Housing Court Decisions July 1998

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Case Caption:

Polymenopoulos v. Sadoff

Issues/Legal Principles:

Tenants do not lose primary residence where marital strife compelled the couple to maintain a second home.

Keywords:

nonprimary residency

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Anne Katz

Date:

July 27, 1998

Citation:

NYLJ, page 27, col 6

Referred Statutes:

none cited

Summary:

Landlords failed to establish by preponderant evidence that tenants no longer maintained their primary residence at the subject premises or that they had established a primary residence elsewhere. Tenants adequately explained their reasons for why they owned a cooperative apartment due to marital difficulties and in light of the fact that every night either the husband or the wife slept at the premises. Additionally, the second apartment was sold prior to trial.

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Case Caption:

Llorente v. Stackiewitz

Issues/Legal Principles:

Landlord cannot collect rent accrued for ten years in summary proceeding

Keywords:

laches; stale rent

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Saralee Evans

Date:

July 28, 1998

Citation:

NYLJ, page 21, col 1

Referred Statutes:

CPLR 205(a); General Obligations Law 17-101

Summary:

The appellate court affirmed the lower court's refusal to allow the landlord to seek ten years worth of rental arrears from the tenant in a summary proceeding. The court held that the delay was extreme and prejudiced the tenant, a recipient of public assistance, who would lose her apartment if $40,000 in rental arrears was not paid. The court limited the extent of the landlord's money judgment, but the case does not state how many months of rent the tenant was liable for.

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Case Caption:

1770 Davidson Avenue HDFC

Issues/Legal Principles:

Deceased tenant's son cannot succeed to his father's apartment which is not protected by rent stabilized laws.

Keywords:

succession rights; co-op apartments

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Elizabeth Tao

Date:

July 28, 1998

Citation:

NYLJ, page 21, col 2

Referred Statutes:

General Business law 352-eeee; NYC Administrative Code 26-504(a)

Summary:

The deceased tenant's son sought succession rights to the apartment, but the premises were a cooperative under an eviction plan. The father was a non-purchasing tenant, but was not a rent stabilized tenant. The only reason the father was never evicted under the eviction co-op plan was because he fit its exemption as a disabled person. The father's exemption, however, cannot be passed on to his son since the rent stabilization succession rights provisions have no application to co-operative buildings converted under an eviction plan.

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Case Caption:

Samuel v. Villafane

Issues/Legal Principles:

Landlord's holdover proceeding is dismissed since it was brought in retaliation for tenant's good faith complaints of violations in her apartment.

Keywords:

retaliatory eviction

Court:

Civil Housing Court, Kings County

Judge:

Hon. Callender

Date:

July 29, 1998

Citation:

NYLJ, page 24, col 5

Referred Statutes:

Real Property Law 223-b

Summary:

Landlord brought a holdover proceeding against the tenant who claimed that the proceeding was brought in retaliation for the tenant's complaints to the Department of Housing Preservation and Development regarding violations in her apartment. The landlord admitted that the tenant made complaints and also confessed that he suffered physical and mental anguish due to the apartment's condition. He said it bothered him that other apartments looked much better, but attributed the condition in tenant's apartment to the way she maintained her home. The court ruled in favor of the tenant finding that her complaints were made in good faith and that one of the reasons the landlord sought to evict her was due to her complaints which caused him to spend money to remove the violations. The case was therefore fit the legal criteria of a retaliation defense requiring the dismissal of the petition.

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Case Caption:

Matter of Waterside Management v. DHCR

Issues/Legal Principles:

Landlord altered tenants' storage space justifying DHCR's rent reduction order

Keywords:

rent reduction; storage space

Court:

Supreme Court, Queens County

Judge:

Hon. LaTorrella

Date:

July 29, 1998

Citation:

NYLJ, page 24, col 6

Referred Statutes:

9 NYCRR 2529.6

Summary:

Various rent stabilized tenants filed a complaint of decrease in services with the DHCR alleging that the landlord at one time provided tenants with storage space in the basement wherein the tenants were given individual storage bins with each tenant provided with a lock. This service was terminated in 1985. Initially the landlord denied that storage space was provided, stating that the super from time to time allowed tenants to keep property in the basement for short periods of time, but when too many tenants did this they had to discontinue the storage facility. The DHCR ruled that storage space was a required service (since it had initially been provided) and that its discontinuance resulted in a building wide rent reduction due to failure to provide the service. In a PAR (appeal) the owner completely reversed its position and stated that any tenant who wanted storage space could now have it, and thereupon the owner sought a restoration of the rent. The tenants asked the DHCR to stay the PAR pending an inspection on the issue of whether storage space had been restored. The inspector issued a report solely on the issue of whether the storage space currently provided was the same as or an adequate substitute for the level of storage space provided on the base date. The hearing officer found that the storage room service was not the same as previously provided and the difference is not de minimus as it resulted in a reduction of security causing one or more tenants to expend personal funds to rent commercial storage space outside the building. The hearing officer recommended that the owner's application to restore the rent be denied. The PAR commissioner ruled that there was a decrease in services that was not de minimus and that due to the diminution of services the hearing officer's decision was upheld on the PAR, and the owner's application for a restoration of the rent denied. The owner brought an Article 78 in Supreme Court (appeal of a PAR) on grounds that the DHCR decision was arbitrary and capricious. The owner complained that in the initial complaint the tenants had not brought up the issue of individual storage bins and the DHCR should not have considered that evidence in reaching its conclusion of reduction of services. The Supreme Court found that pursuant to the DHCR's de minimus policy, a tenant is required to prove that basement storage space was provided for in a specific lease clause or that the owner was providing such space for three years prior to the filing of the complaint. If the tenants cannot establish either of these predicates, then the DHCR would have to rule that the failure to maintain storage space is a de minimus violation of the rent regulation statutes and the owner would not have to continue providing the service. The Court ruled that since the owner reversed itself at the PAR stage and conceded that the tenants' leases provided for storage space, the DHCR correctly determined that the de minimus policy was not applicable. The Court ruled that based on the evidence the DHCR properly determined that the tenants had once had individual locked storage bins and since the bins were removed, a diminution of services occurred. Thus, the owner's Article 78 was dismissed. The owner will have to reinstate the storage bins in order to get the rent restored and be able to collect future stabilization rent increases.

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Case Caption:

1050 Tenants Corp. v. Lapidus

Issues/Legal Principles:

Landlord's legal fees reduced where fees litigation eclipsed the landlord-tenant litigation.

Keywords:

attorney's fees

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Martin Shulman

Date:

July 30, 1998

Citation:

NYLJ, page 21, col 1

Referred Statutes:

RPL 234

Summary:

The appellate court reversed the lower court's grant of attorney's fees to the landlord in the amount of $336,000. The landlord was the prevailing party in this contentious nonpayment proceeding. The landlord recovered $43,834.26 in rent from the tenant, but the tenant fought tooth and nail every way, including two unsuccessful appeals. The Appellate Term ruled that the questions presented in the appeal, while hotly contested, were not extraordinary or novel and faulted the landlord's firm from inflating the fees by having more than one attorney routinely assigned to many aspects of the representation when a single attorney would have sufficed. The Appellate Term reduced the fees.

Case Caption:

Byrd v. Smith

Issues/Legal Principles:

Tenant, who successfully defended eviction proceeding at trial, is entitled to attorney's fees pursuant to RPL Section 234.

Keywords:

attorney's fees

Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Arthur Birnbaum

Date:

July 21, 1998

Citation:

NYLJ, page 21, col 2

Referred Statutes:

RPL Section 234

Summary:

Landlord brought a holdover proceeding alleging nuisance. The court dismissed the landlord's case after trial. The appellate court affirmed the trial court's decision but modified it by granting attorney's fees to tenant in an amount to be determined by the trial judge.

The lease entitles the landlord to attorney's fees if it prevails in a proceeding against tenant. RPL Section 234 provides that if such a clause is in the lease, then tenant is entitled to attorney's fees if tenant prevails. The tenants were the "prevailing parties" by successfully defending the landlord's action. The landlord lost its case - it failed to obtain the central relief it sought (i.e., the eviction of the tenant and recovery of the apartment).. Therefore the tenants may recover reasonable attorney's fees.

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Case Caption:

Matter of Brettholtz v. Lynch

Issues/Legal Principles:

Tenant's apartment is deregulated due to tenant's failure to answer landlord's petition to verify tenant's household income pursuant to the "luxury decontrol" law.

Keywords:

high rent / high income deregulation; luxury decontrol;

Court:

Supreme Court, New York County

Judge:

lower court judge: Hon. Justice R. Braun

Date:

July 22, 1998

Citation:

NYLJ, page 26, col 2

Referred Statutes:

CPLR Article 78; NYC Admin. Code Section 504.3(c)(1)

Summary:

The landlord served tenant with a request to certify their income, pursuant to the high rent / high income decontrol provisions of the Rent Stabilization Law and Code. Tenant certified his income and mailed the form back to the Landlord. Landlord then filed a Petition with the DHCR seeking to verify the tenant's income and DHCR sent a form to Tenant requesting an Answer by a date certain. Tenant did not answer and the DHCR issued an order decontrolling the apartment. Tenant's Petition for Administrative Review ("PAR") was denied by the DHCR. Tenant then filed an Article 78 proceeding in Supreme Court to challenge the DHCR's Order. The Article 78 proceeding was also denied.

Although tenant, in an affidavit, denied receipt of the answer form, tenant's wife did not submit an affidavit denying receipt of the form. The DHCR submitted affidavits and exhibits from a supervisor and its mail operations manager. The Court held that the DHCR created a presumption that the tenants received the form and the tenants did not rebut this presumption.

The Supreme Court followed cases decided by the Appellate Division, First Department ("Nick" and "Barbaz") which held that when a tenant has not filed an answer with the DHCR, the DHCR is required, by provisions in the Rent Stabilization Law and Code, to issue an order deregulating the apartment. The Supreme Court also cited to another Appellate Division, First Department case ("Dowling") which held that the disputed sections of the law do not violate the due process provisions of the Constitution.

The Court recognized that it is unfair to deregulate an apartment where, as here, the tenant claims that the household income is under the amount set by the law, but that this unfairness should be addressed by the legislature, not the courts.

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Case Caption:

Matter for the Committee for the Preservation of Fresh Meadows, Inc. v. DHCR

Issues/Legal Principles:

The Court upholds the DHCR's Order granting the landlord an MCI increase.

Keywords:

DHCR proceeding; major capitol improvement ("MCI")

Court:

Supreme Court, Queens County

Judge:

Hon. Milano

Date:

July 22, 1998

Citation:

NYLJ, page 28, col 4

Referred Statutes:

CPLR Article 78; RSC Section 2526.2

Summary:

The DHCR issued an order which granted an "MCI" rent increase to the landlord based upon a building-wide window replacement and window sill project. The tenants' Petition for Administrative Review ("PAR") was also denied. The tenants then filed an Article 78 proceeding with the Supreme Court, which was also denied.

The tenants' opposition to the MCI increase was threefold. First, the tenants argued that the landlord may not collect an MCI increase because the owner did not comply with a prior order of the DHCR which directed the landlord to refund certain overcharges to the tenants and to roll back the rent. The Court found that the DHCR had never held enforcement proceedings to determine whether the landlord had complied with the rent rollback order. The Court decided that without enforcement proceedings and an order determining that the landlord had not complied with the rent rollback order, the Rent Stabilization Code does not preclude the owner from obtaining an MCI rent increase.

Second, the tenants alleged that the owner and the contractor had a relationship which resulted in inflating the price paid for the project. The tenants asked the DHCR to conduct a hearing on the issue, but the DHCR refused. The Court held that the DHCR's refusal was justified, because the tenants did not present any proof of their allegation.

Third, the tenants argued to the DHCR that the MCI increase should be denied because the windows installed are defective. The Court did not directly address this argument. However the Court found that the DHCR had received evidence from the owner substantiating the rent increase (copies of service contracts, contractors' statements and canceled checks), that there was a rational basis for the DHCR's decision and that the DHCR's decision was not arbitrary and capricious.

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Case Caption:

Fleetwood BJR LLC v. Crooks

Issues/Legal Principles:

Landlord's breach of the warranty of habitability is a valid defense to a holdover proceeding alleging breach of a substantial obligation of the tenancy due to tenant's repeated failure to pay rent.

Keywords:

holdover proceeding; chronic nonpayment of rent

Court:

City Court of Mount Vernon

Judge:

Hon. Seiden

Date:

July 22, 1998

Citation:

NYLJ, page 32, col 6

Referred Statutes:

TPR Section 2504.2(A); TPR Section 2503.5(a)

Summary:

Landlord brought a holdover proceeding against tenant alleging that tenant had breached a substantial obligation of the tenancy by repeatedly failing to pay her monthly rent. The landlord alleged that during the twenty-month period preceding this action, three summary proceedings for nonpayment of rent were commenced against tenant and that two rent demands were served upon tenant.

The tenant filed an answer setting forth various defenses and counterclaims and the landlord moved to dismiss the answer. The Court refused to dismiss the tenant's entire answer, finding that the matter must be tried because some of the tenant's defenses and counterclaims are valid. The case could not simply be decided based upon the number of nonpayment proceedings brought by Landlord - the Court must examine of the relevant circumstances at trial.

For example, the tenant alleged that one of the nonpayment proceedings was brought in New Rochelle, where the court lacked jurisdiction, rather than in Mount Vernon, the proper venue. The Court held that this is a valid defense to the landlord's holdover proceeding. The tenant also alleged that the landlord breached the warranty of habitability, which is why tenant did not pay rent. The Court held that this was a valid defense to the holdover proceeding, because the obligation to pay rent was "dependent upon and coextensive with the landlord's satisfactory maintenance of the leased premises."

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Case Caption:

Matter of Derfner Management Co. v. DHCR

Issues/Legal Principles:

The DHCR's decision to roll back the rent, after landlord failed to respond to DHCR's request for information, is upheld.

Keywords:

rent roll back; rent overcharge; Article 78 proceeding

Court:

Appellate Division, Second Department

Judge:

lower court judge: Hon. Posner

Date:

July 23, 1998

Citation:

NYLJ, page 24, col 6

Referred Statutes:

none cited

Summary:

Tenant filed an overcharge proceeding with the DHCR. The DHCR then sent the landlord a notice requiring him to provide proof of the rents collected for the apartment from the base date (probably April 1, 1984) until the date the complaining tenant took occupancy. When the owner did not provide the DHCR with the information requested, the DHCR rolled back the rent. The landlord filed an Article 78 proceeding to challenge the DHCR's decision and the Article 78 proceeding was denied. The appellate court affirmed the lower court's decision, noting that the DHCR's determination was not arbitrary and capricious.

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Case Caption:

9 Charlton Street Corp. v. Scheidell

Issues/Legal Principles:

Court finds that respondent did not establish the right to succeed to the deceased rent stabilized tenant's apartment as a non-traditional family member.

Keywords:

succession rights; non-traditional family member; financial interdependence

Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Howard Malatsky

Date:

July 24, 1998

Citation:

NYLJ, page 21, col 2

Referred Statutes:

RSC Section 2520.6[o][2]

Summary:

The trial court dismissed the landlord's holdover petition, finding that the respondent established his right to succeed to the apartment, but the appellate court reversed.

The deceased tenant apparently wanted respondent to succeed to the apartment. The deceased tenant's brother also gave respondent $23,000 from the proceeds of tenant's estate. The appellate court held that this was not enough to establish "interdependence in a familiar sense."

Although the respondent and the deceased tenant lived together for 12 years before the deceased tenant's death, they did not have a family-type relationship. The respondent did not prove that they intermingled finances or jointly owned property. The deceased tenant did not name the respondent as the executor of as a beneficiary under his will nor did he name the respondent as his agent in his healthcare proxy. The two held themselves out as close friends or roommates, not family members. Under these circumstances, the respondent did not prove that he was entitled to succeed to the deceased tenant's rent stabilized apartment.

Case Caption:

1560-80 Pelham Pkwy. Assoc. v Errico

Issues/Legal Principles:

Landlord who fails to monitor cessation of tenant's SCRIE benefits years ago cannot seek to recover back rent greater than six months in Housing Court.

Keywords:

SCRIE; laches; stale rent

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Sue Ann Hoahng

Date:

July 13, 1998

Citation:

NYLJ, page 28, col 6

Referred Statutes:

none cited

Summary:

Landlord sought rental arrears from tenant based on the fact that for a number of years the landlord billed tenant at a rate less then the legal registered rent due to a Senior Citizen Rent Increase Exemption (SCRIE), and the tenant paid the lesser amount billed. In late 1994, landlord discovered that tenant's SCRIE had expired as far back as 1979. Landlord brought a nonpayment proceeding to recover the difference between the lower rent paid by the tenant and the actual rent stabilized rent for all the months and years the discrepancy occurred. The lower court dismissed the petition on grounds of stale rent (legally known as "laches") because the landlord failed to monitor the SCRIE and engaged in undue delay in seeking relief to the detriment of the tenant who cannot possibly pay the thousands of dollars now owed. The Appellate Term, however, found that the lower court erred by dismissing the entire petition with prejudice. The Court held that the more permissible route was to grant the landlord a possessory judgment as to the most recent six-month period and limit the remainder to a money judgment only.

Notes:

A possessory judgment means that if the tenant does not pay the six months worth of rental arrears, the landlord can seek her eviction. A monetary judgment means that the landlord must go to regular civil court to enforce a money judgment against the tenant and cannot tie the claim for thousands of dollars of back rent to the woman's home. In civil court the landlord can put a lien on her bank account, garnish her wages, etc. etc, but cannot evict her from her home with a mere money judgment: the landlord would need a possessory judgment to accomplish that.

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Case Caption:

Uptown Realty Unlimited LLC v. Cruz

Issues/Legal Principles:

Landlord's failure to obtain a certificate of occupancy for five newly constructed apartments precludes landlord from collecting rent from tenants until the certificate is obtained.

Keywords:

certificate of occupancy

Court:

Civil Housing Court, New York County

Judge:

Hon. Laurie Lau

Date:

July 15, 1998

Citation:

NYLJ, page 23, col 2

Referred Statutes:

Multiple Dwelling Law 301 & 302

Summary:

The tenant lives in one of five apartments which the landlord constructed on the roof of the building as "penthouses." The landlord does not have a certification of occupancy for any of these apartments but alleges that it has initiated the necessary procedures to obtain a certificate of occupancy. The landlord brought a nonpayment proceeding against the tenant, but the court ruled that the landlord could not collect any rent for these newly constructed apartments until a certificate of occupancy was obtained pursuant to Multiple Dwelling Law Section 301 and 302.

Notes:

The tenant will be able to remain in the apartment rent-free until such time as the landlord obtains a certificate of occupancy. There are Appellate Division decisions holding that in order to preclude the landlord from collecting rent where there is no certificate of occupancy, the tenant must show that conditions exist detrimental to the health and safety of the tenant. This judge is assuredly familiar with those decisions, but she apparently based her own decision on the newly constructed nature of the apartments.

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Case Caption:

Fisher v. Bandler

Issues/Legal Principles:

Rent Stabilized tenant who prevails in a succession rights claim is entitled to attorney's fees where an attorney's fees clause is contained in the lease.

Keywords:

succession rights; attorney's fees

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Margaret Taylor

Date:

July 13, 1998

Citation:

NYLJ, page 28, col 6

Referred Statutes:

Rent Stabilization Code 2523.5(b);Real Property Law 234

Summary:

The tenant prevailed on her claim to succeed to the rent controlled apartment as a remaining family member. She sought attorney's fees as the prevailing party and the Appellate Term upheld her request as a result of the recent decision by the Appellate Division in 245 Realty v. Sussis which permits a rent stabilized tenant to recover attorney's fees in a succession rights claim if a clause in the lease provides attorney's fees to the landlord if the landlord prevails in litigation. The Appellate Term, however, reversed the amount of the tenant's fees from roughly $39,000 to $7,500 because many of the tenant's fees were incurred unnecessarily, such as, withdrawing a pre-answer motion to dismiss the petition, having her own summary judgment motion denied, and unsuccessfully opposing landlord's motion for an order of discontinuance after refusing to consent to it earlier.

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Case Caption:

Marcy Realty Co. v. Lee

Issues/Legal Principles:

Landlord is not entitled to any rent until an amended certificate of occupancy is issued for the tenant's basement apartment.

Keywords:

certificate of occupancy; sanctions

Court:

Civil Housing Court, Queens County

Judge:

Hon. B. Greenbaum

Date:

July 15, 1998

Citation:

NYLJ, page 25, col 4

Referred Statutes:

Multiple Dwelling Law 300, 301 & 302

Summary:

The landlord brought a non-payment proceeding against a tenant who resides in a basement/cellar apartment in a multiple dwelling. The tenant failed to appear, but now seeks to set aside the judgment obtained against him by his default on grounds that the certificate of occupancy does not reflect the basement residential apartments. The certificate of occupancy showed that the cellar contained a doctor's office, janitor's apartment, boiler room, laundry meter room, storage room, and lobby. It was altered by construction to add residential apartments. The tenant argued that if the certificate of occupancy is incorrect the landlord is not entitled to collect rent and the nonpayment petition must be dismissed. The landlord contended that the Multiple Dwelling Laws are applicable only when no certificate of occupancy has been issued, rather than as here where a certificate had been issued but an apartment is occupied in violation of the certificate. The court observed that the landlord failed to submit any evidence that it had obtained a permit to do the construction in the basement, thereby concluding that the basement residential apartments are illegal. The court noted that the tenants have commenced a Supreme Court action to compel the landlord to legalize the apartments by filing for and obtaining an amended certificate of occupancy. The court ruled that the landlord cannot collect any rent in this proceeding until a certificate of occupancy is obtained. The court further warned the landlord that if nonpayment proceedings are commenced against any other tenants, the landlord could be subjected to sanctions.

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Case Caption:

HCC Real Estate Corp. v. Zeldin

Issues/Legal Principles:

Tenant denied a stay of eviction where application for a stay was sought six months after judgment entered by stipulation.

Keywords:

stays; warrant of eviction; stipulation

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Bruce Gould

Date:

July 17, 1998

Citation:

NYLJ, page 22, col 1

Referred Statutes:

none cited

Summary:

The lower court refused to further stay execution of the warrant when the tenant's application for a stay was made more than six months after the tenant had agreed to vacate the apartment in a stipulation of settlement since "stay granted should not be for an eternity." The tenant tried to argue that the landlord did not have standing to maintain the proceeding from the beginning, but the Appellate Court agreed with the lower court that the tenant waived this issue when, represented by an attorney, the tenant consented to the judgment.

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Case Caption:

15th Associates v. Cintron

Issues/Legal Principles:

Senior citizen tenants given two weeks to permanently remove granddaughter from apartment due to her nuisance behavior, or face eviction themselves.

Keywords:

nuisance; post-judgment cure

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Marian C. Doherty

Date:

July 17, 1998

Citation:

NYLJ, page 21, col 1

Referred Statutes:

none cited

Summary:

The rent controlled tenants are senior citizens (78 and 91 years old) and have lived in their apartment for 55 years. The landlord brought a nuisance holdover due to the misconduct of their adult granddaughter who lives with them. At trial several neighboring tenants testified that the granddaughter engages in repeated anti-social behavior in the building's common areas, including alcohol and/or drug abuse. The lower court dismissed the petition, finding that the tenants were not aware of their granddaughter's behavior. The Appellate Term reversed, finding that even if they were unaware, the landlord proved a documented nuisance. The Court found that they were incapable of controlling her yet no credible plan for her rehabilitation was presented to the court below. In balancing the interests of the other tenants and building staff with the extreme hardship that would result from evicting the senior citizens, the Appellate Term exercised its discretion by giving the tenants two weeks to permanently remove their granddaughter from the apartment, and if they didn't, they too would face eviction.

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Case Caption:

500 West End Avenue Owners v. Deen, Jr.

Issues/Legal Principles:

Tenant cannot live as a rent stabilized tenant for 20 years, then claim he is rent controlled when landlord terminates tenant's rent stabilized lease on nonprimary residency grounds.

Keywords:

nonprimary residency; rent control

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Anne Katz

Date:

July 17, 1998

Citation:

NYLJ, page 21, col 2

Referred Statutes:

none cited

Summary:

The rent controlled tenant vacated in 1976 and the son, respondent in this nonprimary residency proceeding, signed a rent stabilized lease with the prior landlord in 1977. Rent stabilized renewal leases were signed successively through 1996, and the apartment has been registered with the DHCR as stabilized. Landlord brought a nonprimary residency proceeding and now the respondent son claims that he is in fact a rent controlled tenant because he resided with his mother and is entitled to be named the rent controlled tenant pursuant to the succession rights laws. The lower court dismissed the petition for failure to allege that the apartment was rent controlled. The Appellate Term reversed on grounds that in 1976 he was not the rent controlled tenant, but rather had a "potential succession claim under rent control which he did not assert." The court also argued that he could not at this late date contest his status as a rent stabilized tenant when he voiced no objection for twenty years.

Notes:

It's not clear why the tenant is pushing the issue of rent control, because if he is not in fact occupying the apartment as his primary residence the particular rent regulatory status of the apartment is not going to help him keep his apartment if he has violated the primary residency lawsțalthough he might have a claim for overcharges. Perhaps this motion was brought for leverage to place the tenant in a good bargaining position if he has a weak case.

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Case Caption:

Emil Friedman Washington Avenue LLC v. Young

Issues/Legal Principles:

Tenant is allowed a ten-day cure period to sign a renewal lease.

Keywords:

renewal leases; postjudgment cure

Court:

Appellate Term, 2nd and 11th Judicial District

Judge:

lower court: Hon. J. Rodriguez

Date:

July 16, 1998

Citation:

NYLJ, page 26, col 3

Referred Statutes:

RPAPL 753(4)

Summary:

For reasons not stated, the tenant failed to sign a rent stabilized lease renewal. The landlord brought a holdover proceeding for her eviction. The lower court held that the tenant was entitled to a ten-day post-judgment cure period, enabling her to sign the renewal and still keep her tenancy. The appellate court affirmed, and went on to discuss the issue that RPAPL 753(4) (the post-judgment cure statute) does not expressly state when the ten-day period must begin. Apparently the lower court set the beginning of the period as from the date of notice of entry of the judgment. The appellate court regarded this issue as academic in this case due to the fact that within ten days after the judge's decision the tenant asked for a renewal lease, but the landlord refused to provide one. On the 9th day, tenant's attorney asked the landlord's attorney for a lease to, but this request was denied as well. The Appellate Term concluded that the failure to cure within the 10-day period was caused by the actions of the landlord and its attorney, and such actions should not inure to landlord's benefit by resulting in the tenant's eviction. The Appellate Term distinguished its holding in this case to that of Belmont Owners Corp. v. Murphy where it was held that a court is without power to enlarge the 10-day postjudgment cure period to permit the tenant sufficient time (at least 30 days) to cure by evicting a subtenant.

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Case Caption:

East 53 Co. v. Tarwid

Issues/Legal Principles:

Tenant defeats landlord's nonprimary residency proceeding by her undisputed affidavit attesting to her ongoing residential usage of two nonadjacent apartments.

Keywords:

nonprimary residency

Court:

Civil Housing Court, New York County

Judge:

Hon. Jerald R. Klein

Date:

July 15, 1998

Citation:

NYLJ, page 23, col 1

Referred Statutes:

CPLR 3212

Summary:

The landlord brought a holdover proceeding against the tenant on grounds of nonprimary residency. The tenant claims that she had resided in apartment 2D and apartment 2F since 1951. The landlord claims that the tenant uses 2D for storage only, but she claims that she lived with her now deceased husband and children in both apartments with the consent and knowledge of the prior landlord. She also claims that the prior owner changed the configuration of 2D to accommodate her tenancy. The current landlord and agent do not dispute that they have no information about events prior to their purchase of the building and that nothing in the file supports or contradicts the tenant's allegations. The court noted that to determine whether two nonadjacent units constitute a single residence three factors must be determined. The intent of the tenant, the landlord's knowledge and the landlords' acquiescence in agreement to the use of the two apartments. The tenant's motion papers, according to the court, clearly establish those three factors. The landlord's opposition papers failed to refute the tenant's position nor presented any evidence to show any change her actual usage of both apartments. Since the landlord has the burden of proving that the tenant does not occupy an apartment as their primary residence, and this landlord failed to do so, the court granted the tenant summary judgment (which means that the tenant wins and the case need not go to trial).

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Case Caption:

New York City Housing Authority v. McClinton

Issues/Legal Principles:

Tenant of federal subsidized housing who failed to recertify her income is entitled to a ten-day cure period.

Keywords:

post-judgment cure period; subsidized tenants; breach of lease

Court:

Civil Housing Court, Bronx County

Judge:

Hon. H. Sherman

Date:

July 15, 1998

Citation:

NYLJ, page 23, col 5

Referred Statutes:

RPAPL 749, 753; CPLR 2214, 409(b); 24 CFR 966.4, 880.6, 247.3; RPL 231

Summary:

The tenant's lease was terminated by the City-landlord due to her alleged failure to recertify her income. The City argued that the tenant is not allowed to cure her omission (by recertifying) during a holdover proceeding where there has been an administrative determination to terminate the tenancy. The tenant submitted a succinct affidavit claiming that she brought in all documentation to the City's office and has therefore cured. The City also challenged that her affidavit was insufficient to sustain a motion to dismiss the case. The court agreed with the City that the tenant's bare three sentence affidavit, coupled with her failure to attach proof of recertification, limited the court's ability to entertain her motion. Instead the court converted the motion into one for summary judgment and rendered its decision. The court found that the proceeding was based on the facts presented at the administrative decision and those facts and decision cannot be challenged in Housing Court. The facts included four opportunities given by the City for the tenant to recertify. The issue before the court was whether RPAPL 749 pertaining to issuance of the warrant is applicable to HUD subsidized tenants regulated under federal laws. The court held that the application of the RPAPL to such situations is regulated by the Escalera consent decree, a federal case which dealt with administrative hearings and their relationship to termination proceedings. Although Escalera did not deal with judicial procedures or statutory protections available to tenants in such proceedings, the court held that Escalera implied that the application of RPAPL 749 in its entirety is permitted. Failure to submit income recertification constitutes material noncompliance with the lease in such federally subsidized apartments. The City tried to analogize this material noncompliance with the lease with criminally undesirable conduct which also can result in the termination of a subsidized tenant's lease. The court ruled that they were not comparable, and instead compared the tenant's failure to recertify with a rent stabilized tenant's failure to sign a renewal lease, which case law has determined is a curable breach. The court also noted that the HUD handbook regarding recertification seems to indicate that failure to certify is curable. An exception would be if the non-recertification involved fraud, which the court concluded is not germane in this case. The court opined that the legislative history of RPAPL 753(4) indicates its applicability to all residential tenants. The court thereupon granted judgment against the tenant for failure to recertify, but gave her a ten-day period in which to cure the breach and thereby save her subsidized tenancy.

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Case Caption:

Fairmont Manor Co. v. Michael

Issues/Legal Principles:

Tenant who lost at trial is entitled to post-judgment 10-day cure period since landlord served a notice to cure before commencing litigation.

Keywords:

nuisance; post-judgment cure

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Arlene Hahn

Date:

July 13, 1998

Citation:

NYLJ, page 28, col 6

Referred Statutes:

RPAPL 753; Rent Stabilization Code 2524.3(a)

Summary:

Landlord brought a holdover proceeding against the tenant on grounds of nuisance. At trial the landlord proved to the satisfaction of the lower court that the tenant caused a nuisance by prolonged screaming, cursing, and other loud behavior at all hours of the night. The tenant did not testify on her own behalf so as to refute the landlord's witnesses. The Appellate Term agreed with the trial court that a nuisance was sustained, but the trial court refused to grant the tenant a ten-day stay period after judgment. The Appellate Term held that since a notice to cure was served, the tenant must be afforded the remedy of a post judgment cure. (In essence the Appellate Term is giving the tenant a second chance to conduct herself properly.)

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Case Caption:

NYCHA v. Broome

Issues/Legal Principles:

Respondent denied right to succeed to her sister's apartment when the City transferred the sister to another apartment.

Keywords:

succession rights; City housing

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Marian C. Doherty

Date:

July 14, 1998

Citation:

NYLJ, page 25, col 1

Referred Statutes:

New York City Housing Authority Management Manual, ch. VII

Summary:

Respondent's application to succeed to her sister's apartment as a remaining family member was denied by the court. The court ruled that when the New York City Housing Authority (the landlord) transferred the sister to another apartment in the building, the respondent lost all rights to remain in the apartment. The Appellate Term upheld this rule or else "a single tenant family could retain multiple apartments where one member of the household requests a transfer."

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Case Caption:

Spaulding v. Santana

Issues/Legal Principles:

Trial judge erred by basing judgment against tenant in unlawful sublet case on grounds of tenant's nonprimary residency when the notice to cure never mentioned tenant's nonprimary residence as a factual ground supporting landlord's allegation of unlawful sublet.

Keywords:

unlawful sublet; nonprimary residency; postjudgment cure

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Eardell J. Rashford

Date:

July 14, 1998

Citation:

NYLJ, page 25, col 2

Referred Statutes:

RPAPL 753(4); RPL 226-b

Summary:

Tenant allegedly sublet the premises without the landlord's consent. The lower court granted judgment for the landlord on grounds that the premises was not occupied by the tenant as their primary residence. However, the Appellate Term pointed out that this allegation was not even alleged in the 10-day notice to cure. Nonetheless, the Appellate Term upheld the lower court's decision on grounds that the trial evidence supports a find of illegal subletting in that the tenant installed various occupants in the apartment and concurrently leased another Manhattan apartment. The court granted the tenant a ten-day period to cure.

Notes:

A ten-day period to cure after trial means that if the tenant moves back into the apartment, tenant will not be evicted from the apartment. At most, the tenant may be liable for the landlord's attorney's fees since the landlord was the prevailing party. The reason this tenant was forced to pursue an appeal is because of the lower court's damaging legal conclusion that the apartment is not occupied as the tenant's primary residence. Without a doubt at the end of the tenant's lease, this landlord will bring a nonprimary residence proceeding. Unlike an unlawful sublet proceeding, a nonprimary residency proceeding does not provide a tenant a cure period. In that future nonprimary residency proceeding, the landlord would merely have to attach the lower court's finding of nonprimary residency in the sublet case, and the landlord's victory is much more formidable to overcome (based on doctrines of law known as res judicata or collateral estoppel).

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Case Caption:

Rosenfeld v. New York City Rent Guidelines Board

Issues/Legal Principles:

Implementation of Rent Guidelines Board's vote on new rent increases is stayed due to Chairman's refusal to share informational data with other Board members.

Keywords:

rent guidelines; preliminary injunction

Court:

Supreme Court, New York County

Judge:

Hon. Louis York

Date:

July 15, 1998

Citation:

NYLJ, page 21, col 2

Referred Statutes:

Rent Regulation Reform Act of 1997

Summary:

In June, 1998, the New York City Rent Guidelines Board voted to increase rents by 1% for a one-year renewal lease and 2% for a two-year renewal lease applicable to rent stabilized leases commencing October 1, 1998. The two tenant representatives on the Board protested that they were not given copies of a study conducted by the Board which assessed the impact of Albany's 1997 legislation of new rent laws. The tenant representatives wanted this study before the vote took place and were given some information, but not the materials, they alleged, which would allow them to completely understand the report. The Chairman of the Board alleged that the desired report was statistically flawed and thus not worth disclosing, but the tenant representatives argued that it is up to the entire Board to determine whether or not it should be made available, rather than left to the unfettered discretion of the Chairman alone to decide its use or non-use. The court took note of the Chairman's "cynical maneuvering" of the Board. After refusing to release the report, he then voted for its release after determining that his vote would not affect the outcome. The court noted that normally a chairman refrains from voting or taking sides in order to maintain control over factions and usually votes only to break a tie. The court also noted the trend toward openness of public agencies to share information with the public. The tenant representatives sought a preliminary injunction from the implementation of the new rent guidelines pending release of the staff report. In determining the motion, the court held that the Board had a duty to disclose all data made available to it and that the material contained in the withheld report was relevant. The court stayed the implementation of the rent guidelines increases and directed the parties to move for a final disposition of the action within several days of the court's decision.

Notes:

See Law Journal entries for the week of August 3-5, 1998 for follow-up of this matter.

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Case Caption:

Capasso v. Tunney

Issues/Legal Principles:

Tenant who defaulted under stipulation was obligated to pay the $10,000 "penalty" fee agreed to in the stipulation.

Keywords:

stipulation; assessment of interest

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Laurie Lau

Date:

July 13, 1998

Citation:

NYLJ, page 29, col 1

Referred Statutes:

CPLR 5001 & 5019

Summary:

In this nonpayment proceeding, tenant defaulted in his rent payments under a stipulation. The Appellate Term held that interest should be assessed against the tenant from the date she defaulted under the stipulation. Tenant sought to also be excused from a $10,000 "penalty" fee provided for in the stipulation if he defaulted under its terms. The Appellate Term ruled that since he was represented by counsel and negotiated a global settlement which provided for this penalty fee, it must be upheld. The court noted that tenant did not move to vacate the stipulation, but merely sought to delete the $10,000 penalty clause from the stipulation.

Case Caption:

City of New York v. Stewart

Issues/Legal Principles:

Where there is a prime tenant in possession, an owner cannot maintain a holdover proceeding against the licensee or subtenant of the prime tenant without joining the prime tenant.

Keywords:

failure to join necessary party; licensee; subtenant

Court:

Appellate Term, 2nd Department

Judge:

Hon. Kassoff, Aronin and Scholnick (name of lower court judge is not mentioned in opinion)

Date:

July 7, 1998

Citation:

NYLJ, p 30, col 2

Referred Statutes:

none cited

Summary:

City of New York (landlord) brought a holdover proceeding against the licensee or subtenant of the prime tenant. City of New York did not name tenant as a respondent in the holdover proceeding and did not prove that tenant had surrendered possession of the premises to landlord. The Appellate Term decided that the eviction proceeding should be dismissed. The Court stated "where there is a holdover tenant in possession, an owner cannot maintain a proceeding against the licensee or subtenant of the holdover tenant without joining the holdover tenant."

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Case Caption:

Dearie v. Hunter

Issues/Legal Principles:

Nonpayment proceeding is dismissed where three day notice signed by landlord's attorney fails to comply with federal law.

Keywords:

rent demands, violations, stipulations

Court:

Civil Court, Housing Part, New York County

Judge:

Hon. Martino

Date:

July 8, 1998

Citation:

NYLJ, p. 31, col 3

Referred Statutes:

Social Services Law Section 143(b) (the "Spiegel" law); 15 USC Section 1692(g)

Summary:

Landlord and unrepresented tenant entered into a stipulation of a nonpayment proceeding wherein tenant agreed to pay a certain amount of rent by a date certain. When tenant failed to pay the rent agreed-upon in the stipulation, landlord obtained a judgment of possession and the warrant issued to the marshal. Tenant finally obtained a legal services attorney to represent him. Tenant's attorney made a motion asking the court to vacate the stipulation and judgment and dismiss the proceeding because (1) the rent demand did not comply with the FDCPA, (2) the existence of a Spiegel Law defense and for other reasons. The Court granted the tenant's motion. A stipulation of settlement can only be vacated upon a showing of good cause. The tenant showed good cause because he was pro se and unsophisticated and failed to raise valid defenses. The tenant proved the existence of code violations at the premises by showing a copy of a DHPD violation printout and proving that the DSS had received notice in the form of a letter from DHPD to DSS. The tenant thereby proved a Spiegel Law defense [Social Services Law Section 143(b)]. In addition, the rent demand had been served by an attorney who was deemed a "debt collector" as defined by a federal consumer protection statute known as the Fair Debt Collections Practices Act ("FDCPA"). A debt collector must give the debtor (i.e., the tenant) a thirty-day validation period as required by the FDCPA. A rent demand which fails to comply with the FDCPA is ineffective as a predicate notice to a nonpayment proceeding. A defective predicate notice deprives the court of jurisdiction and mandates dismissal.

Notes:

If the landlord signs the rent demand, the FDCPA is not triggered. The application of this federal consumer protection statute to tenant's rights is a recent development as a result of a December, 1997 decision in Federal Court in the case of Romea v. Heiberger & Associates, 988 F. Supp. 712 (Southern District). Disclosure: Colleen McGuire and her co-counsel Robert Sokolski are the attorneys on this case which is currently on appeal in the Court of Appeals for the Second Circuit. The defendant (the landlord's attorney) signed the three day rent demand and argues that the FDCPA should not be applicable to tenants.

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Case Caption:

I.N. Ovington Corp. v. Surdo

Issues/Legal Principles:

Son proves that he resided with his mother (deceased rent controlled tenant) for more than two years prior to his mother's death, and thereby obtained succession rights to his mother's apartment.

Keywords:

succession rights

Court:

Civil Court, Housing Part, Kings County

Judge:

Hon. Peter Wendt

Date:

July 8, 1998

Citation:

NYLJ, p 31, col 4

Referred Statutes:

NYC Rent and Eviction Regulations Section 2204.6(d)(1); RSC Sections 2523.5(b)(2) and 2520.6(o); CPLR Section 4519

Summary:

Landlord brought a holdover proceeding against the adult children of the deceased rent-controlled tenant, claiming that they are licensees whose license expired when their mother died. At trial, the deceased tenant's son proved that he resided with the deceased tenant for two years prior to her death, thereby entitling him to succession rights in accordance with the rent control regulations. The son's proof consisted of a driver's license, voter's registration, income tax records, telephone records, bank statements, mail addressed to him at the premises, moving receipts, canceled checks to the building's employees, affidavits from friends and relatives and the testimony of a friend of deceased tenant's son, all of which proved that the son had been living with his mother since 1969. The Court made this finding notwithstanding the fact that (1) the son signed a mortgage agreement for a house in Brooklyn in 1991 and (2) the rent-controlled tenant never listed her son as an occupant of the apartment on her application for benefits pursuant to the Senior Citizens Rent Increase Exemption ("SCRIE") program. The son explained that he was married in 1978 but separated after a few months, but never obtained a divorce due to the son's religious beliefs. The son signed a mortgage agreement in 1991 solely as a guarantor (not a mortgagee) solely to help his wife obtain favorable refinancing terms. The mother's failure to list her son as an occupant on the SCRIE application is only one factor for the court to consider and is not dispositive of the son's succession rights claim.

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Case Caption:

Roxborough Apt. Corp. v. Becker

Issues/Legal Principles:

Holdover proceeding is dismissed because the landlord received and retained three rent checks from tenant after the notice of termination was served upon tenant and before the holdover proceeding was commenced.

Keywords:

waiver; attorney's fees

Court:

Civil Court, Housing Part, Kings County

Judge:

Hon. Acosta

Date:

July 8, 1998

Citation:

NYLJ, p 39, col 3

Referred Statutes:

RPL Section 234; RSL Sections 26-511(c)(4) and (9); RSC Section 2524; CPLR Section 2221

Summary:

Landlord served a notice of non-renewal upon a rent stabilized tenant and then commenced a holdover proceeding based upon nonprimary residence. However, the landlord received and retained three rent checks from tenant after the notice of termination was served upon tenant and before the holdover proceeding was commenced. The Court granted the tenant's motion to dismiss the proceeding on the grounds that acceptance of rent vitiated the termination notice. The tenant then made a motion asking the court to order the landlord to pay his attorney's fees. The court granted the tenant's motion. The tenant's lease included a clause which permitted the landlord to collect attorney's fees from the tenant if the landlord is successful in a proceeding brought against the tenant. Real Property Law Section 234 states that if there is an attorney's fees clause in a lease, then the tenant is also entitled to attorney's fees if the tenant is successful in a proceeding against landlord.

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Case Caption:

240 West 98th Street Associates v. Ungar

Issues/Legal Principles:

DHCR, not Civil Court, is the exclusive forum with jurisdiction to determine Fair Market Rent Appeals

Keywords:

fair market rent appeal

>b> Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Anne Katz

Date:

July 8, 1998

Citation:

NYLJ, p 30, col 4

Referred Statutes:

RSC Sections 2521.1 and 2522.3; CPLR Sections 4518 and 5501[a][1]

Summary:

Landlord sued tenant for nonpayment of rent and tenant alleged rent overcharge as a defense. Tenant commenced occupancy in July 1990 as the first rent stabilized tenant after the rent controlled tenant vacated. Landlord prepared an initial rent registration in 1991, served it upon tenant and filed it with the DHCR. The Appellate Term decided that the trial court erred by not accepting landlord's evidence of service upon the tenant and filing with the DHCR. The trial court also erred by conducting a "fair market rent appeal" hearing and reducing the tenant's rent. The Appellate Term reversed the trial court's decision and remanded the case back to the trial court for a new trial and recalculation of the rent due landlord. The Appellate Term explained that the DHCR has exclusive jurisdiction over fair market rent appeals. It is undisputed that tenant never filed a fair market rent appeal with the DHCR. Therefore the correct initial legal regulated rent is the amount registered with the DHCR in 1991 and set forth in the lease. The trial court erred by undertaking to set the fair market rent for the premises.

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Case Caption:

Matter of Garramone v. DHCR

Issues/Legal Principles:

The DHCR must order a rent reduction if it finds that services have been reduced.

Keywords:

rent reduction; decreased services

Court:

Supreme Court, Queens County

Judge:

Hon. Justice Milano

Date:

July 8, 1998

Citation:

NYLJ, p 39, col 5

Referred Statutes:

NYC Administrative Code Section 26-514

Summary:

Rent regulated tenants filed an Application for a Rent Reduction Based Upon Decreased Building-Wide Service alleging deficient services. The DHCR conducted an inspection, found that services had been reduced and the rent administrator ordered a rent reduction to the level in effect prior to the most recent adjustment. The owner filed a Petition for Administrative Review ("PAR") and DHCR's deputy commissioner upheld the rent reduction on the basis of its finding that certain public hallway windows were defective or in a state of disrepair but remanded the case to the rent administrator for reconsideration of whether certain other service reductions (e.g., reduction in storage facilities) formed the basis for a rent reduction. The owner filed an Article 78 proceeding with the Supreme Court to challenge the DHCR's PAR decision, alleging that it was arbitrary and capricious for the DHCR to rely upon inspections conducted nineteen months and again three years after the tenant's complaint was filed. The Court upheld the DHCR's PAR order. RSC Section 26-514 requires the DHCR to order a rent reduction when it finds that the owner has reduced services. Neither the DHCR nor the Court has the discretion to find that a rent reduction is not warranted if services have in fact been reduced.

Case Caption:

Bedford Gardens Company v. Silberstein

Issues/Legal Principles:

Mitchell-Lama surcharges are not rent and therefore cannot be sought in Housing Court by landlords.

Keywords:

rent & surcharges

Court:

Appellate Term, 2nd & 11th Judicial Districts

Judge:

lower court: Hon. R. Mason

Date:

June 29, 1998

Citation:

NYLJ, page 30, col 4

Referred Statutes:

HPD Rule and Regulations 3-03(b); RPAPL 711(2)

Summary:

Mitchell-Lama tenants whose income is too high to qualify for any subsidy are considered market rent tenants and their rent is determined periodically by the Department of Housing Preservation and Development (HPD) who have jurisdiction over Mitchell-Lama buildings. If the tenant's income exceeds the maximum limit, the tenant is required to pay a surcharge of 50% of the basic rent. If the tenant does not submit an income affidavit, they must pay 150% more above the basic rent. The landlord took the position that the surcharge is not rent, but on appeal it changed its stance and stated that the surcharges are rent and thus are subject to collection in Housing Court. If charges are not deemed "rent" thy are not collectible in Housing Court and the landlord must go to Civil Court to collect these monies. The court held that the HPD rules do not support a position that surcharges are rent. The appellate court dismissed the petition because a nonpayment proceeding will not lie since surcharges are not permissibly sought in Housing Court.

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Case Caption:

Heights Associates v. Bautista

Issues/Legal Principles:

Appellate court ignores the law by ruling that a current owner cannot be held liable for treble damages on overcharges collected by a prior owner.

Keywords:

overcharges; treble damages

Court:

Appellate Term, 2 & 11th Judicial Districts

Judge:

lower court: Hon. G. Badillo

Date:

June 29, 1998

Citation:

NYLJ, page 30, col 1

Referred Statutes:

RSL 26-517(e); 9 NYCRR 2526.1(f)(2); RSC 26-516(a)

Summary:

Tenant was awarded overcharges, but the lower court did not award treble damages. On a motion to renew and reargue the lower court then granted the tenant treble damages and the landlord appealed both awards. The Appellate Term reversed and sent the matter back to the trial judge for a determination on the amount of the overcharges. During the proceedings, tenant showed that the rent listed in the 1991 and 1992 annual registrations statement filed four years prior to the most recent registration statement was $405.04. The 1993 statement cited a vacancy and the rent was listed as $750.00. The 1994 statement lists the tenant who took possession on March 1, 1994 at a rent of $765 per month. Tenant argued that the legal rent was $405.04 because of the landlord's failure to file a proper registration statement. Landlord argued that when it took title in 1995, the $765 was what was listed on the rent rolls it received. The appellate court ruled that the amount of the overcharge should be calculated as the difference between what the tenant was charged and what the rent would have been, including the lawful vacancy, renewal and MCI increase. The lower court relied on RSC 26-516(a)(i) which imposes a penalty on an owner for failure to properly register. The appellate court held that this statute does not supply a basis for the calculation of rent overcharges were a landlord registers an incorrect amount. In other words, simply because a landlord registers an improper rent, that does not mean that when the court is faced with determining the lawful rent, that the court should deny the landlord any lawful increases, including MCIs. The appellate court also determined that the current landlord cannot be liable for the overcharges collected by the prior owner. And in any event, the appellate court found no basis for the treble damages (akin to punitive damages) because in the court's eyes the current owner's acts were not wilful since it did not participate in the wrongdoing. Although the Rent Stabilization Code provides that a current owner can indeed be liable for treble damages arising from overcharges collected by a prior owner, the court held that the statute "is out of harmony with the statute [RSL 26-516(a) requiring proof of willfulness for treble damages] that it is designed to implement and with established principle of law and cannot be applied." The court held that it is an issue of fact whether the current landlord is liable for treble damages on the overcharges that it personally collected.

Notes:

The appellate court's decision is incredulous. The court cites a statute that holds current owners liable for treble damages for overcharges collected by past owners, but then the court cavalierly ignores the statute and decides that it is unworthy. Courts are required to interpret the law as it is written by the legislature. If they do not look fondly upon a particularly law, they have zero basis to disregard it. That is what this appellate court did, and they did so in such an unabashed manner that it's almost shocking. Hopefully, this case will be taken up on appeal and roundly overturned. And hopefully, this appellate panel will be reprimanded for its blatant "judicial activism" in favor of property owners.

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Case Caption:

Giddings v. Waterside Development Company

Issues/Legal Principles:

Tenant who unlawfully sublet, but was not evicted, is not entitled to attorney's fees.

Keywords:

attorney's fees; sublet

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Saralee Evans

Date:

June 30, 1998

Citation:

NYLJ, page 26, col 1

Referred Statutes:

RPL 234

Summary:

Landlord sought a certificate of eviction at HPD against a Mitchell Lama tenant on allegations that the tenant had repeatedly sublet her apartment without the landlord's consent. The administrative hearing officer concluded that the tenant did not engage in profiteering and that the breach of the lease was curable. Thereafter tenant sought attorney's fees and so did the landlord. The landlord was not the prevailing party because it did not succeed in recovering a certificate of eviction, so attorney's fees were denied to it. The tenant's request for attorney's fees were also denied on the principle that a tenant who breached their lease should not recover attorney's fees where they committed a wrong.

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Case Caption:

DiPillo v. Toro

Issues/Legal Principles:

Court struck provisions of lease on grounds of unconscionability since the lease did not reflect the agreed upon rent and demanded $20 per day late fees .

Keywords:

unconscionable lease clauses

Court:

Town of Ossining, Westchester County

Judge:

Hon. Shapiro

Date:

July 1, 1998

Citation:

NYLJ, page 30, col 4

Referred Statutes:

none cited

Summary:

In January the landlord orally agreed to rent the space for $850 or $870 beginning in February. But on February 16th, the landlord conditioned the tenants' move on requiring them to sign a six-month lease setting forth the rent as $1,020. The lease provided for a "discount" of $150 per month if tenants paid the rent prior to the 1st day of each month, a late fee of $20.00 per day and other provisions which the court found to be draconian penalties rather than reasonable items of liquidated damages. The tenants had already terminated the lease where they had been living and reluctantly signed the onerous lease after unsuccessfully trying to negotiate to have these unconscionable provisions stricken. On March 31st the tenant notified the landlord they were vacating the premises on May 1st and they requested to apply their security deposit to April's rent. The tenants surrendered on May 1st and left the key with other tenants because they could not find the landlord. The court concluded that the circumstances surrounding the signing of the lease were coercive and invalidated the unconscionable lease clauses. The court however did not invalidate the entire lease and held the tenants liable for May's rent. The court further found no evidence to support the tenants' argument that they vacated the apartment early because inhabitable conditions forced them to. The court also rejected landlord's argument that it sustained damages after the tenants vacated.

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Case Caption:

Belnord Realty Assoc. v. Danzig

Issues/Legal Principles:

Landlord's holdover proceeding dismissed as violative of public policy where the proceeding was commenced after tenant filed a DHCR appeal challenging the deregulation of tenant's rent stabilized apartment because the appeal automatically stayed all action, including the commencement of any proceedings against the tenant.

Keywords:

luxury deregulation; automatic stay

Court:

Civil Court, New York County

Judge:

Hon. Ling-Cohan

Date:

July 1, 1998

Citation:

NYLJ, page 26, col 2

Referred Statutes:

RSC 2529.12

Summary:

In 1995 the DHCR deregulated tenant's Rent Stabilized apartment due to tenant's failure to respond to a high income rent deregulation petition brought by the landlord. The DHCR automatically deregulates an apartment if the tenant fails to answer such petition. The tenant, however, did file an appeal with the DHCR (a PAR) to contest the deregulation. As a result of the DHCR deregulation order, the landlord brought a holdover proceeding against the tenant terminating her tenancy, but commenced the proceeding prior to the PAR's determination. If the tenant were to win the PAR, then the holdover proceeding would not be valid because the tenant's rent stabilized status would be reinstated. The parties marked the case off-calendar pending a ruling on the tenant's PAR. When landlord moved to restore the case to the calendar, the tenant cross-moved for dismissal. The court held that at the time the landlord commenced its holdover proceeding, the tenant had already filed a PAR and by doing so, any action on the landlord's part was stayed ("frozen"). The court found that the holdover proceeding was not ripe for judicial controversy, that the landlord started the action prematurely. The court held that it is against public policy for landlord to have commenced the holdover when there was an automatic stay in effect (the PAR) regarding the tenant's regulatory status. The court hinted that sanctions against the landlord might even be appropriate.

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Case Caption:

Crystal Realty Co. v. Ribot

Issues/Legal Principles:

Court finds building is not "old law tenement" which would exempt landlord from obtaining a certificate of occupancy: landlord is not entitled to collect rent where its building lacks a certificate of occupancy.

Keywords:

certificate of occupancy

Court:

Civil Court, New York County

Judge:

Hon. Karen Smith

Date:

July 1, 1998

Citation:

NYLJ, page 27, col 2

Referred Statutes:

Multiple Dwelling Law 301, 302,

Summary:

The building was constructed in 1879 and was a two-family home up to 1916 when it was altered to add stores. Prior to 1929, there was no evidence that the building was occupied as a multiple dwelling (which is defined as three or more residential units). Alterations were subsequently made which added an additional floor per apartment in 1938. The Department of Buildings wrote on one document that a certificate of occupancy should be obtained, but another document is silent as to this. Consequently, no certificate of occupancy was ever applied or granted for this building. The tenant asserted that the owner's failure to apply for or receive a certificate of occupancy precluded the landlord from collecting any rent from the tenant, according to the provisions of the Multiple Dwelling Law (MDL). The landlord argued that the building is an "old law tenement" and therefore is specifically exempt from the MDL from procurement of a certificate of occupancy. The court previously dismissed the petition for lack of a certificate of occupancy. The landlord then brought a second motion and attached three new documents for the court's consideration and had an official from the Department of Buildings testify at a hearing. The court found his testimony did not enlighten the issue of whether or not a certificate of occupancy was required for this building. Further, the official acknowledged that if two new apartments were added in 1938, a certificate of occupancy should have been required, but the official had no explanation for why none was procured. In subsequent testimony, the official attempted to explain that back in 1938 there was a policy that if a building did not have a certificate of occupancy, the Department did not require one, but the official conceded that no such written policy existed, and his source of knowledge of such an alleged policy was simply common knowledge within the Department. The court found his testimony self-serving and not credible. An "old law tenement" had to have been classified as such in Department of Building records prior to April 18, 1929. The documentary evidence show that the building was reaccepted as a "tenement" on February 15, 1930, and not recorded as an "old law tenement" until March 15, 1938. Therefore, the building is not exempt from obtaining a certificate of occupancy. Absent a certificate of occupancy, the landlord is not entitled to collect rent from tenants residing in a multiple dwelling. (The building was classified as a multiple dwelling in 1930).

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Case Caption:

23 Jones Street Associates v. Keebler-Beretta

Issues/Legal Principles:

Mistrial declared in succession rights trial where jury was impermissibly influenced by an attorney juror whose legal analysis to his fellow jurors was improper and incorrect law which prejudiced landlord's case.

Keywords:

jury verdicts; succession rights

Court:

Civil Court, New York County

Judge:

Hon. Kornreich

Date:

July 1, 1998

Citation:

NYLJ, page 26, col 5

Referred Statutes:

CPLR 4404(a); Federal Rules of Evidence 606(b)

Summary:

Landlord brought a holdover proceeding against the wife of the deceased rent controlled tenant whose rent is $56.60 per month. The wife asserted that she married in 1992 and resided with her husband until his death in 1995. The succession rights case was held before a jury trial who found for the wife by a preponderance of evidence. The landlord asked the court to set aside the verdict on grounds of juror misconduct, to wit: an attorney who sat on the jury improperly and wrongly informed the panel that as a legal principle there is a presumption that spouses share a common residence and that the burden therefore was upon the landlord to prove otherwise, and if the jury could not decide the issue, the jury should rule in favor of the tenant. In fact, a remaining family member seeking succession rights generally has the burden of proof to prove their case. The court set the matter down for a hearing on the attorney juror misconduct allegations. The court stated that if in fact the attorney instructed the jurors on the law, such instruction would be an impermissible "outside influence." Then the question becomes whether such intrusion affected the jury's deliberations and verdict. After the court heard testimony from several of the jurors, the court determined that indeed the attorney had impermissibly counseled at least four jurors on the law and that his words decisively affected the verdict because the panel changed their ruling from a verdict for the landlord to a verdict for the tenant based on the attorney juror's words. The court declared a mistrial and set aside the verdict due to the prejudice the attorney juror's conduct caused to the landlord.

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Case Caption:

2728 Broadway Tenants Association v. Boylan

Issues/Legal Principles:

Former Tenant's Association president had no authority to give his brother a lease according to the rules of the Tenant Interim Lease (TIL) program.

Keywords:

TIL leases

Court:

Civil Court, New York County

Judge:

Hon. Renwick

Date:

July 1, 1998

Citation:

NYLJ, page 26, col 3

Referred Statutes:

General Obligations Law 5-703(2)

Summary:

In 1996 the building became part of the Tenant Interim Lease (TIL) program. TIL buildings occur when properties acquired in rem by the City are transferred to the tenant residents and then turned into low income co-ops. The City retains ownership as net lessor and gives a designated group a TIL lease. The Tenants Association brought a holdover proceeding against Boylan to evict him. Boylan claimed to have a lease from the prior president of the Tenants Association, but the prior president was his brother. The TIL rules prohibit anyone sitting on the Tenant Selection Committee from voting on whether to accept the applicant's tenancy. Further, the TIL rules provide only for month-to-month leases, and not two-year leases as Boylan was given. Boylan argued that at the time he was given a lease by his brother, the building was not in the TIL program and so the TIL rules do not apply. The court rejected this argument and found that by the time he was offered a lease the building had been officially operating under a TIL lease. The court directed judgment for the Tenants Association for the eviction of Boylan.

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Case Caption:

Second 82nd Corp. v. Hahn & Stoumen

Issues/Legal Principles:

Tenants proves right to succeed to her grandmother's lease.

Keywords:

subletting; succession rights; attorney's fees

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Jerald R. Klein

Date:

July 2, 1998

Citation:

NYLJ, page 32, col 1

Referred Statutes:

RSC 2523.5(b)(1); RPL 234

Summary:

Landlord brought a holdover proceeding on grounds of unlawful sublet and the occupant claimed that she was entitled to her deceased grandmother's Rent Stabilized lease as a remaining family member. Her trial evidence supported her position, including the fact that before she was served a notice to cure she had surrendered her prior apartment. The Appellate Term sent it back to the lower court on the issue of her entitlement to attorney's fees based on a recent case (245 Realty Assoc. v. Sussis, June 1, 1998) which permitted Rent Stabilized succession rights tenants to recover attorney's fees.

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Case Caption:

Nestor v. Britt

Issues/Legal Principles:

Tenant entitled to attorney's fees in owner occupancy proceeding, but the court reduced the fees award by about half.

Keywords:

attorney's fees; owner occupancy

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Howard Malatzky

Date:

July 2, 1998

Citation:

NYLJ, page 32, col 2

Referred Statutes:

RPL 234

Summary:

This case involved two protracted owner occupancy proceedings that were ultimately resolved in the tenant's favor. The tenant was awarded attorney's fees of $425,000, but the Appellate Term reversed this sum to $265,000 because the legal issues were not that complex and the facts involved in both cases were similar. The landlord had won fees in the first case based on a renewal lease clause containing an attorneys fees provision. Now the landlord argued that the tenant should not be entitled to fees because the original 1970 lease lacked an attorney's fees clause. The court held that the landlord cannot change her legal position when she prevailed simply because the facts now do not prevail in her favor.

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Case Caption:

Bernard v. Leon Scharf

Issues/Legal Principles:

Landlord is not required to restore building damaged by fire where the costs of restoration exceed the value of the building as such an order amounts to an unconstitutional taking.

Keywords:

restoration of damaged buildings; economic feasibility

Court:

Appellate Division, First Department

Judge:

lower court: Hon. Peter Wendt

Date:

July 2, 1998

Citation:

NYLJ, page 25, col 3

Referred Statutes:

9 NYCRR 2104.9(b); 2204.9(a)(2) and 2524.5(a)(1)(ii)

Summary:

The tenants' building was destroyed by fire on February 7, 1994. Of the 61 apartments, 13 were totally destroyed, while the others sustained various types of damage. At that time 18 apartments had been purchased by resident shareholders, 26 were rent stabilized and the remaining 17 were market rent apartments. The landlord, as holder of the unsold shares owned the majority of the co-op shares. The co-op plan required $3 million insurance coverage, but in 1991 the landlord had reduced the coverage to $2 million. After the fire the landlord took no steps to repair the building, alleging that he was not responsible for the fire, nor did he comply with a Department of Buildings vacate order. The tenants brought an action against the landlord, among others, seeking to compel all of them to restore the building to a habitable condition. The landlord opposed the tenants' action on grounds of economic infeasibility, alleging that the cost of repair would be greater than the market value of the restored building. The costs of the repair would be about $4.5 million, making the value of the restored building about $1-2 million. The lower court held that public policy would be violated if a landlord could simply abandon a building once the cost of repair exceeded some percentage of the building's value to him. The lower court held that the appropriate comparison was not between restoration and inaction, but between the cost of restoring the building on the one hand and the cost of demolishing the building, relocating the rent regulated tenants and satisfying any liabilities of the tenant shareholders. The calculation should also take into account any income that the restored building could generate. Under this standard the landlord did not show that restoration was economically infeasible. The lower court also held that the landlords' failure to maintain appropriate insurance prevented them from asserting the equitable defense of economic infeasibility. Having created their own economic hardship, they should not benefit from their inability to afford repairs. The landlord appealed and the Appellate Term affirmed the trial judge's decision with one dissent. The Appellate Division reversed. Firstly, they held that the deficient insurance coverage should not preclude the economic infeasibility defense because at issue is the economic condition of the building, not that of the owners. The Court noted that the tenants' rent regulatory status has no bearing on whether the building's owner can be compelled into an investment with a negative rate of return. The Court noted that the tenants could still sue the owner for their losses, and maybe it would be cheaper for the landlord to restore the building in light of such lawsuits. However, the Court made it clear that the option to restore the building was one for the landlord to choose, and not be compelled to do by court order. The Court also held that the proper method of valuation was to compare the cost of repairing the building to the anticipated market value of the restored structure, rather than comparing it to the cost of not repairing the building. The Appellate Division held that to compel the owner to restore the building amounted to an unconstitutional taking of the United States Fifth Amendment. An order requiring the owner to spend over $4 million to create a $1- 2 million building of value denies the owner any reasonable return on his investment. The Court held that "the government may not compel a small class of people to pay for public benefits whose costs should be shared by the public as a whole."

Notes

The reversal of the lower courts' decisions compelling the landlord to repair tenants' fire damaged apartments demonstrates that private property prevails over human rights. Housing is a human right. If this owner sought to profit from the housing business, he should be prepared to take losses when his business fails regardless of whether the failure was not his fault.