Housing Court Decisions July 1999

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Case Caption:

Mosholu Preservation Corporation v. Fisher

Issues/Legal Principles:

Tenant, who was evicted on grounds of nuisance, is not entitled to a post-judgment opportunity to cure.

Keywords:

nuisance; offensive odors

Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Sheldon Halprin

Date:

July 27, 1999

Citation:

NYLJ, page 26, col 1

Referred Statutes:

RSC Section 2524.3(b); RPAPL Section 753(4)

Summary:

Landlord brought a holdover proceeding against tenant alleging that tenant allowed offensive odors to emanate from her apartment and thereby committed a nuisance, as defined by RSC Section 2524.3(b). After trial, the lower court decided the case in landlord's favor, and the lower court's decision was upheld on appeal. The appellate court said that the trial court properly credited the testimony of landlord's witnesses (the building's employees and residents) as opposed to tenants' witnesses, who did not even reside in the premises. Furthermore, since the holdover proceeding was based upon nuisance, the tenant was not entitled to a post-judgment opportunity to cure.

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Case Caption:

Mosholu Preservation Corporation v. Fisher

Issues/Legal Principles:

A party may recover attorney's fees based upon an expired rent stabilized lease, since a stabilized tenancy must continue on the same terms and conditions as the expired lease.

Keywords:

attorney's fees

Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Sheldon Halprin

Date:

July 27, 1999

Citation:

NYLJ, page 26, col 2

Referred Statutes:

none cited

Summary:

This appeal involves the same parties as the appeal reported above. The appellate term found that the tenant stated no legal basis for reopening the trial or setting aside the final judgment of possession. The appellate court also held that landlord was entitled to recover its reasonable attorney's fees, since landlord was the prevailing party. Although the attorney's fees clause was part of an expired rent-stabilized lease, it is still valid and controlling because a stabilized tenancy must always continue on the same terms and conditions.

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Case Caption:

Taub v. Thomas

Issues/Legal Principles:

Use and occupancy may only be awarded to landlord from the date the holdover proceeding was commenced, not before.

Keywords:

nonprimary residence; nursing home

Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Howard Malatzky

Date:

July 27, 1999

Citation:

NYLJ, page 26, col 2

Referred Statutes:

RPAPL Section 749(3)

Summary:

The trial court determined that the elderly tenant no longer used the apartment as his primary residence, having taken up residence in a nursing facility, without demonstrating the intent or the ability to return to the apartment. The trial court awarded use and occupancy to the landlord. The appellate term affirmed but lowered the amount of use and occupancy awarded to tenant, finding that use and occupancy may only be awarded from the time the holdover (eviction) proceeding was commenced. The appellate court also determined that the elderly tenant's son has no standing to litigate on his father's behalf. The son also has no succession rights claim, since he did not commence occupancy until on or about the time the tenant was hospitalized.

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Case Caption:

Heights Realty Associates v. Smith

Issues/Legal Principles:

Holdover proceeding is dismissed where landlord accepts and retains rent check after tenancy has been terminated but before holdover proceeding has been commenced.

Keywords:

vitiation of termination notice; acceptance of rent

Court:

Housing Court, New York County

Judge:

Hon. Judge Billings

Date:

July 28, 1999

Citation:

NYLJ, page 23, col 6

Referred Statutes:

CPLR Section 3211

Summary:

Landlord served tenant with a notice of termination of tenancy, which terminated the tenancy effective November 30, 1998. Landlord commenced the holdover proceeding on December 10, 1998. The court referred to the period from November 30, 1998 to December 10, 1998 as "the window period." Landlord received a rent check from the tenant during the window period, and retained the rent check without cashing it. Tenant moved to dismiss because landlord accepted rent during the window period. The court granted tenant's motion, finding that landlord may no longer bring a holdover proceeding against tenant on the same basis. The landlord's notice of termination of the tenancy must be unequivocal. By accepting rent, the landlord rendered the notice of termination equivocal. (On the one hand, the notice informed the tenant that the tenancy was over, but on the other hand, the tenant paid and the landlord accepted rent, thereby affirming the existence of a landlord-tenant relationship). The landlord offered no evidence to indicate landlord's intent to preserve the right to terminate the tenancy despite its acceptance of rent. the court explained that many courts decide to dismiss holdover proceedings, where rent was tendered and accepted during the window period, employing the legal principles of "waiver" (e.g., the landlord waived its rights by accepting the rent) or "estoppel" (e.g., the landlord should be estopped from terminating the tenancy because tenant relied, to tenant's detriment, upon landlord's affirmance of the landlord-tenant relationship). The court ultimately decided that neither of these theories applies. A tenant must receive an unequivocal notice of termination. When a landlord accepts rent during the window period, the landlord's acceptance of rent renders the notice of termination equivocal. A holdover proceeding cannot be based upon an equivocal predicate notice.

Notes:

Compare Judge Billings' decision in this case with the July 8, 1999 decision of the Appellate Term, First Department in Gottlieb v. Scaringi. (See decisions for week of July 5, 1999). Judge Malatsky (the lower court judge in Gottlieb v. Scaringi) refused to grant the tenant's motion to dismiss based upon landlord's acceptance of rent during the window period (the period after tenant was served with the termination notice but before the holdover proceeding is commenced). Judge Malatsky determined that a hearing must be held to determine whether the landlord waived his rights by accepting the check; the appellate term affirmed. In contrast, Judge Billings decided that the issues of waiver and estoppel are not relevant. The tenant's motion to dismiss must be granted because the landlord's acceptance and retention of tenant's rent check rendered the termination notice equivocal, and the tenant must receive an unequivocal notice as a predicate to a holdover proceeding. Let's hope that Judge Billings' reasoning ultimately prevails in the appellate courts.

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Case Caption:

Matter of Schutt v. DHCR

Issues/Legal Principles:

The four-year statute of limitations set forth in the RRRA of 1997 applies to fair market rent appeals as well as to overcharge complaints.

Keywords:

rent overcharge

Court:

Supreme Court, New York County

Judge:

Hon. Justice Allen

Date:

July 28, 1999

Citation:

NYLJ, page 23, col 1

Referred Statutes:

RSL Sections 26-513, 516 and 517

Summary:

Prior to the passage of the RRRA of 1997, tenants filed an overcharge complaint with the DHCR. The rent stabilization law and code requires landlords to register the initial legal regulated rent with the DHCR (that is, the rent in effect as of 1984) and to serve a copy of the registration form (called the "RR-1") upon the tenant. The tenant then has ninety (90) days to challenge the RR-1, which is called a fair market rent appeal ("FMRA"). If landlord never filed or served the RR-1 upon the tenant, retaining proof of service, then the 90-day statute of limitations never runs, and a tenant may file a fair market rent appeal at any time. In this case, the landlord did not file registration statements for the year 1984 and serve a copy of same upon the tenant, and therefore the DHCR's rent administrator converted the tenant's overcharge complaint to a fair market rent appeal ("FMRA"). The District Rent Administrator therefore found that the fair market rent as of October 1, 1990 was $241.22, rather than $1,404.07, the amount specified in the lease.

The District Rent Administrator made its determination in December 1996; the landlord filed a Petition for Administrative Review ("PAR") in January 1997. In June 1997, while the landlord's PAR was pending, the RRRA of 1997 was passed. The RRRA of 1997 specifically stated that it applies to all pending rent overcharge cases. It amended RSL Sections 26-516(a) to state as follows: "Where the amount of rent set forth in the annual rent registration statement filed four years prior to the most recent registration statement is not challenged within four years of its filing, neither such rent nor service of any registration shall be subject to challenge at any time thereafter." In reliance upon the amended statute, the Deputy Commissioner granted the landlord's PAR. The Deputy Commissioner determined that the overcharge complaint should not have been converted to a fair market rent appeal. Since the tenant filed its overcharge complaint in December 1992, the rent must be established in accordance with the rent registered in 1988 (four years earlier). Since all rent increases from 1988 until 1992 (and forward) were legal, the Deputy Commissioner found that there was no overcharge.

The tenant filed an Article 78 proceeding to challenge the PAR. The Supreme Court upheld the PAR determination, determining that the RRRA of 1997 also applies to fair market rent appeals. RSL Section 26-516(a)(i) does not provide any exceptions for fair market rent appeals; its four-year limitation provisions apply even where the landlord has never filed an initial registration statement. In particular, the court stated that it is not arbitrary and capricious for the DHCR to change the way it has applied the law for fourteen years, in order to comply with the RRRA of 1997.

Notes:

This decision effectively eviscerates the rent registration system. The purose of an initial registration is to set a legal rent. The first rent stabilized rent becomes legal when the landlord serves notice upon tenant of the initial rent (in a form called an RR-1) and tenant does not challenge the rent within 90 days, OR, the tenant does challenge the initial rent within 90 days via a Fair Market Rent Appeal and the DHCR determines and sets the legal rent. Unless and until the RR-1 is served, the initial legal rent is NEVER set by the DHCR. This decision provides zero incentives for landlords to register the initial rent. This decision makes a mockery of the statutes requiring initial registration.

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Case Caption:

2307 Clarendon Corp. v. Barnett

Issues/Legal Principles:

Court found rent overcharge on the basis of landlord's failure to present adequate proof of the expenditures which may have entitled him to a 1/40th rent increase, but refused to impose treble damages in the belief that the landlord actually performed the work.

Keywords:

rent overcharge; 1/40th increase

Court:

Housing Part of the Civil Court, Kings County

Judge:

Hon. D. Thomas

Date:

July 28, 1999

Citation:

NYLJ, page 25, col 5

Referred Statutes:

RSC Section 2522.4; DHCR Policy Statement 90-10

Summary:

Landlord brought a nonpayment proceeding against tenant. Tenant ultimately answered claiming that the rent demanded is an overcharge and that the landlord breached the warranty of habitability entitling the tenant to an abatement of rent. After trial, the court determined that the tenant was entitled to a fifteen (15%) percent abatement for the following conditions which existed, uncorrected, for about one year: mildewed walls and ceiling in bathroom, ceramic wall tiles in bathroom require replacement, rotted wood window molding, repair and plaster bathroom walls, peeling paint around window and door moldings throughout apartment, door molding in north room loose, inoperable smoke detector, broken and defective tiles in the kitchen, broken or loose connection in the kitchen wasteline, repair walls and ceiling north room, mice, paint walls and ceilings of north room, refit doors and window sashes in kitchen. A DHPD inspection report, tenant's testimony and photographs proved these conditions. In defense to tenant's claim of rent overcharge, the landlord presented some proof that it had made improvements to the premises while the apartment was vacant and before the tenant moved into the apartment, thereby entitling landlord to a rent increase in the amount of $144.13, which the landlord alleged was 1/40th of the total cost of the improvements. The Court denied the 1/40th increase to landlord, finding weaknesses in the landlord's documentary evidence. The landlord's bills did not itemize labor costs or itemize the costs of each of the materials separately. Therefore, the court reduced the rent by $144.33. However, the court refused to grant treble damages for the overcharge, finding that the overcharge was not willful. The landlord did improve the apartment but simply did not keep adequate proof of the work. The Court issued a final judgment for the landlord (amount reduced by the overcharge and the 15% abatement), issuance of a warrant and a five-day stay of the execution of the warrant.

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Case Caption:

Maggie v. Crum

Issues/Legal Principles:

In a summary proceeding, the Court will look to the deed for proof of ownership and the lease for proof of a landlord-tenant relationship and will not look behind these documents for additional information.

Keywords:

nonpayment proceeding

Court:

Housing Part of the Civil Court, Kings County

Judge:

Hon. Judge Finkelstein

Date:

July 28, 1999

Citation:

NYLJ, page 26, col 3

Referred Statutes:

CPLR Section 2221 and 5015(a)(2); MDL Section 302; GOB Section 5-703(2)

Summary:

Landlord brought a nonpayment proceeding against tenant, for failure to pay a monthly rent of $6,000.00 plus real estate taxes for the subject premises (an unregulated Brooklyn Heights brownstone), in accordance with the lease agreement entered into between the parties. The parties then entered into a court-ordered stipulation whereby respondent agreed to pay arrears. On several occasions, respondent moved to vacate the court-ordered stipulation and new court-ordered stipulations were entered into. Now, the respondent has made yet another motion to vacate the most recent court order, judgment and stipulation but the petitioner has refused to negotiate. The court denied the respondent's motion, finding that it did not meet the requirements of a motion to renew or reargue [CPLR Section 2221] or a motion to vacate a judgment on the basis of newly-discovered evidence [CPLR Section 5015(a)(2)]. The Court stayed execution of the warrant until a date certain, in order to give respondents one final opportunity to pay rent arrears in the amount of $187,061.10. The court noted that the landlord and the tenant are financially intertwined in a manner that goes beyond the lease agreement. Respondent used to own the premises until 1997, the bank was about to foreclose, petitioners came to the rescue and purchased the premises from respondent, and the parties entered into a lease with tenant, which granted tenant an option to purchase as long as its rental payments are up to date (which they are not). The Court refused to take the unique relationship between this landlord and tenant into consideration, citing cases which state that it is improper for the Court to look behind the Deed and the lease in a summary proceeding.

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Case Caption:

Gordon v. Nieves

Issues/Legal Principles:

Landlord is sanctioned for including an attorney's name on his petition, without the attorney's consent.

Keywords:

frivolous conduct; sanctions

Court:

Housing Part of the Civil Court, Kings County

Judge:

Hon. Judge Callender

Date:

July 28, 1999

Citation:

NYLJ, page 26, col 1

Referred Statutes:

22 NYCRR 130-1.1[c]

Summary:

Landlord Nicholas Gordon brought a nonpayment proceeding against his tenant. Since Gordon was not an attorney, Gordon's court papers were replete with errors. For example, although he attached a copy of the rent demand to the petition he failed to attach an affidavit of service of the rent demand. On the back of the petition, Gordon indicated that Martin Tenenbaum is his attorney. When Tenenbaum found out about this, he asked Gordon to withdraw the petition, but Gordon refused to do so. Tenenbaum then made a motion before the court, asking that the petition be withdrawn and that sanctions be imposed upon Gordon. The Court conducted a hearing and heard the testimony of both Gordon and Tenenbaum. The court decided that Gordon's testimony was replete with contradictions and not credible. The court found Tenenbaum credible. The Court found that Gordon had placed Tenenbaum's name on the petition knowing that he did not have Tenenbaum's permission to do so. He did it anyway because he wanted the court and the tenants to believe that he had an attorney representing him. Tenenbaum asked Gordon to withdraw the petition voluntary, but Gordon refused, asking Tenenbaum to withdraw from the case and allow another attorney to be substituted. When Tenenbaum refused, Gordon threatened to report him to the disciplinary committee and eventually filed a complaint with the committee against Tenenbaum. Since Gordon made a false representation to the Court on an important issue (attorney representation), the Court decided that he did engage in frivolous conduct and imposed sanctions of $2,000.00 to be deposited with the Clerk of the Court. The Court also stated that it would hold a hearing to determine the amount of attorney's fees and costs that Gordon must pay to Tenenbaum, if Tenenbaum chose to bring a motion seeking such relief.

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Case Caption:

Riverside Syndicate, Inc. v. Grubb

Issues/Legal Principles:

Wife, who was not named as a tenant on deceased husband's lease, has the burden of proving that she was primarily residing at the apartment for the period immediately prior to the tenant's death.

Keywords:

succession rights; summary judgment

Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Marilyn Shafer

Date:

July 30, 1999

Citation:

NYLJ, page 22, col 3

Referred Statutes:

RSC Section 2523.5(b)(1)

Summary:

After tenant-husband died, landlord brought a holdover proceeding against the wife who remained in the apartment although she was not named as a tenant in the lease. Wife brought a motion for summary dismissal of the holdover petition. (Such a motion asks the court to make a decision without conducting a trial to adduce the facts). The lower court dismissed the wife's motion and the appellate term upheld this decision. The wife must prove her succession rights at a trial. It is her burden to prove that she primarily resided with her husband in the apartment during the period immediately preceding the husband's death, or that her deceased husband tendered a lease to landlord including wife's name prior to his death. (Although the decision does not specify the period in question, the period is two years prior to the husband's death or only one year if the wife is elderly).

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Case Caption:

Lee v. 514 West 50th Street Tenants Association

Issues/Legal Principles:

Tenant, whose application for a Section 8 rent subsidy was denied by DHPD, should have exhausted his administrative remedies at DHPD and then brought an Article 78 proceeding in the Supreme Court to challenge DHPD's denial.

Keywords:

Section 8 rent subsidy

Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Karen Smith

Date:

July 30, 1999

Citation:

NYLJ, page 22, col 5

Referred Statutes:

CPLR Article 78

Summary:

Plaintiff-tenant brought a plenary ("civil court") action against his tenants' association. He alleged that he was denied a Section 8 subsidy because the tenants' association did not provide DHPD with certain information. During the court proceeding below, it became apparent that plaintiff-tenant lost his Section 8 subsidy for fraudulently misrepresenting his family composition. The lower court dismissed the action against the tenants' association and the appellate court agreed. The appellate court further stated that the tenant should have fully pursued his case at the DHPD (that is, he should have "exhausted his administrative remedies") and then, if DHPD ultimately decided the case against him, he should have commenced an Article 78 proceeding in the Supreme Court to challenge DHPD's decision.

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Case Caption:

Renik Realty Holdings v. Thompson

Issues/Legal Principles:

Trial court should have granted the tenant's motion to restore the case to the calendar and should have held a hearing to determine whether or not landlord made repairs in accordance with the stipulation of settlement.

Keywords:

motion to restore case to calendar; sanctions

Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Arlene Hahn

Date:

July 30, 1999

Citation:

NYLJ, page 22, col 4

Referred Statutes:

22 NYCRR Section 130-1.1[c][1]

Summary:

Tenant brought a motion to restore the case to the calendar because landlord failed to perform certain repairs in accordance with the parties' prior stipulation of settlement. (Although the court's opinion does not specifically say so, it appears that the parties entered into a stipulation of settlement, most probably in connection with a nonpayment proceeding, wherein the landlord agreed to make certain repairs by certain dates). The lower court judge denied the tenant's motion and imposed sanctions on the tenant for making a motion that was completely without merit. The appellate court disagreed, vacated the sanctions award, and remanded the proceeding to the trial court for a hearing.

Case Caption:

518 West 134th Street Tenants' Association v. Calderon

Issues/Legal Principles:

Family members of tenants pursuant to DHPD's Tenant Interim Lease ("TIL") program are not entitled to succession rights.

Keywords

succession rights

Court:

Appellate Term, First Department

Judge:

lower court judge: Walter B. Strauss

Date:

July 20, 1999

Citation:

NYLJ, page 26, col 1

Referred Statutes:

28 RCNY Sections 21-21 et seq and 24-01 et seq

Summary:

Landlord brought a holdover proceeding against son of tenant who occupied the apartment pursuant to a New York City Department and Housing Preservation and Development ("DHPD") program called the Tenant Interim Lease Program ("TIL"). Son claimed succession rights to the apartment, pursuant to the rent stabilization law and code. The trial court made a determination in tenant's favor. The appellate term reversed and issued a final judgement of possession to the landlord. The appellate court explained that TIL apartments are exempt from the rent stabilization law and code. TIL regulations do not include a succession rights provision. Furthermore, the mother never listed the son as an authorized occupant pursuant to TIL program regulations.

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Case Caption:

248 Sherman Avenue Corp. v. Coughlin

Issues/Legal Principles:

A court may vacate an executed eviction warrant and restore tenant to possession under appropriate circumstances.

Keywords:

post-eviction restoration to possession

Court:

Appellate Term, First Department

Judge:

Hon. Faviola Soto

Date:

July 20, 1999

Citation:

NYLJ, page 26, col 3

Referred Statutes:

none cited

Summary:

The trial court evicted a rent-controlled tenant of 50 years for failure to make payments as per a stipulation settling a nonpayment proceeding. The tenant immediately moved for restoration to the apartment and for a stay of re-letting the apartment. The trial court denied the motion. The appellate term reversed and granted the motion. Citing to other relevant cases, the trial court explained that a court may vacate an eviction warrant after the warrant has been executed, and restore tenant to possession under appropriate circumstances. In such cases, the court considers factors such as the duration of the controlled tenancy, the amount of the default, whether tenant applied for relief promptly and whether tenant has secured the funds owing to landlord. The appellate court found that this was an appropriate case for restoration. The tenant had lived in the rent-controlled premises and tenant's current rent is $183.70. Tenant was evicted for failure to timely pay $636.91, a relatively small amount. Tenant applied for relief immediately. Finally, tenant had secured funds to pay landlord from public assistance.

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Case Caption:

City of New York v. Whitehurst

Issues/Legal Principles:

Predicate notice that fails to properly identify the apartment results in dismissal of the holdover petition.

Keywords:

predicate notice; squatter proceedings

Court:

Housing Part of the Civil Court, Kings County

Judge:

Hon. Ava Alterman

Date:

July 21, 1999

Citation:

NYLJ, page 25, col 2

Referred Statutes:

CPLR Section 3212; EDPL Section 405; RPAPL Sections 601, 713(3), 735 and 228.

Summary:

The City of New York became the owner of a building in 1987 as a result of a condemnation proceeding. In 1989, Whitehurst and Utsey entered into possession of the subject premises. The entered into possession without the City's consent and are therefore "squatters." The City commenced squatter proceedings, pursuant to RPAPL Section 713(3), in August 1997, by serving a ten-day notice to quit upon Whitehurst and Utsey. The City moved for summary judgment (judgment without a trial) in its favor; tenants cross-moved for summary judgment in their favor. The Court, rejecting several arguments advanced by tenants, granted summary judgment against tenant Utsey. Tenants argued that they should have received a thirty-day (rather than a ten-day) notice because their squatter status "ripened" into a tenancy-at-sufferance. The Court rejected this argument, finding that a tenancy-at-sufferance arises only when a landlord allows a tenant to remain after serving a notice of termination of tenancy. The Court found that laches and estoppel are not applicable to agencies of the state acting in their governmental capacity. There is an exception to this rule - laches and/or estoppel may apply if the city acted wrongfully or negligently in failing to commence the proceeding sooner. The Court rejected this argument. Furthermore, although the tenants allege that they expended substantial sums to repair and maintain the building, they failed to present these facts, in detail, in response to the City's motion for summary judgment. However, the Court granted "summary judgment" to Whitehurst, dismissing the petition against him, without prejudice to the recommencement of the petition upon proper papers. The City made a mistake in the papers it served upon Whitehurst. The ten-day notice (predicate notice) served upon tenant Whitehurst failed to properly identify her apartment. A predicate notice is not a pleading and cannot be amended. For this reason, the petition was dismissed because it is based upon a defective predicate notice.

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Case Caption:

Amalgamated Warbasse Houses v. Aldridge

Issues/Legal Principles:

Court will not issue a judgment of possession to landlord on the grounds of illegal subletting, where the alleged subtenant has vacated, thereby curing the illegal sublet.

Keywords:

illegal sublet; nonprimary residence; Mitchell Lama co-op

Court:

Housing Part of the Civil Court, Kings County

Judge:

Hon. Judge Finkelstein

Date:

July 21, 1999

Citation:

NYLJ, page 25, col 2

Referred Statutes:

RPAPL Section 753(4)

Summary:

Petitioner brought a summary proceeding against Aldridge, the tenant-shareholder of a Mitchell Lama cooperative apartment, alleging illegal sublet and non-primary residency. After various motions were decided by the resolution part, the case was referred to a trial part. Prior to the commencement of trial, respondent Aldridge (appearing pro se) and his "spiritual advisor" made various nonsensical arguments. When the judge finally instructed the landlord's attorney to call his first witness, the respondent and his spiritual advisor left the courtroom, calling the judge "homey," and threatening to file a federal complaint against the judge. The proceeding continued as an inquest (a trial where only the landlord is present). Although the landlord proved facts which indicated an illegal sublet to Probhers, the court would not issue a judgment to landlord on this basis, because the illegal sublet had been cured: Probhers had already vacated the premises pursuant to a stipulation of settlement signed by all parties. The Court issued a judgment of possession for landlord on nonprimary residency grounds, based upon proof consisting of a 1995 Deed to Aldridge for a house in Laurelton, Queens, phone records and other evidence. Pursuant to the rent stabilization law, a nonprimary residency cannot be cured. However, this is a Mitchell Lama co-op (rather than a rent-stabilized apartment) and the occupancy agreement provides for a post-judgment cure period. Therefore, the court granted tenant a ten-day stay pursuant to RPAPL Section 753(4), during which Aldridge may recommence primary residency and thereby cure the breach of the occupancy agreement.

Notes:

There is no doubt that Aldridge illegally sublet the premises and did not primarily reside there. The end result was certainly correct, but the ends do not justify the means. However, having read the trial court's decision, it appears that the tenant (and his non-attorney advisor) were "nuts." In other words, Aldridge was not competent and capable of representing himself. Under these circumstances, the court should have considered ordering the landlord's attorney to contact the Department of Social Services ("DSS") with the suggestion that DSS consider the appointment of a guardian-ad-litem for Aldridge.

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Case Caption:

Bronx Park South 1 Associates v. Asceneth

Issues/Legal Principles:

If landlord's on-site employees know that tenant is keeping a pet, this knowledge is attributable to the landlord.

Keywords:

pet holdover

Court:

Housing Part of the Civil Court, Bronx County

Judge:

Hon. Judge Heymann

Date:

July 21, 1999

Citation:

NYLJ, page 23, col 2

Referred Statutes:

NYC Administrative Code Section 27-2009.1(b)

Summary:

Landlord commenced a holdover proceeding against tenant of Housing and Urban Development ("HUD") apartment for harboring a dog in violation of a "no pet" clause in her lease. City law requires landlords to commence a holdover proceeding against tenants who harbor pets within three months after first obtaining knowledge of the presence of the pet in the apartment. If landlord does not timely commence a holdover proceeding, landlord's objection to the pet is deemed waived. The tenant admitted she was keeping a large dog in her apartment. A trial was conducted on the issue of whether landlord commenced the proceeding within the requisite three months. Tenant testified that Santos (the building's porter) saw tenant walking the dog two or three times per day since 1997, when landlord first employed Santos. Tenant argued that Santos' knowledge was attributable to the landlord. Landlord's only witness was landlord's property manager, who testified that she did not see the dog during her 1997 and 1998 yearly inspections of the apartment. She testified that she first learned about the dog from its maintenance manager (Gentile) and commenced the proceeding within three months of Gentile's report. The Court held that there was a "gaping hole" in landlord's case, which is the landlord's failure to introduce Santos' testimony about what he knew and when he knew it. The Court therefore dismissed the holdover proceeding and made a finding for tenant, despite the fact that tenant was, in some respects, untruthful in her testimony. The landlord argued that the city law requires landlords to bring a holdover proceeding only after it obtains actual knowledge that the tenant is harboring a dog. The court held that the standard is constructive knowledge, that is, whether the landlord exercising due diligence knew or should have known about the dog. The court also held that if the landlord's on-site employees (such as Santos) know about the dog, their knowledge is attributable to the landlord.

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Case Caption:

Smith v. Maya

Issues/Legal Principles:

Unrepresented tenant waived the right to allege lack of personal jurisdiction by appearing in court on the first court date without raising this defense.

Keywords:

personal jurisdiction; improper service; waiver

Court:

Appellate Term, Second Department

Judge:

lower court judge: Hon. Ava Alterman

Date:

July 23, 1999

Citation:

NYLJ, page 30, col 5

Referred Statutes:

CPLR Sections 3025, 3211 and 5501(a)(1); CCA Section 909; RPAPL Section 732

Summary:

Landlord brought a nonpayment proceeding against tenant, resulting in a judgment of possession for landlord and a money judgement in an amount which reflected a five percent abatement for conditions which violated the warranty of habitability. Tenant appeared pro se on the first court date, having filed an oral answer that did not allege improper service of the notice of petition and petition. One week later, tenant appeared in court represented by a legal services attorney, who filed an amended answer alleging improper service. the trial court held that the tenant waived the defense of improper service (lack of personal jurisdiction) by appearing on the first court date without raising this defense. The appellate court agreed and added that an amended answer in a summary proceeding cannot be served and filed without first requesting the permission of the trial court. The appellate term modified the trial court's judgment to reflect thirty per cent abatement but otherwise affirmed the trial court's order.

Case Caption:

147th Street Corporation v. Mateo

Issues/Legal Principles:

Landlord not entitled to collect rent in excess of the amount in the last expired lease after the tenancy terminated.

Keywords:

month to month tenancy; use and occupancy

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Howard Malatzky

Date:

July 13, 1999

Citation:

NYLJ, page 26, col 2

Referred Statutes:

none cited

Summary:

Landlord brought a proceeding against a month to month tenant, and presumably it was a holdover proceeding where the landlord sought possession of the premises. The lower court awarded landlord rent for the period the tenant stayed beyond the expiration of the lease in an amount that exceeded the last expired lease. (Technically, after termination of the tenancy, rent is called use and occupancy). Perhaps the lower court granted the landlord a market rent. In any event, the Appellate Term reversed the amount of rent awarded to landlord. Since the rental amount of the last lease was not stated in the decision, it is not possible to know the extent of the reduction.

Notes:

When a month to month tenancy (i.e., non-regulated tenancy) expires and the tenant holds over and stays in possession causing the landlord to commence a holdover proceeding, in such circumstances technically the landlord can seek a market rent, particularly where the tenant seeks extended time to find alternative housing. The court may hold a hearing as to what rent is reasonable if the parties cannot come to an agreement on the figure. In this case the Appellate Term thankfully limited the amount of rent due to the amount of rent set forth in the last lease. This is reassuring for tenants who hopefully can rely on this case in determining what monetary liabilities they face when they do not timely vacate. Parenthetically, when a rent control or rent stabilized tenancy is terminated and the landlord ultimately wins, in such circumstances again technically the landlord can seek a market rent. Usually the difference between a regulated rent and a market rent is dramatic, whereas month to month tenants who are unregulated to begin with generally do not face such a huge increase between the rent in their lease and a market rent.

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Case Caption:

Soho Village Realty, Inc. v. Gaffney

Issues/Legal Principles:

Notice of nonrenewal of lease is not vitiated by agent's mistaken inquiry of tenant's intent and tenant's unilateral tender of an alternative renewal lease prepared by tenant.

Keywords:

renewal lease; nonprimary residency

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Ruben Martino

Date:

July 13, 1999

Citation:

NYLJ, page 26, col 3

Referred Statutes:

none cited

Summary:

Landlord served a notice of nonrenewal of tenant's lease on grounds of nonprimary residency. Apparently unaware of this, landlord's agent mistakenly sent a form letter to tenant inquiring as to his intention to renew. Tenant responded to the letter stating he intended to renew the lease. Landlord repudiated his agent's letter and asserted that the nonrenewal notice was still in force. The lower court dismissed the holdover proceeding, presumably holding that the agent's letter vitiated the nonrenewal notice. The Appellate Term reversed, holding that the nonrenewal notice was never waived. Further no renewal lease was ever offered the tenant, and the tenant could not create a binding lease renewal by obtaining a blank renewal lease form and mailing it back to the landlord (which he apparently did in his response to the agent's letter). The landlord refused to sign the renewal lease sent by the tenant and the Appellate Term held that there was no intent on landlord's part to revive the tenancy or supercede the prior notice.

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Case Caption:

Shaikh v. B-U Realty

Issues/Legal Principles:

Landlord may not engage in self-help to prevent roommate from moving in, even if tenant might violate the Roommate Law as a result of the roommate's occupancy.

Keywords:

illegal eviction; self-help; roommates

Court:

Civil Court, New York County

Judge:

Hon. Laurie Lau

Date:

July 14, 1999

Citation:

NYLJ, page 27, col 6

Referred Statutes:

RPL 235-f

Summary:

Tenant's fiance began sleeping at her apartment in December, 1998. In March, he twice attempted to move his belongings into the building. The owner refused to allow him access to the elevator to accomplish the move. The owner apparently became hostile and aggressive during these occasions. The tenant and her fiance then brought an illegal eviction proceeding. The landlord argued that the fiance had no standing to bring the proceeding because he had no rights of occupancy. The court disagreed, holding: "A roommate, or even a guest, who is invited to share a dwelling unit with the prime tenant, cannot be removed without a court order if he or she has been in occupancy for at least 30 days." The landlord further pointed out that the tenant already has two other adults living with her, her brother and his wife. If the fiance moved in, his occupancy would exceed the number of occupants permitted under the Roommate Law. (Where the lease is in one tenant's name, the law allows occupancy by the tenant, tenant's immediate family, and one additional occupant and their minor dependents.) The Court held that the landlord cannot resort to self-help where a breach of the lease is alleged. The landlord must commence an action against the tenant for a lease violation, rather than taking the law into his or her own hands absent a judicial determination. Finally, the landlord argued that the fiance already has access to the apartment, but the Court ridiculed this position, stating that while he was able to sleep in the apartment, he was not able to do so without his belongings. "This is not possession of a quiet use and enjoyment to which a roommate is entitled. This is possession by stealth, a type of action which should not and is not necessary." The Court ordered the landlord to provide the fiance with immediate access to the building and apartment.

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Case Caption:

Cadim Stonehenge LLC v. Gekht

Issues/Legal Principles:

Where tenant's company constructed a greenhouse, but prior landlord paid for it, current landlord may not pursue eviction proceeding against tenant after a violation is placed by the Department of Buildings without first attempting to legalize the structure.

Keywords:

building violation; illegal alteration

Court:

Civil Court, New York County

Judge:

Hon. Maria Milin

Date:

July 14, 1999

Citation:

NYLJ, page 27, col 4

Referred Statutes:

RSC 2524.3(c), 2524.3(e)

Summary:

Tenant moved into the apartment in 1990. In 1998, the Department of Buildings placed a violation on the apartment due to a greenhouse on the terrace. The violation ordered a remedy by obtaining a permit if feasible or remove and restore illegal structure to prior legal use. As a result of the violation, the landlord served a termination notice on the tenant on grounds that the occupancy is illegal due to the greenhouse and on grounds of tenant's unreasonable refusal to provide access to the landlord to cure the violation. Additionally, the landlord wanted the tenant to pay for the costs of removing the greenhouse.

The tenant's daughter used to be the tenant, and she moved into the apartment with her boyfriend who was the brother of the prior owner. The tenant testified that he visited the apartment many times during his daughter's tenancy and at all times the greenhouse was there, and that the prior owner, and even the present owner, acknowledged his right to use the greenhouse in prior court settlements. Further, the tenant asserts that he did not unreasonably refuse the landlord's request for access because the landlord's attorney's letter wanted to removed the entire terrace, not just the greenhouse. Landlord argues that the daughter, not the prior owner, made the repairs and that she was given a "sweetheart lease" with a preferential rent based on her supposed payment of the greenhouse. The landlord denied knowledge of the greenhouse until the violation was served. The landlord also submitted an affidavit from an expert who asserted that the Department of Buildings would not grant a permit for the greenhouse because its construction violated zoning regulations. Tenant's architect opined that the greenhouse could be legalized by reconfiguring the apartment.

The Court concluded that the tenant did not construct the greenhouse, as the landlord initially suggested. Although the tenant performed reconstruction work on the terrace, the invoices reveal that he did not construct a terrace. The Court found that the tenant's construction company performed the labor to construct the greenhouse, but the prior landlord actually paid for the $22,000 by paying the tenant directly and providing a preferential rent. Based on these facts, the court found that the prior owner acquiesced to the greenhouse and paid for its reconstruction, and that a current owner is bound by the acts of the prior owner. Further, the Court held that the landlord must first show that the violation cannot be legalized, and since only the owner can attempt to legalize its property at the Department of Buildings, the owner and not the tenant should undertake this effort before a holdover proceeding may be brought. The Court dismissed the petition.

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Case Caption:

Matter of Campbell v. DHCR

Issues/Legal Principles:

Tenant's succession rights claim to rent controlled apartment is denied for failure and/or refusal to submit sufficient documentation, including his affidavit of primary residence during the relevant two-year period.

Keywords:

succession rights

Court:

Supreme Court, Queens County

Judge:

Hon. Berke

Date:

July 14, 1999

Citation:

NYLJ, page 30, col 2

Referred Statutes:

RSC 2200.2(f)(16), 2204.6(d)

Summary:

Tenant commenced a proceeding at the DHCR to determine his status as a successor tenant to his deceased mother's rent controlled apartment. He claims he began an identical proceeding in 1995 but that the DHCR lost his application. Tenant, his brother and parents moved into the apartment on February 1, 1947. Tenant claims he lived there from the time he was 6 years old until he married in the 1960s. After his divorce he resumed living with his mother in the apartment and resided there with her as his primary residence for at least two years prior to her death. The owner claimed that tenant never resumed occupancy and merely stopped by occasionally to pick up mail and visit his mother. The DHCR requested the tenant to submit additional information, including the death certificate of his mother, documentary evidence of his two-year co-occupancy with her before her death, such as tax returns, W-2 forms, or telephone bills), plus an affidavit from him asserting that it was his primary residence and he had no other residence during the two-year period. The owner claimed that the mother resided in a nursing home for some period of time before her death, that the tenant remarried and resided in Florida where he leased a car with Florida plates and rented a post office box and received no mail at the subject apartment. No documentary proof, however, was submitted to support the owner's allegations. Tenant submitted his mother's death certificate, a federal tax lien against him at the apartment, and a letter from NYNEX. He also had an affidavit and a witnessed letter from two tenants attesting to his residency during the relevant two-year period. The DHCR sent tenant a final notice stating that the evidence was insufficient, and demanded copies of W-2 forms, tax returns, driver's license, voter's registration, and other indicia which would document tenant's claim more substantially, as well as the previously requested affidavit. In response, tenant's attorney submitted tenant's voting records.

DHCR ruled that tenant failed to submit evidence that the apartment was his primary residence at least two years before his mother's death. Tenant sought a reconsideration of the order, but it was denied. Tenant filed an appeal (PAR), but lost. The PAR Commissioner noted that tenant was asked several times to submit an affidavit stating that the apartment was his primary residence for two years prior to his mother's death, but he failed and/or refused to submit such an affidavit. Based on this failure, the Commissioner found that the Rent Administrator ruled correctly. Tenant has now filed an Article 78 in the Supreme Court on grounds that the DHCR rendered an order which was arbitrary and capricious and not supported by substantial evidence. The Supreme Court found that the DHCR order was proper. Most of tenant's submissions were made by his attorney, and the Court found that DHCR was entitled to ask for and receive directly from tenant a sworn statement that the premises were his primary residence during the relevant two-year period, since this is such a basic requirement of a succession rights claim. The Court additionally noted that the extent of tenant's documentation was paltry and failed to cover the relevant two-year period.

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Case Caption:

Ilovik Realty Corp. v. DHCR

Issues/Legal Principles:

Landlord's failure to timely file and serve the 1981 initial apartment registration statement and the failure to provide a complete rental history allows the DHCR to set the first rent and determine any overcharges accruing thereafter, including treble damages.

Keywords:

overcharges; treble damages; apartment registration

Court:

Supreme Court, Queens County

Judge:

Hon. Polizzi

Date:

July 14, 1999

Citation:

NYLJ, page 29, col 3

Referred Statutes:

Administrative Code of City of New York 26-517(e); RSC 2528.4; Rent Regulation Reform Act of 1997

Summary:

Tenant moved into the apartment on June 1, 1983 with a three-year lease at $450.00 per month. She complained to the DHCR that the owner never provided her with an apartment registration form. The prior owner never responded to the complaint. In 1986, the DHCR asked the current owner to submit all leases from May 31, 1986 (the date her lease expired), and proof of the initial registration and service of the RR-1 on tenant. (The RR-1 informs the tenant of the initial rent and provides a 90 period in which to challenge the rent). Since the current owner failed to submit the evidence after several DHCR requests, the DHCR advised the owner that it was processing the tenant's complaint as a challenge to the initial rent registration statement and therefore the landlord was required to submit the apartment's rental history from April 1, 1980 onward, and treble damages would be awarded if the landlord could not show that the overcharge was not wilful. The owner submitted an RR-1 form for 1984 allegedly filed by the prior owner, dated April 1, 1986 and alleged that the initial registration was filed at this time and the RR-1 was served on the tenant in May, 1986, but no challenge had been made within 90 days, and further that it was not required to maintain records prior to 1984. Since the owner failed to submit evidence of this (i.e., certified mailing of the RR-1 on tenant), the DHCR found an overcharge of $62,000, including treble damages, set the initial rent at $228, and froze the rent from March 31, 1985. The owner filed an appeal (a PAR) which was denied. The PAR Commissioner found that since the initial registration was not filed until 1986, the service of such registration did not bar the tenant's complaint which was filed in October, 1985 (seven months before the service of the initial registration). The Commissioner held that the requirement of production of records from 1980 onward was justified and that the treble damage award was as well, since there was no proof in the record that the overcharge was not wilful.

The landlord appealed in an Article 78, and his appeal was denied. The Supreme Court judge ruled that the landlord failed to establish that the apartment was registered in 1984, until a late registration form was served and filed in 1986. The owner also failed to submit a rental history dating back to the base date of October 1981, despite repeated requests for same from the DHCR. The Court observed: "Neither the DHCR not the tenant has any duty to remind a landlord of this obligation [to timely file]." The Court also held that with the 1986 filing, the tenant was not obliged to file a new complaint within 90 days because she had already filed one. The filing of the late registration form on May 21, 1986 could only result in the prospective elimination of any sanction. The Court rejected the landlord's argument that the Rent Regulation Reform Act of 1997 barred the overcharges since the DHCR proceeding was docketed with the DHCR prior to July 1, 1991. Since the owner could not establish the legal regulated rent charged four years prior to the initial registration, the rent was properly determined by the DHCR. The Court also upheld the treble damages because it is a landlord who bears the burden of rebutting the presumption that an overcharge is wilful, and this landlord failed to do so.

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Case Caption:

Third Realty Corp. v. Powell

Issues/Legal Principles:

Tenant's installation of a skylight without landlord's written consent constituted a material alteration and breach of the lease.

Keywords:

alterations; cure

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Howard Malatzky

Date:

July 16, 1999

Citation:

NYLJ, page 26, col 2

Referred Statutes:

RPAPL 753

Summary:

The lower court held that the tenant violated the terms of his lease by materially altering the apartment without the landlord's written consent. He cut through the ceiling and roof and installed two plexiglass skylights. Tenant's own architect conceded that a permit was required to do this work and no permit was obtained. Tenant apparently argued that the managing agent gave his oral consent to make certain repairs in the past, but the court held that this did not constitute a waiver of tenants' obligation to secure written consent prior to undertaking the physical alterations complained of. The Appellate Term upheld the judgement against tenant but gave tenant a ten-day stay to cure the breach.

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Case Caption:

Schippers v. Slepoff

Issues/Legal Principles:

Landlord must provide tenant a rewewal lease before commencing owner occupancy proceeding, despite language in prior stipulation whereby parties agreed that in consideration of a waiver of rent landlord would not be required to tender a renewal lease.

Keywords:

renewal lease; owner occupancy

Court:

Appellate Term, 2nd & 11th Judicial District

Judge:

lower court: Hon. Jose Rodriguez

Date:

July 16, 1999

Citation:

NYLJ, page 31, col 5

Referred Statutes:

none cited

Summary:

In a prior nonpayment proceeding tenant owed about five years of rent. In consideration of wiping away three years worth of rent, the parties agreed that landlord was not obligated to offer tenant a renewal lease. In other words, it sounds like some sort of buy-out was contemplated. The tenant moved to vacate that portion of the stipulation which would have deprived him of a renewal lease. A prior judge, Judge Wendt, ruled on the motion that there was nothing in that stipulation which constituted a waiver of tenant's rent stabilization rights. The motion was denied, however, without prejudice for tenant to file a complaint with the DHCR demanding a lease renewal. The landlord failed to appeal or have that prior stipulation set aside, so the Appellate Term ruled that the landlord was bound by Judge Wendt's order and is estopped from asserting that the stipulation was intended to constitute a waiver of the tenant's stabilization rights.

Thereafter landlord commenced an owner occupancy proceeding against tenant, but the lower court dismissed it because the landlord failed to first offer tenant a renewal lease. In order to commence an owner occupancy proceeding (or a nonprimary residency proceeding) there must be a lease in effect which the owner would then notify tenant that the lease would not be renewed. The Appellate Term upheld the dismissal of the holdover proceeding. A vigorous dissent by Justice Patterson argued that the tenant was abusing the judicial system in obtaining a huge waiver of rent, yet simultaneously obtaining the benefit of a renewal lease when the stipulation appeared to make the surrender of the apartment (i.e., nonrenewal of the lease) contingent upon the waiver of rent. The justice asked why would landlord waive a sizeable portion of rent is the landlord did not get something in return? Where is the consideration? (There seem to be a lot of facts left on the "editing floor" to fully understand how the majority upheld the dismissal when the dissenting judge saw it as an outrage.)

Case Caption:

Bragston Realty Corp. v. Dixon

Issues/Legal Principles:

Landlord's failure to file the 1987 registration until 1997 does not, for purposes of tenant's 1997 overcharge claim, allow an examination of the rent history beyond four years of the date the overcharge was filed.

Keywords:

overcharges; registration

Court:

Appellate Term, 2nd & 11th Judicial District

Judge:

lower court: Hon. Bruce Kramer

Date:

July 6, 1999

Citation:

NYLJ, page 29, col 3

Referred Statutes:

RSL 26-516(a), 26-517(e); CPLR 231-a, 5520(c); Rent Regulation Reform Act of 1997

Summary:

In response to landlord's nonpayment proceeding, tenant filed a counterclaim alleging rent overcharges. Tenant proved that the annual apartment registration for 1987 was not filed until July 31, 1997 wherein the rent increased from $174.75 in 1986 to $450.00 in 1987. Tenant argued that under the Rent Stabilization Law, section 26-517(e), the failure to file a proper and timely 1987 registration barred the landlord from collecting rent in excess of $174.75 until the statement was filed on July 31, 1997. Landlord stated that he bought the building in June, 1997 and that he reviewed the registration statements and found them to be in order. Landlord also argued that the four year statute of limitations in the Rent Regulation Reform Act of 1997 precluded tenant from asserting a counterclaim of overcharges, since the alleged overcharge occurred in 1986 and over four years had passed since then, thereby making the $450.00 rent immune from challenge.

The lower court disagreed with tenant. The judge held that the 1997 Act and its legislative history made it clear that the Legislature intended to limit review of the rent records to the four years immediately preceding the interposition of the overcharge claim. On appeal, the tenant argued that the 1987 registration may be examined because it was not filed until July 1997, which is within four years of when tenant's overcharge claim was asserted. Tenant argued that the statute of limitations begins to run on the date that the rent is registered, and that the 1997 Act did not effect or amend the law with respect to penalties imposed for unfiled registrations.

The Appellate Term for the Second Department (i.e., Brooklyn and Queens) resolutely rejected tenant's arguments. The Court held that "a rent overcharge does not occur when a registration is filed or late-filed. It occurs when an owner collects `an overcharge above the rent authorized'" for a particular apartment. The Court also held that the filing of a registration is relevant in overcharge cases only insofar as it is determinative of the legal regulated rent. In this case, a proper registration was filed four years prior to the most recent registration, so the legal regulated rent must be determined with reference to the rent stated in that earlier registration. Since the first overcharge alleged by tenant occurred in 1987 and tenant did not interpose his claim within four years thereof, the claim is time-barred.

Notes:

This case provides landlords no incentive to register the rents. If the rent charged to a tenant is illegal, but four years pass with no challenge, the Appellate Term is saying that such an illegal rent can never be challenged. The registration of past rents with the DHCR is the only way a tenant may know what the lawful rent is. If no registration is filed, how is the tenant to know if their rent is legal or not (i.e., properly increased from the prior tenant's rent)? The landlord need only wait until four years into the tenancy and then register the rent with no liability accruing. This Appellate Term decision is a disgrace for it encourages landlords to undermine and sabotage the entire registration system. Surely, landlords who do not file proper and timely registrations should not be allowed to escape liability because of the four-year bar. The Appellate Term's reasoning is circular and dishonest.

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Case Caption:

Murray v. Morrison

Issues/Legal Principles:

Landlord's failure to file a proper initial registration does not entitle tenant to pay the last rent controlled rent, but it does allow tenant to file a fair market rent appeal, and a nonpayment proceeding may not be maintained until the initial registration is filed.

Keywords:

overcharges; registration; fair market rent appeal

Court:

Appellate Term, 2nd & 11th Judicial District

Judge:

lower court: Hon. Jose Rodriguez

Date:

July 6, 1999

Citation:

NYLJ, page 29, col 1

Referred Statutes:

RSL 26-512(e), 26-516(a)(2), 26-517(e); RSC 2520.6(f), 2521.2(a); CPLR 5501(a)(1); Rent Regulation Reform Act of 1997

Summary:

In 1994, landlord brought a nonpayment proceeding seeking rent in the amount of $624 per month. Tenant filed an answer with counterclaims alleging an overcharge since the inception of his tenancy in December, 1989. Tenant's motion for summary judgment contained documentation showing that the landlord bought the building in 1982, but did not register the apartment until 1994, one month after tenant's overcharge claim. Tenant also alleged that the initial and annual registrations contained false information regarding various tenants and that he never received the initial registration. Tenant concluded that until such time as the initial rent registration is properly served on him, he is only required to pay the last legal rent, which was the rent control rent of $75.20 per month. Landlord claimed that she rented the building and in good faith charged a market rent based on the renovations.

The court ruled that the registrations were not proper and rolled back the rent to the rent control amount of $75.20 since it was the last legal rent. The court relied on an Appellate Division, First Department case in support of its order, Smitten v. 56 MacDougal St. Co., 167 A.D.2d 205. The amount of the overcharges since the inception of the tenancy amounted to $25,058, and the treble damages amounted to $75,174. The Appellate Term noted that it had previously followed Smittens, but upon "further extensive consideration" ruled that Smittens ruling is inconsistent with the Rent Stabilization Law and Code, and that its application results in the imposition upon owners of penalties far in excess of those intended by the Legislature, particularly in light of the Rent Regulation Reform Act of 1997. The Court commenced its analysis by examining the rent stabilization system.

In 1971, the Legislature exempted newly vacated apartments from the rent regulation system, but reversed itself by the Emergency Tenant Protection Act of 1974 by making these units subject to rent stabilization. The initial rents of such newly vacated apartments were intended to be the fair market rents agreed to by the landlord and tenant. The rent regulation scheme was not formally enacted until 9 years later in 1983 by the Omnibus Housing Act. It provided that the "legal regulated rent" would henceforth be the registered rent. If the landlord failed to file the initial and annual registration statements, the law provided that no rent in excess of the legal regulated rent could be collected if the rent exceeded the rent in effect on the date of the last registration filed, or if none filed, on the date the apartment became subject to the regulatory system. The Appellate Term noted: It appears that the Legislature had in mind apartments that had been subject to rent stabilization prior to the enactment of the registration requirement for which legal regulated rents had already been established and the penalty provided was a rent freeze. The Court noted that the law did not make clear what the penalty should be for apartments that had previously been subject to rent control and for which legal regulated rents had not been established.

In Smitten, the First Department ruled that for these apartments the legal regulated rent was the old rent controlled rent (since this was the last registered rent (as the 1983 law indicated). However, the Appellate Term felt that this method deprives the owner of the benefit of a negotiated first rent and rolls back the rent to the rent controlled rate which is a sanction that is highly disproportionate to the rent freeze which the Legislature intended to impose. By contrast, in circumstances where a rent controlled apartment is decontrolled and challenge is made to the first stabilized rent, the DHCR takes the position that there is no legal regulated rent, until a fair market rent has been established by tenants filing of a Fair Market Rent Appeal (FMRA). In this way, owners obtain the benefit of a negotiated first rent. The Appellate Term disputed the Appellate Division, First Department's interpretation of the term "legal regulated rent" in Smittens as meaning the last rent control rent, because such rent is neither a negotiated free market rent (as the Legislature supposedly intended), nor is it "registered" with the DHCR in accordance with the Rent Stabilization Law. The Court also noted that the 1997 RRRA precludes a finding of an overcharge where the increases taken were lawful except for the failure to file a registration, and that this law runs contrary to the Smittens analysis.

The Court concluded that tenant's overcharge claim cannot lie because a legal regulated rent has not been established. The rent can only become legal if an initial registration for such rent is filed and remains unchallenged, or the tenant timely challenges the rent in a Fair Market Rent Appeal and the DHCR determines the FMRA and sets the legal rent. The Court held that the landlord could not maintain a nonpayment proceeding until the landlord registered the first rent and the tenant had an opportunity to challenge it at the DHCR. The Court held that tenant's time to file a FMRA had not begun to run because neither tenant nor his predecessors were ever properly served with the notice of the initial regulated rent (known as an RR-1).

Notes:

This case has negative implications for tenants, but also positive implications to some extent. On the one hand, the Appellate Term, Second Department has held that if the landlord did not file a proper initial rent registration, an RR-1 must be served on the tenant to allow the tenant to challenge the rent in an FMRA. Significantly, the initial registration was filed five years ago, which means that the four-year statute of limitations for overcharges under the 1997 law is not binding on instances where no initial rent registration was filed. It seems that everything else under the sun these days is barred by the four-year rule, so at least this exception is welcomed. (Actually, the four-year rule could not possibly apply because the law absolutely provides tenants 90 days to file a FMRA after they are served with the RR-1, and until that RR- 1 is served which states the initial rent, the tenant's time to challenge the legal rent remains open). It is, however, disappointing that the Appellate Term has now rejected Smittens position that the last legal rent is the rent control rent. Semantic acrobatics allow the Court to conclude that a rent control rent is not a "registered" rent pursuant to the Rent Stabilization laws. If a rent control rent is on record, then how can that not be a "registered" rent? The Appellate Term does not elaborate on an explanation. The bottom line is that the Appellate Term has little sympathy for the rent regulation system, and prefers to see the market forces rule.

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Case Caption:

Wilson Han Association v. Arthur

Issues/Legal Principles:

Appellate Term refused to dismiss Housing Court nonpayment proceeding even though rent demand violated the federal Fair Debt Collection Practices Act.

Keywords:

Fair Debt Collection Practices Act ("FDCPA"); rent demand

Court:

Appellate Term, Second and Eleventh Judicial Districts

Judge:

lower court: Hon. D. Schmidt

Date:

July 6, 1999

Citation:

NYLJ, page 29, col 4

Referred Statutes:

15 USC 1692 et seq; CPLR 5015(a)(1), (4); CPLR 1201; CCA 204; RPAPL 711(2); CPA 1410(2); CCP 2231(2)

Summary:

Tenant defaulted in a nonpayment proceeding and was evicted. Initially acting pro se, she brought a series of orders to show cause in an unsuccessful effort to be restored to possession. Thereafter Legal Services represented her and advised the court that the tenant suffers from depression and at times seems delusional and sought the appointment of a guardian. The tenant's attorney also raised the issue that the three day rent demand violated the Fair Debt Collections Practices Act ("FDCPA") which requires dismissal of the Housing Court petition. The Civil Court rejected this argument and the Appellate Term for the 2nd and 11th Judicial District affirmed.

Tenant cited to the cases of Romea v. Heiberger & Associates and Hairston v. Whitehorn & Delman in support of her position that a rent demand which violates the FDCPA is applicable to Housing Court proceedings. The tenant argued that the violation deprived the Housing Court of subject matter jurisdiction. The violation at issue was that the three-day rent demand was signed by a third party debt collector (i.e., the landlord's attorney) which is one element triggering the FDCPA, yet the FDCPA requires 30 days for the debtor (i.e., the tenant) to dispute the debt. Other Housing Court decisions, undoubtably cited by the tenant, have held that a violation of the FDCPA is applicable to nonpayment proceedings. Tenant cited various cases to support its position that Romea applied to Housing Court proceedings. The Appellate Term, however, held that these decisions indicate that New York courts are bound by the interpretations of a federal statute by federal courts only when Congress intended that the task of fashioning substantive rights, duties and remedies be shared by the state and federal courts. Apparently the cases the tenant cited to involved labor and admiralty law. By contrast, in enacting the FDCPA Congress already spelled out the remedies it intended to create, and the remedy tenant seeks (the dismissal of the petition due to the defective notice) is not specifically set forth in the statute, and the Court held that remedies should not be implied. (The FDCPA provides for monetary damages where a debt collector violates a consumer's rights under the Act.) The Court also held that the FDCPA expressly provides for jurisdiction in both federal and state courts. "Under these circumstances, tenant's claim that the state courts are bound by the federal courts' rulings cannot be considered established."

The Appellate Term also referred to the Federal Trade Commission's opinion, the agency in charge of enforcing the FDCPA, that Congress did not intend the Act to include "a notice that is required by law as a prerequisite to enforcing a contractual obligation between creditor and debtor." The Court did point out that the federal courts have rejected the FTC's opinion in favor of looking to the plain language of the statute. However, the Court held that had Congress intended to transform rent demands into 30 days notice, such an intention should have appeared in the statutory language and legislative history of the Act, and this intent is absent. The Court also noted that the FDCPA is addressed only to third party debt collectors and not to the creditors themselves (i.e., landlords). Since the Act imposes no sanctions upon creditors, dismissal of a nonpayment proceeding brought by the creditor based on an alleged violation by his or her agent is beyond the scope of the FDCPA.

Notes:

This is the first New York State appellate decision interpreting the applicability of the FDCPA to Housing Court proceedings. It is an unfortunate decision because it fails to appreciate the purpose and magnitude of the FDCPA. The most significant oversight of this decision is its omission of the concept of preemption. This means that where federal law and state law conflict, federal law must prevail. Moreover, the FDCPA contains a specific preemption clause. Since the FDCPA mandates a 30 day notice to consumers and New York State Law only provides for a 3 day notice, the federal rule must prevail over the state rule based on preemption. In the case of Garmus v. Borah Goldstein Altschuler & Schwartz, (see Housing Court Archives for the week of February 10, 1999), the federal judge discussed the preemptive effect of the FDCPA. Judge Haight ruled that the FDCPA 30 day requirements are more stringent than the RPAPL's 3 day notice requirements, but these requirements "constitute minimum national standards for debt collection practices," and the application of both laws "may be necessary to achieve the FDCPA's goal of protecting consumers from unacceptable debt collection practices." The Appellate Term ruled that the dismissal of a nonpayment proceeding is not an enumerated remedy under the Act and therefore remedies should not be implied. Yet, the dismissal of a nonpayment proceeding is not a remedy, especially when it is without prejudice to recommence the proceeding upon proper notice. The dismissal is not based on the underlying debt (i.e., the rent arrears), but rather upon the legality of the demand seeking the rent. A rent demand signed by a landlord's attorney which does not provide the tenant with the federally required 30 day is not a legal demand under federal law. Since federal law, the FDCPA, applies to all third party debt collection practices (and debt collection is the essence of a nonpayment proceeding), and since the 30 day period is not provided, then clearly such a rent demand violates federal law, and a demand violative of federal or state law cannot form the basis of a nonpayment proceeding.

The Court's position that had Congress intended to include rent demands as subject to the FDCPA, the statute would spell this out or the legislative history would make mention of it. The 30 day provision applies to ALL initial communications from a debt collector. There must be thousands of variations of initial communications covering a countless variety of debts. Why would Congress give special attention to rent demands more than any other type of initial communication? With all due respect, the Appellate Term's perception of New York's rent laws is self-important. Congress' silence toward rent demands is far more persuasive an argument that Congress intended to cover ALL initial communications. Interestingly, the Appellate Term did not challenge Romea's principles that rent is a debt and a rent demand signed by a landlord's attorney constitutes a communication.

The Appellate Term, 2nd & 11th Judicial District is the Second Department, covering for example, Brooklyn and Queens. The Appellate Term, First Department covering Manhattan and the Bronx has not yet been heard from on the applicability of the FDCPA to Housing Court proceedings. In May, 1999 Northern Manhattan Legal Services argued their case of Dearie v. Hunter before the Appellate Term, First Department. Their legal briefs contained excellent arguments addressing the preemption issues. It is hoped that the Appellate Term, First Department will render a more reasoned decision which advances the letter and spirit of the FDCPA than did the Appellate Term for the Second Department.

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Case Caption:

Ardache Corp. v. Shea and Lawson

Issues/Legal Principles:

Landlord waives objection to sublet by not objecting for ten years, accepting rent from tenant with knowledge of the sublet, and prosecuting a nonpayment proceeding against tenant three years before commencing the illegal sublet holdover.

Keywords

waiver; illegal sublet

Court:

Appellate Term, First Department

Judge:

lower court judges: Howard Malatzky

Date:

July 7, 1999

Citation:

NYLJ, page 28, col 4

Referred Statutes:

none cited

Summary:

Tenant (shareholder and tenant of a cooperative corporation), sublet the apartment without first obtaining the written consent of the cooperative corporation, as required by the proprietary lease (the lease between the shareholder and the cooperative corporation). Landlord (the cooperative corporation) brought a holdover (eviction) proceeding against tenant alleging illegal sublet. The trial court found that, under the facts presented, the landlord waived its right to object to the sublet and dismissed the holdover proceeding against tenant (Shea) and subtenant (Lawson). When Shea purchased the cooperative apartment in 1990, Lawson had already been in occupancy for three years, pursuant to a sublease with the prior tenant. Shea allowed Lawson to continue in occupancy. The court noted that landlord obviously knew about Lawson's occupancy "from the outset." (By "from the outset," the court probably means that the landlord knew since at least 1990, when Shea purchased the apartment from the landlord). In 1994, the landlord brought a nonpayment proceeding against Shea. This case was settled, wherein Shea agreed to pay the absentee landlord fee to the landlord "until such time as he can turn the apartment over to Ken Lawson, make him a co-owner, or sell the apartment to another buyer." The stipulation did not say (as landlord now contends) that Lawson would vacate within three years. Landlord did not make any formal objection to Lawson's occupancy until November 1997 (presumably that's when the landlord served a predicate notice upon Shea). The court explained its finding for tenant as follows: "Landlord's inaction over a period of a decade, acceptance of rent, and prosecution of a nonpayment (not a holdover) proceeding, supports the conclusion that any breach by Shea of the cooperative's subletting restrictions was effectively waived (cite omitted). A course of conduct may waive a default, notwithstanding a nonwaiver clause in the lease (cite omitted). Further, while landlord correctly argues that a waiver of a breach of a covenant against subletting does not waive future breaches (cite omitted), this is not a case where there have been successive sublets."

Notes:

This case was brought by a cooperative corporation (landlord) against a shareholder (tenant). It is reported here because its holding applies to other residential landlord-tenant relationships as well.

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Case Caption:

EBW LLC v. Geralds

Issues/Legal Principles:

The Rent Deposit Law should not be applied retroactively, that is, to summary proceedings initiated prior to its effective date (October 17, 1997).

Keywords:

rent deposit law

Court:

Civil Court, New York County

Judge:

Hon. Judge S. Evans

Date:

July 7, 1999

Citation:

NYLJ, page 29, col 5

Referred Statutes:

RPAPL Section 745(2) (the rent deposit law)

Summary:

The trial court (housing court) granted summary judgment to tenant and the appellate term reversed and reinstated the landlord's holdover petition. The landlord now brings a motion requesting the trial court to (1) restore the proceeding to the court's trial calendar; (2) direct tenant to deposit all use and occupancy or rent which has come due since the proceeding was initiated in August 1996 and (3) mark the proceeding off the calendar pending a Loft Board determination of the status of the subject apartment. The court granted the first part of the landlord's motion (restoring the case to the calendar) but denied the second and third part of the landlord's motion. The rent deposit law provides requires a tenant to deposit all rent payments due on or after the commencement of a proceeding if a landlord-tenant dispute cannot be resolved within thirty (30) days after the parties' first appearance in court or before two adjournments are requested by the tenant. Relying on the decision of a Bronx housing court judge in the case Simokowitz v. Farello, the housing court judge in this case decided that the legislature did not intend for the rent deposit law to be applied retroactively, that is, to proceedings filed prior to its enactment on October 17, 1997. In addition, the court agreed with tenant's attorney that the purpose of the rent deposit law is to protect landlords in the event that tenants delay a proceeding. In this case, the landlord is delaying the proceeding by asking the court to mark the proceeding off the court's trial calendar until landlord files an application with the Loft Board and until the Loft Board determines this application.

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Case Caption:

Gottlieb v. Scaringi

Issues/Legal Principles:

A hearing is required in order to determine landlord's intent where landlord accepted two months' rent after service of a termination notice but prior to the commencement of a summary holdover proceeding.

Keywords:

waiver

Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Howard Malatzky

Date:

July 8, 1999

Citation:

NYLJ, page 26, col 6

Referred Statutes:

none cited

Summary:

Landlord served tenant with a termination notice, which is a predicate notice to a summary holdover proceeding. After serving the termination notice and prior to the commencement of the holdover proceeding, landlord accepted two months' rent. Landlord then served tenant with a holdover petition. Tenant moved for summary judgment (that is, judgment for tenant without a trial) because landlord accepted rent after service of the termination notice. The trial court granted tenant's motion but the appellate court reversed and sent the case back to the trial court. The appellate court quoted from the Court of Appeals case, Jefpaul Garage Corp. v. Presbyterian Hospital, which defined waiver as "the voluntary abandonment or relinquishment of a known right. It is essentially a matter of intent which must be proved." Therefore, the appellate court explained that the trial court should not have determined that the landlord waived its rights to commence a holdover proceeding without a hearing to explore "issues as to landlord's intent and its receipt, retention and negotiation of the money orders in question."

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