:

St. James LLC v. Leisenring

Issues/Legal Principles:

Tenant allowed to deduct overcharge award from rent arrears owed under a stipulation.

Keywords:

overcharges; rent arrears; stipulations

Court:

Civil Housing Court, Kings County

Judge:

Hon. R. Birnbaum

Date:

December 30, 1998

Citation:

NYLJ, page 25, col 1

Referred Statutes:

RSC 2526.1

Summary:

Tenant won an overcharge complaint at the DHCR against landlord. Landlord filed an administrative appeal known as a PAR. The tenant had not paid rent in 14 months and landlord commenced a nonpayment proceeding. The parties agreed in a stipulation to set the rent at $427.31 pending landlord's PAR appeal at the DHCR, and tenant agreed to pay 7 months rent by September 25, 1998 (about $3,000) and to begin paying monthly rent thereafter. On October 16, 1998, the DHCR rendered a decision and denied landlord's PAR. The tenant then moved by order to show cause asking that the arrears in the stipulation (not yet paid) be off-set against the overcharge award which exceeded the arrears. The landlord argued that it wanted the arrears paid and that tenant should only be able to deduct the overcharge award from future rent. The court disagreed, citing a plethora of cases, that it would be unjust to evict the tenant (for nonpayment of the arrears) when the landlord owes her money. Further, the statute pertaining to the collection of overcharges (which allows tenants to deduct the overcharges from the rent) does not differentiate between past and future rent.

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Case Caption:

240 West 73rd Street v. Vichitlakakran

Issues/Legal Principles:

Hotel resident who pays rent in his name for 8 years is deemed stabilized tenant of unit once occupied by his cousin, the original tenant.

Keywords:

hotel tenants; waiver; nonprimary residency

Court:

Civil Court, New York County

Judge:

Hon. Kornreich

Date:

December 30, 1998

Citation:

NYLJ, page 22, col 3

Referred Statutes:

RSC 2520.6(j)

Summary:

Landlord brought a holdover proceeding against tenant and his cousin on grounds of nonprimary residency. The premises are located in a hotel. The cousin's affidavit stated that the tenant moved out of the room 8 years ago and that he alone paid rent for the past 8 years in his own name. He further stated that he tendered the rent directly to the attendants behind the front desk. The landlord argued that the rent checks were deposited in a lock box and that the attendants had no authority to tender leases, thus the cousin's waiver argument must fail. The court noted that this is a hotel, not an apartment building, and in hotel cases a lease is not needed to become a tenant. The only requisite for attaining stabilization status in a hotel is occupancy for six consecutive months. The court also held that it didn't matter whether the tenancy was linked to any particular room. The court held that the cousin's payment of rent in his name and tendered to the front desk personnel for over six months (here, 8 years) made the cousin the rent stabilized tenant of the unit.

Case Caption:

86 Realty, LLC v. Lang

Issues/Legal Principles:

Tenant's primary residence is New York City apartment notwithstanding tenant's rental of an apartment in Los Angeles.

Keywords:

nonprimary residency

Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Marian C. Doherty

Date:

December 23, 1998

Citation:

NYLJ, page 24, col 3

Referred Statutes:

(none cited)

Summary:

The appellate court upheld the trial court's determination that tenant's primary residence is the rent-controlled apartment where she has been living for 35 years. The apartment was listed as tenant's address on her New York State and New York City tax returns, voter registration records and passport; most of tenant's personal possessions were kept in the apartment; and tenant maintained New York City bank accounts. Although tenant rented a sparsely-furnished apartment in Los Angeles for temporary employment and health reasons, the trial court found that the Los Angeles apartment was not the tenant's primary residence and the appellate court upheld this finding.

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Case Caption:

Ansonia Tenant's Coalition, Inc. v. Ansonia Surveillance Agents

Issues/Legal Principles:

Harassment claims must be filed with the DHCR; Tenants claiming landlord interference with their organizing efforts must cite specific instances of such conduct.

Keywords:

tenant organizing; harassment

Court:

Supreme Court, New York County

Judge:

Hon. Justice L. Miller

Date:

December 23, 1998

Citation:

NYLJ, page 24, col 5

Referred Statutes:

CPLR Sections 3211, 3212, 3103(c), 321(b)(2); RPL Section 230; RSC Section 2525.5

Summary:

Plaintiff (the tenants' association) brought an action against landlord (sponsor of the condo plan) and others accusing them of harassment and interference with the tenants' efforts to organize, among other things. The tenants' complaint is based on the fact that the sponsor of the condo plan and/or the condominium association is employing security guards to follow Soja (an occupant of the building) wherever he goes in the building. Landlord claims that the hiring of a security guard was necessary because Soja was seen tampering with asbestos inside an off-limits asbestos abatement area in the building and Soja has planted asbestos in the building and reported it to the EPA in order to get the landlord into trouble. The tenant group maintains that the landlord has conducted its asbestos abatement project in a dangerous manner and that Soja discovered this through his vigilance. The plaintiffs claim that the security guards are preventing the tenants from organizing, in contravention of RPL Section 230. However, the plaintiffs' complaint failed to state with any specificity how the activity of the security guards has threatened or impeded the tenants' ability to organize or communicate with each other. The Court therefore granted the landlord's request to dismiss this claim. The plaintiffs also claimed that the activity of the security guards constitutes harassment which is prohibited by RSC Section 2525.5. The Court also dismissed this claim, upon the landlord's request, because the RSC Code provides that harassment claims must be heard by the DHCR.

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Case Caption:

South Parks Estates Co. v. Serocki

Issues/Legal Principles:

Under the circumstances of this case, acceptance of pre-petition rent after service of the predicate notice does not mandate dismissal of landlord's eviction case.

Keywords:

predicate notice; use and occupancy; rent

Court:

Civil Court, Housing Part, New York County

Judge:

Hon. Judge Hoffman

Date:

December 23, 1998

Citation:

NYLJ, page 26, col 2

Referred Statutes:

RPAPL Section 711(1); CPLR Section 3211(b); RSC Section 2524

Summary:

Landlord commenced an illegal sublet holdover proceeding against tenant. For the next eight months, tenant paid use and occupancy to landlord in an amount equal to the monthly rent. Five to four months before tenant's lease was up, landlord sent tenant a notice which stated (1) that tenant's lease would not be renewed because the subject rent-stabilized apartment was not tenant's primary residence and (2) that landlord intended to commence an action or proceeding on nonprimary residence grounds. This notice stated that tenant's lease would terminate on April 30, 1998. Landlord accepted tenant's payment for the month of May 1998. Landlord then served tenant with a notice of petition and petition alleging non-primary residence. Tenant then asked the Court for summary judgment against the landlord, arguing that the landlord's acceptance of May 1998 rent vitiated (contradicted) the landlord's predicate notice which stated that the lease was terminated effective April 30, 1998 on the grounds of nonprimary residence. The Court refused to grant summary judgment to tenant. Although there are many cases which say that the landlord's acceptance of rent after service of a predicate notice and prior to service of the petition and notice of petition requires dismissal of the landlord's case, the Court found that this case was different, because the May 1998 payment could simply be a use and occupancy payment made during the pendency of the illegal sublet proceeding. Although the parties had never entered into a formal stipulation that use and occupancy should be paid while the illegal sublet case was pending, it appears that this was the parties' intent, based on the fact that tenant attempted to pay rent after tenant was served with the predicate notice in the illegal sublet case, but landlord sent the payment back with a letter explaining that landlord would accept use and occupancy payments only after the illegal sublet case was in Court. Tenant's eight consecutive payments (including May 1998)appear to have been made in compliance with this proposed arrangement. Although the Court refused to grant summary judgment for tenant, the Court found that there were issues of fact regarding the interpretation of the May 1998 payment. Was the May 1998 payment a use and occupancy payment in accordance with the parties' understanding after the illegal sublet proceeding commenced? Or did the landlord's acceptance of the May 1998 payment lead tenant to become reasonably confused about the landlord's intentions? In effect, the Court determined that the parties may testify about these facts at trial and the Court would make a determination after trial.

Notes:

Compare this case with Sunstone Associates LLC v. Heggings, which is also included in this week's summaries.

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Case Caption:

Sunstone Associates LLC v. Heggings

Issues/Legal Principles:

Landlord's acceptance of pre-petition rent after service of the predicate notice requires dismissal of the eviction case against tenant.

Keywords:

predicate notice; use and occupancy; rent

Court:

Civil Court, Housing Part, New York County

Judge:

Hon. Malatsky

Date:

December 23, 1998

Citation:

NYLJ, page 26, col 5

Referred Statutes:

(none cited)

Summary:

Landlord mailed a termination notice to tenant on August 3rd which stated that the lease was terminated effective August 15th. On August 6th, the landlord cashed tenant's rent check for the month of August 1998. On August 21st, landlord served tenant with a notice of petition and petition. The Court granted the tenant's motion to dismiss the holdover case, because the termination notice was vitiated (contradicted) by the landlord's acceptance of rent to cover a period (August 16th through 31st, 1998) after the termination date (August 15th) set forth in the notice.

Notes:

Compare this case with South Parks Estates Co. v. Serocki, which is also included in this week's summaries.

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Case Caption:

Licari v. Van Pier

Issues/Legal Principles:

Landlord can bring summary holdover proceeding against shareholder/proprietary lessee after purchasing stock and lease to co-operative apartment at a sheriff's sale.

Keywords:

foreclosure; auctioneer's sale

Court:

Civil Court, Housing Part, New York County

Judge:

Hon. Smith

Date:

December 23, 1998

Citation:

NYLJ, page 26, col 5

Referred Statutes:

RPAPL Section 713(1) and (5); CPLR Section 3212; RPL Sections 220 and 745; UCC Section 9-504

Summary:

The shareholder/proprietary lessee of a cooperative apartment apparently defaulted (by failing to make mortgage payments or for some other unspecified reason) which led to the sale of the shares and the leasehold rights at an auctioneer's sale to plaintiff Licari (hereinafter "landlord"). Landlord then sued to evict tenant pursuant to RPAPL Section 713(5), which allows landlord to bring a summary proceeding against a tenant when "the property has been sold in foreclosure and either the deed delivered pursuant to such sale, or a copy of such deed, certified as provided in the civil practice law and rules, has been exhibited to him." The tenant asked the Court to dismiss the holdover proceeding, arguing that RPAPL Section 713(5) permits landlords to bring a summary holdover proceeding to recover real property (e.g. a house) but not personal property (e.g. the shares and lease to a cooperative apartment). Referring the case of Matter of Carmer (Court of Appeals 1988), the Court noted that either personal property law or real property law may be applied to cooperative apartments and that Courts should decide, on a case-by-case basis, what law should apply. In this case, the Court decided that it was proper to apply real property law, ruled that the landlord properly relied on RPAPL Section 713(5) (which is part of NYS real property law), and denied the tenant's motion to dismiss the eviction proceeding. Although the landlord obviously did not exhibit a certified copy of a deed to tenant prior to commencing the summary proceeding, the landlord exhibited a certified copy of the Affidavit of Fact (Certificate of Sale), and the Court, in effect, found that this satisfied the requirements of RPAPL Section 713(5).

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Case Caption:

Willough/Wyck House Assoc. LP v. Biggs

Issues/Legal Principles:

Rent demand which includes landlord's stamp but not its signature is proper; landlord properly fulfilled Section 8 notification requirements by representations made in rent demand, notice of petition and petition.

Keywords:

rent demand; Section 8 tenant; RRRA of 1997; rent overcharge

Court:

Civil Court, Housing Part, Kings County

Judge:

Hon. Simkowitz

Date:

December 23, 1998

Citation:

NYLJ, page 28, col 3

Referred Statutes:

RPAPL Section 711(2); RRRA of 1997; CPLR Section 213-a; RSC Section 26-516; General Construction Law Section 46

Summary:

Landlord brought a nonpayment proceeding against a Section 8 tenant, and tenant asked the Court to dismiss the proceeding for three reasons: (1) the rent demand was defective because it did not include petitioner's signature (only petitioner's stamp); (2) landlord did not properly notify the Housing Authority that it was about to commence a proceeding against a Section 8 tenant; (3) landlord's failure to register the apartment's rent prior to 1991 constituted a rent overcharge. The Court rejected all three arguments and denied tenant's motion to dismiss the proceeding. The General Construction Law defines a signature broadly - a stamped signature is acceptable. Landlord did properly inform the Housing Authority about its intention to commence the proceeding. It was not necessary for landlord to attach a copy of the notice given to the Housing Authority and proof of service of same to the petition. The landlord fulfilled its obligations pursuant to the Williams Consent Decree by including the following statement in the three-day rent demand, notice of petition and petition: "NYCHA Section 8 and Ten. were given notice of proceeding, NYCHA has failed to respond to certification within 35 days of mailing. Subsidy portion not sought." Finally, since landlord properly registered the premises for the last four years, tenant is precluded from claiming rent overcharge, because the RRRA of 1997 (particularly CPLR Section 213-a) precludes examination of any rent history prior to the four year period immediately preceding the commencement of the action.

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Case Caption:

3410 Kingsbridge Partners v. Atkinson

Issues/Legal Principles:

Tenant who was overcharged by prior landlord may treat the amount of the overcharge as a rent credit and withhold rent from current landlord.

Keywords:

fair market rent appeal; rent overcharge; nonpayment proceedings

Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Brenda S. Spears

Date:

December 24, 1998

Citation:

NYLJ, page 30, col 1

Referred Statutes:

RSC Sections 2526.1(e) and 2522.3(d)

Summary:

Landlord sued tenant for nonpayment of rent and obtained a final judgment of possession; the appellate term reversed (2-1) and dismissed the final judgment of possession. The tenant was entitled to withhold the rent arrears sought in current landlord's nonpayment petition. The DHCR (in a fair market rent appeal) determined that tenant had been overcharged by prior landlord. Neither prior landlord nor current landlord refunded the overcharge to tenant. In accordance with the RSC, tenant was therefore entitled to treat the amount of the overcharge as a rent credit against current rent. The majority of the Court made this determination in favor of the tenant notwithstanding the fact that the tenant, who was not represented by an attorney, made the mistake of entering a judgment for the excess rent against the former owner in the Bronx Supreme Court. Landlord argued that this should preclude tenant from withholding rent from the current tenant, but the Court rejected this argument. The Court noted that the judgment against the prior landlord had never been satisfied by anyone and, furthermore, the tenant was seeking to withdraw the judgment against the former landlord.

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Case Caption:

101 W. 70th Street Associates v. DeSoiza

Issues/Legal Principles:

Landlord is barred from collecting or demanding rent in excess of the last legal regulated rent.

Keywords:

fair market rent appeals; nonpayment proceedings; rent registration rules

Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Marilyn Shafer

Date:

December 24, 1998

Citation:

NYLJ, page 30, col 2

Referred Statutes:

RSC Section 26-504.2 (as amended by NYC Local Law 1994, No. 4) and RSC Section 26-517(e)

Summary:

Landlord brought a nonpayment proceeding against tenant, the trial court dismissed the nonpayment proceeding and the appellate court affirmed. Landlord sought to collect $2,200.00 per month from tenant in the nonpayment proceeding. However, landlord never registered this rent with the DHCR. Therefore, in accordance with RSC Section 26-517(e), the landlord was barred from collecting or demanding any rent in excess of the last legal regulated rent, in this case, $112.58 (the previous rent-controlled rent). Landlord's late registration of the rent at $2,200.00 per month would ordinarily permit landlord to collect this amount prospectively. However, under the circumstances of this case, the initial legal regulated rent (the first rent stabilized rent) will be set by the DHCR in the context of a pending fair market rent appeal which was filed by the tenant.

Case Caption:

East Eleventh Street Associates v. Breslow

Issues/Legal Principles:

Attorney's fees clause in renewal lease is not given validity as the provision is not on the same terms and conditions as the expired lease.

Keywords:

attorney's fees; renewal leases

Court:

Appellate Division, First Department

Judge:

lower court: Hon. Howard Malatzky

Date:

December 14, 1998

Citation:

NYLJ, page 27, col 1

Referred Statutes:

RSC 2522.5(g) & 2520.13; RPL 234

Summary:

In a nonpayment proceeding the court denied landlord's motion for attorney's fees. The Appellate Term upheld the denial. Now the Appellate Division likewise affirms on grounds that the attorney fee provision in the renewal lease runs afoul of the requirement that renewal leases be "on the same terms and conditions" as the expired lease. The case does not recite the precise language of the renewal lease's attorney's fees provision, but apparently the provision allowed tenant to recover attorney's fees (in circumstances not known) because the Court noted that the renewal lease's provision could "potentially could have benefitted the tenant." In assuming that the Rent Stabilization Code permits a tenant to waive the attorney's fees provision, the Court held that "such a waiver may not be inferred from the tenant's mere silence after receiving the renewal lease."

Notes:

Most Rent Stabilized leases contain a provision granting attorney's fees to the landlord in the event the tenant defaults. Real Property Law 234 provides that if such a clause exists in a lease granting attorney's fees to a landlord where the landlord prevails, then if it is the tenant who prevails, the tenant should likewise be awarded fees even though the lease does not provide so. Reading into the case, it seems that this renewal lease contained a provision granting the tenant attorney's fees if he or she is taken to court and wins. Apparently the landlord was the prevailing party in the nonpayment proceeding and sought attorney's fees in reliance on the provision in the renewal lease by applying a reverse concept of Real Property Law 234. The landlord's theory was roundly rejected on grounds that the renewal lease's attorney's fees clause seemingly in favor of the tenant was impermissible because Rent Stabilized leases must be renewed on the same terms and conditions as the expiring lease.

This decision is a mixed blessing. On the one hand, it confirms that in subsequent leases landlords cannot take away rights that the initial lease provided. Yet, why can't landlords agree to provide tenants greater rights than the initial lease provided (as this renewal lease seemed to do with the attorneys fees provision)? The Appellate Division did not comment on landlord's effort to reverse the intent of RPL 234. Perhaps this was the craw that really induced the Court to reject landlord's position, since RPL 234 was designed to benefit tenants only, not landlords. Yet, the Court did not directly address this issue.

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Case Caption:

Ferrante v. 55 Spring Street Associates

Issues/Legal Principles:

Four year limit on rent overcharge claims ruled not applicable where 1995 DHCR order directed recalculation of rent since 1987 and landlord never complied with the order.

Keywords:

overcharges

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Debra James

Date:

December 15, 1998

Citation:

NYLJ, page 25, col 1

Referred Statutes:

Rent Regulation Reform Act of 1997, Sections 34 & 46(1)

Summary:

Plaintiff-Tenant sued landlord in Civil Court for overcharges for the period August, 1995 through April, 1996. The tenant based her claim on a 1995 DHCR order which determined the fair market rent appeal of a prior tenant (who was timely served the RR1 form notice). The 1995 DHCR order adjusted the initial legal regulated rent in effect in June, 1987 and directed that the rent and all future renewal/vacancy increases be recomputed for the tenant who filed the fair market rent appeal and for all successor tenants, which would include the Plaintiff in this case. The lower court dismissed landlord's motion which argued that the new rent law of 1997 (RRRA) precluded examination of an apartment's rental history "prior to the four-year period immediately preceding the commencement of the action." In this case, the Plaintiff sued in or about 1997. Landlord presumably argued that the court could only examine the rental history from 1993 onward because the 1995 order addressed rents dating back to 1987 which exceeds the four year period. Apparently, the landlord never made the rental and lease adjustments required by the 1995 DHCR order. (Had it done so, Plaintiff would not have brought a lawsuit.)

The Appellate Term agreed with the landlord's position that the RRRA is applicable, even though the statute was not enacted until after Judge James had already rendered her decision. This is because the statute applies to "any action or proceeding pending in any court." The Appellate Term, however, rejected landlord's argument that it was immune to Plaintiff's overcharge claims because they were based on a 1987 rent date which is greater than four years. The Court held that the DHCR order, which apparently was never appealed, cannot be attacked in a nonpayment proceeding because it's not the proper forum. The Court also held that the DHCR order mandated a recalculation of the rent, and once these recalculations were made, Plaintiff's overcharge complaint does not extend beyond the four year period. The Court held: "The amount of rent set forth in the annual registration statements for the years 1998 through 1994 must be deemed to have been effectively `challenged' by virtue of the pre-existing fair market rent appeal commenced in 1988."

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Case Caption:

2114 Realty LLC v. Carrington

Issues/Legal Principles:

Petition that fails to state the tenant receives Section 8 subsidies must be dismissed as the omission is not an amendable defect.

Keywords:

Section 8; stipulations

Court:

Civil Housing Court, Kings County

Judge:

Hon. D. Thomas

Date:

December 16, 1998

Citation:

NYLJ, page 24, col 4

Referred Statutes:

RPAPL 753(4)

Summary:

In this holdover proceeding based on violation of the lease pro se tenant entered into a stipulation to pay the rent. The stipulation granted the landlord a judgment of possession and a warrant of eviction whose execution was stayed for six months. Landlord waived all rent owed through the vacate date in consideration for the tenant's giving up the apartment. Tenant retained counsel and now asks the court to set aside the stipulation on grounds that the petition failed to state that the tenant receives Section 8 benefits. The landlord's attorney argued that the omission is de minimus and asked to amend the petition so that it would now include a Section 8 statement. The Court held that the prevailing case law requires the dismissal of the petition because the Section 8 omission is not an amendable defect.

The Court further held that even if the defect was amendable, the petition must still be dismissed due to the representations set forth in the stipulation. Tenant's rent is $708.00 per month. However, Section 8 is responsible for $682.00 per month tenant, while the tenant's portion is only $26.00 per month. Although the landlord was not obligated to give tenant any rent waiver, at the same time, the tenant was not obligated to waive her right to a trial and her right to cure whatever the lease violation consisted of. The Court explained that when stipulations are presented to the court to ascertain if pro se tenants understand and assent to the agreement's terms, the court must understand the nature of the stipulation. In this stipulation there was no indication that the consideration given tenant was far less in monetary value than indicated on the face of the stipulation. The Court held that it had no way of knowing whether the tenant would have assented to the terms of the stipulation "had the Court been put on notice from the petition that respondent was a Section 8 tenant and explained to respondent that petitioner was only waiving $26 per month rather than $708.00 per month."

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Case Caption:

Tan Holding Corp. v. Wallace

Issues/Legal Principles:

Landlord cannot evict tenants where building satisfies the criteria for rent stabilization status.

Keywords:

stabilization status; Loft Law

Court:

Civil Housing Court, New York County

Judge:

Hon. Douglas Hoffman

Date:

December 16, 1998

Citation:

NYLJ, page 22, col 4

Referred Statutes:

29 RCNY 2-01(m) & 1-06.1(a);

Summary:

Landlord brought holdover proceedings against various tenants on grounds that the tenants are not protected under any of the rent laws. The building is a loft located in a commercially zoned area for light manufacture. The certificate of occupancy allows occupancy by about 75 people with office and storage use permitted. All the tenants signed commercial leases (since expired) none of which provided for residential usage. The landlord argued that because the building is a loft, the tenants should have filed for loft law coverage. However, the deadline to file for loft law coverage with the Loft Board elapsed as of June 4, 1994. The tenants gave a detailed history of the building, including the fact that six of the current tenants have occupied the building since 1981. They made massive renovations to the building and their apartments, including converting the building's elevator from a freight to a passenger elevator. Further, the net lessees of the building were aware of all work the tenants performed and knew they used the lofts for residential purposes. Additionally, the corporate landlord's officer was an agent for the building and worked for the net lessees in 1983 through the present, and thus this person cannot claim lack of knowledge of the tenants' residential use of the premises. The tenants argue that the Loft Law is incidental to the fact that the building contained at least six residential units since 1981 and was built prior to 1974, which together qualify the tenants to Rent Stabilization status.

The judge held that the courts have concurrent jurisdiction to determine whether tenants are protected under the Loft Laws. However, even if the Loft Law is not applicable, the Rent Stabilization Laws and the Emergency Tenant Protection Act do apply given the history of the tenants' residential occupancy and the owner's knowledge of same (which was not disputed by the owner). Although the ETPA applies only to residential units, the court held that "a landlord may not rent premises under a nominally commercial lease with knowledge that the tenants intend to convert the property to residential use, acquiesce in the conversion for 17 years, and seek to avoid protections afforded those tenants under the RSL and ETPA." The landlord tried to argue that substantial rehabilitation occurred and such renovated buildings are exempted from the stabilization laws. The Court readily dismissed this argument by pointing out that it was the tenants who invested their money into the rehabilitation and landlords cannot reap the benefits as well as try to evict the tenants. The Court dismissed the petitions against the tenants and held that the landlord would have to commence another proceeding to collect the rent.

Case Caption:

Isidore B. Simkowitz v. DHCR

Issues/Legal Principles:

Court affirms DHCR's decision denying landlord's MCI application because almost one-fifth of the improvements were substantially defective.

Keywords:

major capitol improvement rent increase (MCI)

Court:

Supreme Court, Appellate Division, First Department

Judge:

lower court judge: Hon. Louise Gruner Gans

Date:

December 7, 1998

Citation:

NYLJ, page 27, col 2

Referred Statutes:

RSC Section 2522.4[a][2][1][c]

Summary:

The DHCR rejected the sufficiency of landlord's application for building-wide rental increases based on Major Capital Improvements ("MCI"). The Supreme Court judge upheld the rejection as did the Appellate Division on two grounds. Firstly, improvements must benefit all tenants, and not just some of the tenants, otherwise an owner's MCI application won't be improved. Secondly, landlord installed new windows and entry doors. However, DHCR inspections revealed that the windows in at least 18 percent of the apartments had substantial defects, as did the entry and vestibule doors, and it appeared as if the defects were attributable to unworkmanlike installation, rather than wear and tear or vandalism.

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Case Caption:

Babayeva v. Sorkin

Issues/Legal Principles:

Appellate court reverses the judgment and send the case back to the trial court because the record is not clear.

Keywords:

new trial; security deposit

Court:

Appellate Term, Second Dept.

Judge:

lower court judge: Hon. L. Jacobson

Date:

December 7, 1998

Citation:

NYLJ, page 31, col 2

Referred Statutes:

none cited

Summary:

Case reproduced verbatim: Appeal by defendant from a small claims judgment of the Civil Court, Kings County (L. Jacobson, J.) entered October 30, 1997 in favor of plaintiff in the sum of $744.97 plus interest and disbursements. Judgment unanimously reversed without costs and matter remanded to the court below for a new trial. The record is unclear as to the amount of security deposited with defendant pursuant to the lease. In addition the testimony regarding the conditions which allegedly forced plaintiff to vacate the premises is confusing. In view of the foregoing the judgment should be reversed and a new trial ordered.

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Case Caption:

Crabtree v. DHCR

Issues/Legal Principles:

When deciding a rent overcharge application, the DHCR must consider rental events (e.g., the filing date of a DHCR rent registration statement, the issuance date of an order finding rent overcharge) which occurred within four years prior to the filing date of the overcharge application.

Keywords:

rent overcharge

Court:

Supreme Court, New York County

Judge:

Hon. Justice Lippman

Date:

December 9, 1998

Citation:

NYLJ, page 26, col 1

Referred Statutes:

RRRA of 1997; RSC Section 2529.7; RSL Section 516(a); CPLR Article 78

Summary:

Crabtree, the rent-stabilized tenant of Apt. 2W, filed an overcharge complaint with the DHCR on November 29, 1996. The DHCR's rent administrator found an overcharge, the landlord filed a Petition for Administrative Review ("PAR") which resulted in overturning the overcharge determination. Crabtree then filed an Article 78 proceeding with the Supreme Court seeking to overturn the PAR determination and reinstate the decision of the rent administrator. The Supreme Court agreed and granted tenant the relief requested. This court decision interprets the Rent Regulation Reform Act of 1997. It provides that (1) no determination of an overcharge and no award or calculation of an award of the amount of any overcharge may be based upon an overcharge having occurred more than four years before the complaint is filed; (2) courts are precluded from examining the rental history of a housing accommodation prior to the four-year period immediately preceding the filing of the complaint; and (3) a registered rent not challenged within four years of its filing is no longer subject to challenge. . DHCR annual apartment registration statements are deemed effective as of April 1st of each year. Since Crabtree's overcharge application was filed on November 29, 1996, the DHCR's Commissioner determined the PAR application by looking at the 1992 rent registration statement (four registration statements prior to the filing date). The 1992 registration indicated that the monthly rent was $1,050.00. The PAR Commissioner calculated lawful increases over $1,050.00 and determined that that Crabtree had not been overcharged. The Commissioner looked at the effective date of the 1992 registration (April 1, 1992) rather than the date it was actually filed (January 1993) and determined that the tenant could not challenge the 1992 registration. The Court found that the tenant may challenge any registration statement filed four years prior to the filing of the overcharge complaint. In other words, the Court focused on the filing date of the annual registration statement - not its effective date. In other words if a landlord files a registration statement belatedly, this Court has said that the filing date controls. Therefore, Crabtree could challenge the legality of the rent set forth in registration statements for the years 1986 through 1993, because the landlord did not file these registration statements until January 1993. The legal rent of Apt. 2W was challenged by prior tenants, resulting in DHCR and Supreme Court overcharge Orders which were made within the four-year period preceding the filing of Crabtree's complaint. The DHCR's 1995 overcharge order regarding prior tenant Katz (1) established that the legal rent should be calculated based upon an initial legal regulated rent of $391.35 per month rather than the $775.00 per month registered by the landlord and (2) directed the owner "to adjust subsequent rents to an amount no greater than that determined by this order plus any lawful increases." The Court noted that the rent rollback order indicates adherence to the basic tenet that "the initial base rent for a stabilized apartment is the originating point from which all subsequent rents are calculated." The DHCR's 1995 was upheld by subsequent court orders. The Commissioner found that these orders "cannot be considered rental events" because they "merely recount events that had previously occurred." The Court disagreed and found that these orders were indeed "rental events" which should be considered in deciding Crabtree's overcharge application. When DHCR's 1995 order regarding tenant Katz is considered, a determination of rent overcharge for tenant Crabtree follows. The Court therefore reinstated the DHCR's finding of rent overcharge for tenant Crabtree.

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Case Caption:

Schapiro v. Guerrini

Issues/Legal Principles:

Landlord forfeited his right to maintain a summary proceeding against tenant when he assigned his interest in the lease to a third party.

Keywords:

proper petitioner in a summary proceeding

Court:

Civil Court, Housing Part, New York County

Judge:

Hon. Malatzky

Date:

December 9, 1998

Citation:

NYLJ, page 27, col 4

Referred Statutes:

RPAPL Section 721

Summary:

After commencing a holdover proceeding against tenant, landlord ("assignor") assigned his rights to tenant's lease to another individual ("assignee") and assignee gave assignor a letter allowing him to continue the holdover proceeding against tenant. The tenant then made a motion to dismiss alleging that assignor was no longer the landlord, and therefore no longer the party who may maintain the proceeding. The Court agreed and dismissed the proceeding. The Court explained that the assignor "forfeited his standing as landlord" when he assigned the lease to assignee. Now, assignor is merely the agent of the assignee. RPAPL Section 721 specifically states that a summary proceeding (such as a holdover proceeding) may be brought by a landlord or a lessor. The law does not give an agent of the landlord the right to bring or maintain a summary proceeding.

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Case Caption:

J & Kris Corp. v. Munoz

Issues/Legal Principles:

Eviction proceeding against tenant is dismissed where landlord failed to prove that tenant allowed her adult son to use her rent stabilized apartment to sell drugs.

Keywords:

holdover; illegal purpose; illegal business

Court:

Civil Court, Bronx County, Housing Part

Judge:

Hon. Fiorella

Date:

December 9, 1998

Citation:

NYLJ, page 28, col 5

Referred Statutes:

RPAPL Section 711(5); RPL Section 231

Summary:

Landlord instituted a holdover proceeding against tenant alleging that she allowed her adult son to use her rent stabilized apartment for the sale of illegal drugs. The son was arrested on two occasions (six months apart) and charged with the criminal possession and sale of a small quantity of an illegal drug. The tenant credibly testified that she did not know that her son was involved in drugs. The apartment was searched after each arrest and no drugs were found. The Court refused to evict tenant, because the landlord failed to prove that the tenant knew or should have known that her son was involved in drugs. The Court also found that landlord failed to establish a pattern of illegal activity from the premises.

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Case Caption:

467 42nd Street v. Decker

Issues/Legal Principles:

Court orders landlord to restore evicted tenant to possession where warrant was executed after the rent had already been paid.

Keywords:

vacatur of warrant after execution

Court:

Civil Court, Kings County, Housing Part

Judge:

Hon. Callender

Date:

December 9, 1998

Citation:

NYLJ, page 30, col 2

Referred Statutes:

RPAPL Section 749(1) and (3); CPLR Section 5015(a) and (d)

Summary:

This nonpayment proceeding resulted in a Court Order granting landlord a money judgment for the rent owed and a warrant of eviction issued with a stay through July 31, 1998. After July 31st, the landlord was entitled to evict the tenant. However, in August 1998, landlord accepted the full amount of the money judgment from the Department of Social Services ("DSS")-- which is known as a "Jiggetts payment." Landlord and tenant also entered into a written agreement which stated, among other things, that the Jiggetts payment was made in full satisfaction of the judgment and satisfied all rent arrears and that direct vendor payments would be made to landlord on tenant's behalf by DSS commencing on September 1, 1998. Landlord accepted the September 1998 rent check from DSS. The tenant was evicted on October 15, 1998. The Court restored the tenant to possession of the apartment and required the landlord to return tenant's property to the apartment at landlord's cost. The landlord argued that when the parties entered into an agreement, the warrant was never officially vacated. Once the warrant issues, the landlord-tenant relationship is severed. The landlord's attorney offered various cases holding that a tenant may be evicted after the warrant issues even if the landlord accepted the full amount of the money judgment where the landlord never intended to vitiate the warrant. In these cases, the appellate term also ruled that the landlord is not obliged to tell the tenant that he intends to proceed with the eviction. However, the Court ruled that these cases were not dispositive. The Court cited another appellate term case for the proposition that a warrant may be vacated after its execution when good cause to vacate existed prior to the execution of the warrant. The Court found good cause in this tenant's case, where there was payment of an amount which exceeded the judgment; a written agreement was entered into stating that the amount paid satisfied the judgment and covered all arrears; and the landlord accepted one monthly payment from DSS.

Case Caption:

Capsa Realty Corp. v. Bracero & Ortiz

Issues/Legal Principles:

Son is granted succession rights to his mother's lease notwithstanding his presence in prison during the relevant two-year time period because incarceration is a statutory ground "interrupting" the time calculations.

Keywords:

succession rights; stipulations

Court:

Civil Housing Court, Queens County

Judge:

Hon. Greenbaum

Date:

December 2, 1998

Citation:

NYLJ, page 31, col 6

Referred Statutes:

RSC 2523.5(b)(1)(iii) & 2523.5(2)

Summary:

Landlord brought a holdover proceeding and in lieu of a trial the parties entered into a stipulation wherein Ortiz acknowledged the payment of certain rental arrears (use and occupancy) and agreed to pay same by a date certain. The issue before the court, however, involved paragraph 6 of the stipulation wherein the parties stipulated that the court would determine the legal issue of whether Ortiz's incarceration from October 1993 to October 1996 precluded his ability to obtain succession rights. Ortiz's mother, Bracero, was the tenant of record who vacated the apartment prior to the commencement of the proceeding. Before submitting briefs on this legal issue, the landlord brought a motion to set aside the stipulation because Ortiz failed to make the agreed upon rent payment. The court allowed Ortiz an extension of time to pay and directed the landlord's attorney to submit a legal brief on the succession rights issue in 30 days.

Landlord's attorney did not submit the brief, but instead brought another motion seeking a monetary judgment. The landlord's motion included documents showing that Ortiz was listed as a household member on the 1988 and 1990 rent stabilized renewal lease applications, but was no longer listed as residing in the apartment on the July 30, 1994 and July 1, 1996 renewal applications. These documents appeared to contradict Paragraph 5 of the stipulation wherein the parties agreed that Ortiz resided in the apartment continuously from his October 1996 prison release to the present time. Ortiz's attorney objected to this evidence because it was not before the court at the time the stipulation was entered into by the parties to brief the legal issue. Tenant's attorney stated that his client was incarcerated awaiting trial on July 30, 1994 and was in prison on July 1, 1996. The court rejected the landlord's request for a hearing on this issue because the landlord provided no explanation for why the forms filed by Bracero were not introduced at the time the stipulation was signed, and also because the failure to include Ortiz on such tenant forms did not automatically bar his succession rights claim, it was merely one factor for consideration.

In order to establish succession rights, Ortiz has to show that he resided with his mother as his primary residence for two years prior to her vacatur. However, the two-year period is interrupted where the person claiming succession rights is absent from the apartment due to a court order sentencing him or her to prison for reasons unrelated to the tenancy. The court determined that Ortiz established the two-year period and rejected landlord's documentary evidence allegedly showing otherwise.

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Case Caption:

Wong v. Repass

Issues/Legal Principles:

Husband and wife landlord may together commence owner occupancy proceedings against two separate tenants, and their attachment in the Golub Notice of the proposed alteration plans for the premises constitutes a statement of sufficient facts.

Keywords:

owner occupancy; res judicata

Court:

Civil Housing Court, New York County

Judge:

Hon. Douglas Hoffman

Date:

December 2, 1998

Citation:

NYLJ, page 29, col 2

Referred Statutes:

CPLR 602(a) & 3211(a)(8); RSC 2524.2(b) & 2524.4(a)(3); RPAPL 735(2)

Summary:

The husband and wife landlord together brought two owner occupancy proceedings against two separate tenants. On tenants' motion, the court first consolidated the proceedings because of the convenience for all parties and similarities of facts and law. The tenants moved to dismiss the petition on grounds that the law provides that only one of the owners of a building may seek to recover an apartment, and here the husband and wife are both simultaneously seeking such relief. The court rejected the tenants' argument because case law in the First Department holds that a husband and wife as co-owners may commence a personal use holdover and further case law holds that there is no limit to the amount of space a given owner may regain for personal use.

The factual allegations contained in the landlords' Golub Notice (the notice of non- renewal of the lease) not only specified how the landlords intended to utilize the recovered spaces, but attached copies of documents showing the present and proposed configurations (presumably architectural plans). The tenants moved to dismiss the petition on grounds that the Golub Notice failed to set forth sufficient facts, but the court rejected this argument finding that the attached plans constituted sufficient facts.

The tenants also moved to dismiss the petition on grounds that the Golub Notice was not served properly, arguing that it should be served in the same manner as a petition. The court rejected this argument, too, since there is no statute or case law requiring such method of service of the Golub Notice. The mailing of the notices was sufficient.

The landlords had brought a prior holdover proceeding against one of the tenants also on grounds of owner occupancy. It was discontinued with prejudice on January 30, 1996. This tenant moved to dismiss the holdover against him on grounds of res judicata, a legal term meaning (in a nutshell) that the legal and factual issues had already been resolved and cannot be relitigated. The court held that in the three years since the first holdover was brought, a change of circumstances had taken place which was sufficient to preclude dismissal of the current proceeding at this time. The court analogized to nonprimary residency cases where the appellate court has held that a prior nonprimary residency hearing which was discontinued did not forever bar an owner from commencing a new nonprimary residency proceeding where a change of circumstances occurs. The court, however, noted that in this case the hearing of additional facts is necessary to determine whether the 1996 case which was discontinued with prejudice has a res judicata effect on the current case. The court noted that this could not be done except in the context of the entire case at a trial, and after the landlords have presented their prima facie case, the tenants may then renew their application to dismiss if the facts adduced at trial support a res judicata determination.

The court also struck the tenants' affirmative defenses (on landlord's motion) which alleged that the landlords brought the action in bad faith since in recent months the landlords had rented vacant units in the building for rental amounts in excess of the legal regulated rent. The tenants denied paragraph 6 of the landlords' petition which states that the landlords seek to recover their apartments for their personal use. Case law holds that a court may dismiss a defense which is actually included in the general denials. The court further noted that it is the landlords' burden in their prima facie case to establish "good faith" in regard to their intention to recover the apartment for use as a primary residence. The court did not squarely address whether the landlords' rental of vacant apartments above the lawful rent in recent months may constitute "bad faith" so as to knock out a landlord's owner occupancy petition. It is unclear how the trial judge will respond to that particular legal theory.