Housing Court Decisions October 1999

edited by Colleen F. McGuire, Esq. and Linda Rzesniowiecki, Esq.

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New York Law Journal,
decisions for the week of October 25-29, 1999 (5 cases)


Case Caption:
House of Bowery Corp. v. Ensley
Issues/Legal Principles:
Respondent was not properly served in case where process server left petition with a person who is involved in litigation against respondent.
Keywords
suitable discretion; substituted service
Court:
Housing Part of the Civil Court, New York County
Judge:
Hon. Judge James
Date:
October 27, 1999
Citation:
NYLJ, page 30, col 1
Referred Statutes:
CPLR Section 3211(a)(7); RPAPL Section 735(1); Real Property Law Section 232-a
Summary:
Landlord served a notice of termination upon Ensley (prime tenant) by service upon Handwerker (variously described as subtenant or roommate). This type of service is called substituted service. The law allows service upon a party by personal delivery upon "a person of suitable age and discretion who resides or is employed at the property sought to be recovered." RPAPL Section 735(1). The property sought to be recovered in this case was Ensley's loft. The court decided that Handwerker was not a person of suitable discretion for two reasons. First, at the time of service, a case for damages was pending in court that was brought by Handwerker against Ensley. There was a danger that Handwerker would not give the court papers to Ensley. Second, the Supreme Court had already decided that Ensley and Handwerker occupy separate loft units on the second floor. Hensley is therefore not a person who "resides or is employed at the property sought to be recovered" as required by RPAPL Section 735(1). The Court dismissed the holdover proceeding against Ensley because she was not properly served with the notice of termination.


Case Caption:
Bedford Gardens v. Calhoun
Issues/Legal Principles:
Tenant alleges prejudice because landlord served holdover petition four months after service of notice of termination; court holds that tenant may attempt to prove laches defense at trial.
Keywords:
laches
Court:
Housing Part of the Civil Court, Kings County
Judge:
Hon. Ava Alterman
Date:
October 27, 1999
Citation:
NYLJ, page 31, col 3
Referred Statutes:
CPLR Sections 217, 3211, 3212; Private Housing Finance Law Article II
Summary:
Petitioner-landlord, a housing company organized under Article II of the Private Housing Finance Law, served a preliminary notice of grounds of eviction and notice to cure upon tenant, alleging that tenant was not primarily residing in the subject premises and had illegally assigned the apartment to other individuals. A hearing took place at the Department of Housing Preservation and Development ("DHPD") after the notice to cure was issued. A Certificate of Eviction issued after the hearing. The landlord then served a notice of termination. Four months after serving the notice of termination, the landlord served tenant with a notice of petition and petition - holdover. The tenant moved to dismiss on the grounds of laches, arguing that the landlord unreasonably and excusably delayed for four months and that the delay resulted in prejudice to the tenant. The Court held that the tenant failed to present sufficient facts in support of its laches argument but that tenant may re-present its laches defense at trial.


Case Caption:
D.U. 3rd Realty Co. v. Wilson
Issues/Legal Principles:
Court stayed the execution of the warrant of eviction, notwithstanding fact that judgment had not been paid, where tenant sought opportunity to prove that all or part of judgment had been paid directly to landlord by City agency.
Keywords:
stays; warrant of eviction
Court:
Housing Part of the Civil Court, Kings County
Judge:
Hon. D. Thomas
Date:
October 27, 1999
Citation:
NYLJ, page 31, col 4
Referred Statutes:
RPAPL Section 747-a
Summary:
Tenant brought a post-judgment Order to Show Cause pro se and then appeared in court represented by an attorney from legal services. In this case, tenant's rent was paid directly from DSS (welfare) to the landlord and tenant consequently does not have any records of payments. Tenant's attorney asked the Court for an adjournment in order to subpoena payment records from DSS. Tenant alleges that the judgment amount does not credit tenant with these payments. In addition, tenant's attorney alleges that tenant's Section 8 benefits were improperly terminated and that an Article 78 proceeding is pending in Supreme Court to challenge this termination. The landlord opposed the tenant's application for an adjournment on the grounds that tenant owes $7,000.00 in back rent which has not been paid and that there are two prior stipulations in which tenant agreed to the issuance and execution of a warrant of eviction. Landlord argued against the adjournment citing to RPAPL Section 747-a. RPAPL Section 747-a, as amended by the Rent Regulation Reform Act of 1997, reads as follows: "In the City of New York, in any non-payment summary proceeding in which the respondent has appeared and the petitioner has obtained a judgment pursuant to section 747-a of this article and more than five days has elapsed, the court shall not grant a stay of the issuance or execution of the warrant of eviction nor stay the re-letting of the premises unless the respondent shall have either established to the satisfaction of the court by a sworn statement and documentary proof that the judgment amount was paid to the petitioner prior to the execution of the warrant or the respondent has deposited the full amount of such judgment with the clerk of the court." Citing to the case of Lang v. Pataki, the court explained that it is empowered to stay the warrant of eviction for good cause shown and that it would stay the warrant in this case. Lang v. Pataki held that RPAPL Section 747-a was constitutional but that it may be unconstitutional as applied to certain circumstances. The court implied that in the circumstances presented herein, it would be unconstitutional if the court refused to allow tenant to prove that the judgment amount had, in fact, been paid in full or in part by DSS.


Case Caption:
Lido Realty Co. v. Tharos
Issues/Legal Principles:
Court determined that it properly issued a default judgement, without holding an inquest, for rent and additional charges due and owing.
Keywords:
default judgments; motion to vacate
Court:
City Court of the City of Long Beach
Judge:
Hon. Judge Smolkin
Date:
October 27, 1999
Citation:
NYLJ, page 33, col 3
Referred Statutes:
CPLR Sections 3215 and 5015(a)
Summary:
Petitioner brought an action for nonpayment of rent against respondent. The amounts sought were clearly set forth in the complaint and included base rent, late charges and water charges, reimbursement for certain taxes and a sanitation charge. The Respondent defaulted and the petitioner obtained a default judgment, without an inquest (a hearing), pursuant to CPLR Section 3215. One and one-half years later, the respondent brought a motion to vacate the default judgement. The Court denied respondent's motion because it was not made within one year as required by CPLR Section 5015. The court also determined that it properly issued the default judgment without holding an inquest. CPLR Section 3215 permits a petitioner-landlord to ask the court for a default judgment if "the claim is for a sum certain or from a sum which can by computation be made certain." The amount landlord asked for was equal to the amounts asked for in landlord's complaint; the court merely had to make some arithmetical calculations to determine landlord's total damages. Therefore the court found that it properly issued a default judgement pursuant to CPLR Section 3215.


Case Caption:
Matter of Kempner v. DHCR
Issues/Legal Principles:
The four-year statute of limitations set forth in the Rent Regulation Reform Act ("RRRA") of 1997 does not apply to fair market rent appeals.
Keywords:
fair market rent appeals; rent overcharge claims
Court:
Supreme Court, New York County
Judge:
Hon. Justice McCooe
Date:
October 27, 1999
Citation:
NYLJ, page 28, col 1
Referred Statutes:
RSL Section 26-513 and 26-516; RRRA of 1997
Summary:
The DHCR issued a determination that the tenant's fair market rental appeal ("FMRA") is time-barred by the four year statute of limitations set forth in the Rent Regulation Reform Act ("RRRA") of 1997. (An FMRA is a challenge to the initial apartment registration statement that the landlord filed with the DHCR and served upon the tenant. In some cases, the initial registration statement may have been filed and served in 1984). The tenants filed an Article 78 proceeding with the Supreme Court, New York County to challenge DHCR's determination. The Court determined that the four-year statute of limitations applies only to rent overcharge claims but not to fair market rent appeals. A fair market rent appeal must be filed within 90 days of the date tenant is served with a copy of the initial apartment rent registration statement. (This form is called the RR-1 form). If the landlord never served the RR-1 form, then the ninety-day statute of limitations has not started to run. When the legislature enacted the RRRA of 1997, it amended RSL Section 26-516 (the section about rent overcharge complaints) to include a four-year statute of limitations but it did not so amend Section 26-513 (the section about fair market rent appeals). The Court said that the legislature's failure to amend Section 26-513 is the clearest expression of the legislature's intent that the four-year statute of limitations should be applied only to rent overcharge claims.


New York Law Journal,
decisions for the week of October 18-22, 1999 (9 cases)


Case Caption:
Seven Park Avenue Corp. v. Tessler
Issues/Legal Principles:
Tenants who cured unlawful sublet during post-judgment ten-day cure period are still liable to the landlord-cooperative for attorney's fees.
Keywords:
sublease; ten-day cure; attorneys fees
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Laurie Lau
Date:
October 21, 1999
Citation:
NYLJ, page 28, col 2
Referred Statutes:
RPAPL 753(4)
Summary:
Tenant co-op owners violated their proprietary lease by renewing the sublease without obtaining the co-op Board's consent. The tenant tried to tender rent checks that said that if the co-op board cashes them, such act will be deemed an acceptance of the sublet. The court held that the cooperative was entitled to strike such language from the tenant's rent check. Attorney's fees were awarded to the cooperative. The court rejected the tenant's position that since he or she had cured the violation (the sublet) in the post-judgment ten-day cure period, the landlord should not be deemed the prevailing party. This period is merely for preserving the apartment. The landlord is still deemed the victor because of the tenant's violation and thus entitled to attorney's fees.


Case Caption:
Paikoff v. Harris
Issues/Legal Principles:
Tenants residing in a co-op or condo owned by the "holder of unsold shares" (e.g., the sponsor) who took occupancy after the conversion constitute a "non-purchasing" tenant and must be tendered a renewal lease at a rent that is not unconscionable, i.e., not above the fair market rent of comparable apartments.
Keywords:
Martin Act; co-ops; retaliatory eviction; unconscionable rents
Court:
Appellate Term, Second Department
Judge:
lower court: Hon. Marc Finkelstein
Date:
October 20, 1999
Citation:
NYLJ, page 32, col 2
Referred Statutes:
General Business Law 352-eeee; CPLR 3211(a), 3212;
Summary:
Landlord brought a holdover proceeding against the tenants and characterized the tenants as mere month to month tenants. The apartment is in a co-operative building and this unit is owned by the sponsor of the co-op conversion, but was not purchased; rather the owner leases it. The owner of the unit is a "holder of unsold shares" pursuant to the definition under the Martin Act (the common name for the law governing co-op and condo conversions). Tenants argued that they satisfied the Martin Act's definition of a "non-purchasing tenant." A non- purchasing tenant is defined as persons "to whom a dwelling unit is rented subsequent to the effective date" of the conversion plan. The building was converted in 1987 and tenants moved in in 1992. Under the Martin Act, a landlord cannot give a tenant who qualifies as a "non- purchasing tenant" a renewal lease with an "unconscionable rent increase." In this case, the rent of the renewal lease was increased from $500 to $850 which is a 70% increase. The tenants characterized the increase as unconscionable. The tenants argued that the landlord could not evict them unless for "good cause" under the Martin Act and that the landlord must give them a renewal lease whose rent is not unconscionable.
The landlord argued that the tenants were not "non-purchasing tenants" because they had sublet from "a purchaser under the plan" which is broadly defined in the Martin Act as the "person who owns the shares allocated to a dwelling unit" and that this made the landlord a purchaser under the plan. In that regard, the Martin Act provides that "a person who sublets a dwelling unit from a purchaser under the plan shall not be deemed a non-purchasing tenant." Landlords also argued that even if the tenants were deemed to be "non-purchasing tenants," the $850 rent was not unconscionable and was based on landlord's inquiry with real estate brokers and other landlords as to the going rate for comparable apartments in that vicinity. The lower court ruled that because the tenants were "non-purchasing tenants" under the Martin Act and because the holdover petition failed to characterize them as such, this pleading defect required the petition's dismissal.
The Appellate Term rejected the lower court's dismissal of the petition on pleading grounds. The Court held that even if the First Department (Manhattan and the Bronx) continues to recognize the infirmity of pleading defects, the Second Department is not bound by that analysis. The Court held that the petition could be amended to properly re-state the tenancy status of the tenant. Further, the Court held that the tenants were not prejudiced by the misstatement of their status because they were clearly prepared to litigate that issue (a prior proceeding occurred between the parties). Thus, the Court refused to regard the pleading deformity as a valid basis for dismissing the petition.
The Court agreed with the lower court that the tenants are "non-purchasing tenants" under the Martin Act's definition. The Court conceded that the Martin Act's definitions contain inconsistencies and ambiguities, but the court refused to accept the landlord's narrow interpretation of a "non-purchasing" tenant as a tenant who rents the unit after the co-op plan is declared effective by the Attorney General's Office but before the unit's closing date (usually referred to as an "interim lease tenant."). The Court rejected this interpretation because the statute does not specifically characterize a non-purchasing tenant in this way. The Court held: "We believe that a proper construction of the statute must be based upon an understanding of the protection that the Legislature intended to provide." The Court then commented at length on the differences between an eviction and a non-eviction plan. It noted that protections afforded non-purchasing tenants were necessitated by the change in the owner's economic incentives as a result of the conversion. Where an owner in a rental building obtains a market rent, the owner's interests coincide with society's because neither wishes to displace the tenant. However, after a conversion it may be more to the owner's economic interest to evict the tenant and leave the apartment empty. In such case the owner's interest diverges from that of the tenant and the public. "It is, in our view, against this financial incentive to displace the non- purchasing tenant that the Legislature sought to protect," especially since the statute's findings not that there is a clear "public interest" to avoid such dislocations. In that regard, the Court held that there can be no valid distinction between tenants in possession at the time of the conversion and those who rent from sponsors after the conversion. If a sponsor chooses to rent an apartment after a conversion rather than sell it, this will ordinarily be because market conditions favor a rental over a sale. The Court noted that when these conditions change,t he sponsor will find it financially advantageous to discontinue renting. "If it was the Legislature's intention to protect tenants form dislocations caused by this shift in the owner's economic interest, it could only address the problem thoroughly by protecting tenants that rent from sponsors after the conversion as well as those in possession at the time of the conversion."
The Court then went on to determine whether the landlord had increased the tenants' rent by an unconscionable amount. The Court rejected the tenants' argument that a 70% increase above their own rent must be regarded as unconscionable. Instead the Court held that "the rent may not be increased beyond the rent being charged for comparable apartments." The Court noted that the statute was not intended to institute a system of rent regulation to non- purchasing tenants, but to prevent sponsors from charging these tenants above-market rents as a means of forcing them out. Since tenants rejected the lease offered by landlord, which the Court concluded contained a reasonable rental increase, the Court granted summary judgment to the landlord awarding the landlord possession of the apartment.
Notes:
This was an extraordinary affirmance by the Appellate Term, Second Department of Judge Finkelstein's groundbreaking decision. This case carves out a new class of protected tenants: those who rent co-ops or condos from the sponsor. These tenants are not rent stabilized or rent controlled tenants because they didn't reside in the unit before the conversion took place. There exist thousands of tenants in New York City who are affected by this decision. If the unit is owned by the sponsor or a "holder of unsold shares," the Appellate Term affirmed that they are "non-purchasing tenants." One of the protections this class of tenants has is that they may not be evicted except for "good cause." Tenants residing in a co-op or condo are advised to consult with an attorney to determine their rights. Word has it that a Martin Act appeal is currently pending before the Appellate Term, First Department. It will be interesting to see which why the First Department decides on this controversial issue. In any event, one cannot help but predict that the landlord interests will ensure that this issue is taken up to higher courts, no doubt on the legal theory of an unconstitutional taking. Tenant interests, on the other hand, must fight to ensure that the Martin Act is interpreted in the manner Paikoff v. Harris was by the Second Department. This is because landlords are eviscerating and chipping away at longtime rent regulation rights. A new class of protected tenants■protected from the whims and harshness of market forces■creates allies in tenants' battles to maintain regulation in an arena where tenants are for the overwhelming part vulnerable to the economic clout and superior bargaining position of their landlords.


Case Caption:
Future Tenth Assoc. v. Roche
Issues/Legal Principles:
Tenant might be entitled to a six month stay of the execution of the eviction warrant based on her mental condition, but is not entitled to cure a violation based on illegal drug dealing on grounds of mental impairment.
Keywords:
cure; nuisance; illegal usage; stay
Court:
Civil Court, New York County
Judge:
Hon. Doris Ling-Cohan
Date:
October 20, 1999
Citation:
NYLJ, page 29, col 6
Referred Statutes:
none cited
Summary:
RPL 231; RPAPL 711(5), 715; Penal Law 221.25, 710.40, 255.20
The landlord sought to evict the tenant on grounds of drug dealing in her apartment. A guardian ad litem was appointed for the tenant. The tenant sought to introduce psychiatric testimony because she argued that if she is mentally impaired the court could permanently stay the execution of the warrant in the event the court determines that the tenant unlawfully sold drugs from the apartment. The case the tenant relied upon for this proposition, however, involved a situation where persons other than the tenant were accused of selling drugs from the tenant's apartment and the issue was whether that tenant had the mental capacity to acquiesce in their illegal usage of the tenant's apartment. In the case at bar, the court pointed out that the tenant herself is accused of selling the drugs. The court concluded in reliance on appellate law that mental illness alone is not a defense to a holdover proceeding based on nuisance. The court also noted that the appellate case dealt with the tenant's ability to cure certain nuisance conditions, and such ability related to the tenant's psychiatric state. Here, the court held, dealing drugs is not curable by medicine or therapy. Hence, psychiatric testimony is irrelevant. The court did, however, hold that if the tenant is found to be dealing drugs the tenant might be granted a six month stay of the execution of the warrant of eviction, rather than order an immediate eviction, based on psychiatric testimony.
The court had a trial on the drug accusations and heard testimony from the landlord, a police officer, the tenant, and the tenant's neighbor. The court concluded that the landlord was entitled to the apartment because based on the evidence the tenant was dealing drugs from her apartment. The court found that the illegal items, including the quantity of marijuana, found in the apartment were numerous and inconsistent with personal use. At one point the tenant pleaded the Fifth Amendment which allows a witness to decline to answer questions under oath where the answers might incriminate him or her in future criminal proceedings. The choice to testify, as tenant did, waives the privilege against self-incrimination, but only insofar as the accused may then be compelled on cross-examination to answer any questions material to the case. In a civil case, an unfavorable inference may be drawn against a party from the exercise of the privilege against self-incrimination. The court drew that negative inference when the tenant pleaded the Fifth Amendment when asked on cross-examination about the illegal items seized in her apartment.


Case Caption:
350 East 62nd Street Associates v. Vacuole
Issues/Legal Principles:
Even though the court found that the tenants had made illegal alterations, they were entitled to recover attorney's fees because the landlord waived a right to take the tenants to court on this issue because the violations occurred too long ago.
Keywords:
attorney's fees; illegal alterations; cure
Court:
Civil Housing Court, New York County
Judge:
Hon. Laurie Lau
Date:
October 20, 1999
Citation:
NYLJ, page 29, col 5
Referred Statutes:
RPL 234
Summary:
Landlord brought a holdover proceeding against the rent stabilized tenants on grounds that they had altered the apartment without the landlord's consent. After trial the court found that although the tenants did make the alterations, the landlord waived its right to object, and further the apartment could be restored to its original condition if and when the tenants left. The issue before the court was whether the tenants were the prevailing party so as to award them attorney's fees. The landlord argued that the tenants cannot be deemed the prevailing party because the court explicitly found that they violated the lease. The court offered an illuminating analysis of prior appellate cases involving attorneys fees in circumstances where neither side appears to be the straightforward prevailing party. The court's comparison of various cases makes this decision useful for future reference in similar cases. Ultimately the court found that even though the tenants breached the lease, the tenant husband had assisted the superintendent making similar alterations to other apartments in the building and after having done these alterations with the super he did the same to his own apartment and improved the design for the alterations. This apparently happened long ago, although the landlord is only now taking action. The court held that the landlord therefore waived any right to proceed against the tenant. A waiver occurs when the landlord knows of a tenant's violation but takes no action, and a long passage of time may preclude a landlord from years later attempting to make an issue out of such violation. The long-term waiver element is the factor that induced the judge to deem the tenants the prevailing party.


Case Caption:
Kingsbridge Partners v. Atkinson
Issues/Legal Principles:
Tenant who wins Fair Market Rent Appeal can deduct the award from her rent even though tenant entered the DHCR decision as a judgment in the county clerk's office.
Keywords:
Fair Market Rent Appeal, overcharges, judgments
Court:
Appellate Division, First Department
Judge:
lower court: Hon. Brenda Spears
Date:
October 18, 1999
Citation:
NYLJ, page 27, col 3
Referred Statutes:
RSC 2522.3(d), 2526.1; Administrative Code of the City of New York 26-513; RSL 26- 516(a)
Summary:
The landlord brought a nonpayment proceeding against the rent stabilized tenant. The tenant had won a Fair Market Rent Appeal at the DHCR and sought to deduct the overcharge flowing from that award from her monthly rent. This was so even though the tenant had recorded the judgment of the DHCR award in the Bronx County Clerk's office. The judgment, apparently unsatisfied, is a nullity. The appellate courts upheld the lower court on this issue because unlike the enforcement provisions of DHCR orders awarding penalties in rent overcharge proceedings (where the tenant may choose between deducting the overcharge from the rent or entering a monetary judgment), a Fair Market Rent Appeal award by the DHCR cannot be subject to the entry of a judgment by itself. Rather, the tenant must commence a plenary action in Civil Court and obtain a judgment and then enter that Civil Court judgment. Since the tenant did not commence a plenary action, she was entitled to off-set the award against the rent demanded by the landlord in the nonpayment proceeding.


Case Caption:
Slope Spaces Inc. v. Vasquez
Issues/Legal Principles:
Surviving partner establishes succession rights based on nontraditional family relationship because the standard is not "total intermingling of finances" but rather "financial commitment and interdependence."
Keywords:
succession rights
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower court: Hon. Peter Wendt
Date:
October 19, 1999
Citation:
NYLJ, page 29, col 1
Referred Statutes:
RSC 2520.6(o)
Summary:
The landlord brought a holdover proceeding after the tenant of record died. The tenant's lifetime partner claimed succession rights to the apartment based on a nontraditional family relationship. The lower court held for the landlord on grounds that the partner failed to establish a sufficient intermingling of their finances. The two elements to be proven in a succession rights case based on a nontraditional family relationship are an emotional and financial interrelationship. The emotional relationship was clear since the couple held themselves out as husband and wife to family and friends and lived together for years. The Appellate Term reversed the lower court, holding that the absence of total intermingling of finances is a fact that "by itself does not require a finding that they were not family members" as defined by the rent stabilization code. The court went on to note: "Even in traditional marriages, particularly those between older people who have previously been married and who have children from those previous marriages, it is not uncommon to find that there is not a total intermingling of finances." The court noted that the Code does not require a "total intermingling" of finances, only an "emotional and financial commitment and interdependence." The Appellate Term directed that a lease be tendered to the surviving partner in her own name since the elements of a nontraditional family relationship had been established.


Case Caption:
1801 Weeks Avenue Inc. v. Crawford
Issues/Legal Principles:
Landlord does not have to show "good cause" or obtain the City's certification to bring a holdover against a Section 8 tenant whose lease expired on its own terms.
Keywords:
Section 8; good cause
Court:
Civil Housing Court, Bronx County
Judge:
Hon. Heymann
Date:
October 20, 1999
Citation:
NYLJ, page 31, col 1
Referred Statutes:
42 USC 1437f; 24 CFR 982.310, 982.401, 982.305, 982.405, 982.452(b), 982.404(a),
Summary:
Tenant is a Section 8 tenant which means that her apartment rent is at a market rate of $1010.10 per month, but she only pays $127.10. The balance is paid by the Department of Housing and Urban Development ("HUD"). HUD subsidizes the housing and the New York City Housing Authority ("NYCHA") administers the program. Private landlords who participate in the program are given vouchers whereby HUD pays the difference between the market rent and the tenant's subsidy, in this case $883.00. The program requires that the landlord maintain habitable living conditions. If violations exist, the landlord could be denied the right to receive rent from HUD. Before a Section 8 tenant may be evicted by the landlord, the landlord must obtain a certification from NYCHA approving of the eviction if the eviction arises out of termination or suspension of the Section 8 subsidy. In this case, NYCHA refused to certify the landlord's termination of the tenant's tenancy. Nonetheless, the landlord commenced an eviction proceeding against the tenant.
NYCHA asked the court to dismiss the proceeding on grounds that federal law ("the Williams Consent Decree) in these instances require "good cause" to evict the tenant. NYCHA argued that the landlord did not maintain the building in a manner which met the Section 8 housing quality standards. As a result the Section 8 subsidy was suspended and the contract for the subsidy was not renewed, nor was the tenant's lease renewed. The failure to renew the lease was solely due to the landlord's failure to correct hazardous conditions. This ground, NYCHA argued, does not constitute "good cause" to evict the tenant. The court, however, found NYCHA's position unconscionable because it allows the tenant to remain in the apartment virtually rent-free (except perhaps for her $127.10 portion of the rent) and the landlord cannot evict her, nor is there a landlord-tenant relationship since the lease was not renewed. The court noted that while it did not condone the landlord's breach of the housing standards, it is equally unjust if NYCHA were allowed to indefinitely suspend or terminate subsidies, which cannot be retroactively recouped, because economic hardship is forced on the landlord. To deny the landlord a right to bring a holdover under these circumstances is punitive in the judge's view.
The court reviewed the terms of the contract between the landlord and NYCHA and determined that NYCHA has no right to preclude the landlord from bringing a holdover proceeding against the tenant where the lease ends. NYCHA can, however, refuse to pay retroactive rent on the subsidies it suspended or terminated. The court felt that during the holdover a ten-day stay could provide the landlord a period in which to correct the conditions and then be able to recoup the rent. The court rejected NYCHA's position that the owner must prove "good cause" before the holdover may be maintained because the basis for the holdover did not arise while the lease was in effect, but rather it was the expiration of the lease which led to the holdover. Therefore, NYCHA's certification is not required in order for the landlord to proceed against the tenant in Housing Court. The court also rejected NYCHA's interpretation of the notice to vacate. The court found that the notice did not demand tenant to pay the subsidies portion of her rent which was terminated or suspended by NYCHA.


Case Caption:
1050 Tenants Corp. v. Lapidus
Issues/Legal Principles:
Tenants who only receive a 6% abatement are not deemed the prevailing parties, and landlord is entitled to attorney's fees.
Keywords:
abatements; attorney's fees; pre-judgment interest
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Howard Malatzky
Date:
October 19, 1999
Citation:
NYLJ, page 26, col 1
Referred Statutes:
none cited
Summary:
Tenant's complaints of noise and infestation in the luxury apartment were not proven at trial according to the lower court, a decision affirmed by the Appellate Term. The tenant only received a 6% abatement, while the landlord recovered $55,000 in rent. In these circumstances it was clear that the landlord was the prevailing party in this nonpayment proceeding and was entitled to attorney's fees. The lower court awarded the landlord $115,000 in attorney's fees. Even though the trial lasted only three days, it was the culmination of extensive pre-trial litigation. The Appellate Term noted that the tenants refused to settle even though they were offered an abatement greater than what they obtained at trial. The Appellate Term did, however, reduce the amount of the fee, but did not specify by how much in this decision. Finally, it was determined that the landlord was entitled to pre-judgment interest.


Case Caption:
Fort Holding Corp. v. Supple
Issues/Legal Principles:
Horrific odors emanating from tenant's apartment for a prolonged period of time compel tenant's eviction.
Keywords:
nuisance
Court:
Civil Housing Court, New York County
Judge:
Hon. Timmie Elsner
Date:
October 20, 1999
Citation:
NYLJ, page 30, col 3
Referred Statutes:
RSC 2524.3(b)
Summary:
The landlord commenced a holdover proceeding against the rent control tenant on grounds of nuisance. Almost a year after the proceeding was commenced, the premises were cleaned once a guardian ad litem was appointed. A stipulation placed the tenant on probation for a year and stayed her eviction so long as the apartment was maintained in "a sanitary condition inoffensive to management and other tenants." At the time of the agreement there was no electric service in the apartment. Tenant agreed to restore the electricity so that landlord could undertake repairs which landlord complained it was unable to do because it was deprived of access. During the probation year the tenant began an HP proceeding to compel the landlord to make repairs. For reasons unknown the proceeding was discontinued in October, 1998. Three weeks before the stipulation was scheduled to end, in January, 1999, the landlord restored the holdover proceeding to the calendar on grounds that the tenant breached the agreement to keep the apartment clean. A trial was held and witnesses testified that horrendous odors emanated from the tenants apartment akin to rotten flesh. Tenant and her witnesses, however, attributed the odors primarily to garbage in the courtyard. The judge herself made an inspection to the building and detected a putrid odor akin to dead animals, and the odor was highly perceptible in the hallway and became "overwhelming" when the tenant's door was opened. The court inspected the entire apartment and surmised that it "appeared to be utilized for storage, or as a kennel for respondent's dogs, rather than for actual living purposes." There was also evidence that it lacked habitable conditions, such as a missing window and inoperable light fixtures. The court explored other common areas of the building, but detected no odors.
The court noted that a nuisance has been defined as "continually occurring conduct which threatens the comfort and safety of others in the building." The court cited other cases which held that offensive odors emanating from an apartment for a protracted period so as disturb the comfort and safety of other tenants constitutes a nuisance. The court ruled that based on all the evidence before it, the tenant violated the stipulation of probation. The court held that the conditions in the apartment were not merely objectionable, but were dangerous to the health, safety and welfare of the building's other residents. The court also found that the tenant repeatedly denied access. The court held that the landlord was not blameless for failing to do the repairs despite repeated calls from the guardian, but the court noted, the repairs were not the source of the odors. The court also noted that the landlord held off on eviction for as long as possible trying to seek ways to resolve the matter. The court held that the probation was supposed to be a cure period, but the tenant persisted in her behavior which was intolerable and a danger to the other tenants. The court acknowledged tenant's rent controlled long term tenancy and her mental impairment, and therefore did not immediately evict the tenant, but rather gave the tenant until December 31, 1999 to relocate with the assistance of the Protective Service Agency.


New York Law Journal,
decisions for the week of October 11-15, 1999 (6 cases)


Case Caption:
313 West 57th Associates v. Gordon
Issues/Legal Principles:
When notice of petition and petition are annexed, and verification to petition is properly signed by landlord's attorney, proceeding will not be dismissed for failure to sign the notice of petition.
Keywords:
motion to dismiss; signatures
Court:
Appellate Term, First Department
Judge:
lower court judge: Hon. Timmie Erin Elsner
Date:
October 12, 1999
Citation:
NYLJ, page 24 , col 3
Referred Statutes:
22 NYCRR Section 130-1.1-a
Summary:
Landlord brought a holdover proceeding against tenant. The landlord's attorney signed the verification annexed to the petition but did not sign the notice of petition. Tenant moved to dismiss the petition, alleging that it was jurisdictionally defective because the notice of petition was unsigned. The court denied tenant's motion to dismiss and the appellate court upheld the lower court's decision. The notice of petition was annexed to the petition and the landlord's attorney's signature on the verification satisfied the requirements of 22 NYCRR Section 130.


Case Caption:
In Re Artnor Realty Co. v. DHCR
Issues/Legal Principles:
Appellate Court upholds DHCR determination of rent overcharge and treble damages, because DHCR determination has a rational basis.
Keywords:
rent overcharge; Article 78
Court:
Appellate Division, First Department
Judge:
lower court judge: Hon. Helen Freedman
Date:
October 12, 1999
Citation:
NYLJ, page 23, col 5
Referred Statutes:
CPLR Article 78
Summary:
DHCR's rent administrator and then its Deputy Commissioner made a determination finding landlord liable for rent overcharge and treble damages. The DHCR made this determination because landlord improperly applied a vacancy increase, landlord did not provide adequate proof of improvements landlord allegedly made to the subject premises and for other reasons. The DHCR presumes that the overcharge is willful unless the landlord proves otherwise. In this case, the landlord did not present evidence that the overcharge was not willful and, therefore, the DHCR imposed treble damages. Landlord filed an Article 78 proceeding in the Supreme Court, New York County to challenge the DHCR's overcharge determination. The Supreme Court upheld the DHCR's determination. The landlord then filed an appeal. The Appellate Division, First Department also upheld the DHCR's determination, stating that DHCR's determination of treble damages "had a rational basis and may not be set aside."


Case Caption:
Matter of Walker v. DHCR
Issues/Legal Principles:
Supreme Court overturns DHCR order because DHCR did not give landlord an opportunity to respond to tenant's newly-presented arguments.
Keywords:
due process; DHCR
Court:
Supreme Court, New York County
Judge:
Hon. Justice Weissberg
Date:
October 13, 1999
Citation:
NYLJ, page 27, col 3
Referred Statutes:
NYC Admin. Code Section 26-405a; NYC Rent and Eviction Regulations Section 2208.13(a)
Summary:
This decision provides the reader with some understanding about how landlords may increase the rent of rent controlled tenants. Unlike rent stabilization, where the landlord simply offers the tenant a renewal lease, the landlord of a rent-controlled tenant may file an application for a rent increase with the DHCR once every two years. The application requires the owner to certify that all rent impairing violations and 80% of all other housing maintenance code violations that were placed one year prior to the effective date of the proposed increase have been corrected. (A rent-impairing violation is a violation that constitutes a fire hazard or a serious threat to the life, health or safety of tenants). In this case, there were three rent-impairing violations and nine non rent-impairing violations. The landlord certified that all of the violations had been corrected. The DHCR granted the owner's request for an increase on January 2, 1992. The tenant filed three separate applications to challenge the DHCR's order granting the increase and, in three separate orders, the DHCR's Director of the MBR unit upheld the DHCR's prior decision. In 1998, the DHCR decided to open up the entire matter for review. The DHCR focused on tenant's evidence that three of the non-rent impairing violations had not been corrected, as alleged by landlord. The DHCR did not inform the landlord that it had received this new evidence from tenant and did not give landlord the opportunity to comment on this information. The DHCR simply issued a determination denying the landlord's application. The Court held that the DHCR erred by making a determination without first giving the landlord an opportunity to respond. For this reason, the Court decided that the DHCR's determination was arbitrary and capricious. The Court annulled the DHCR's determination and remanded the matter to DHCR with directions to give the landlord an opportunity to respond to the tenant's evidence.


Case Caption:
Tan Holding Corp. v. Wallace
Issues/Legal Principles:
Tenants' overcharge complaint should not be limited to the four years prior to the date the landlord served the notice of petition and petition, because the landlord never filed initial registration statements and subsequent annual registration statements.
Keywords:
motion to renew; rent overcharge; attorneys' fees
Court:
Housing Part of the Civil Court, New York County
Judge:
Hon. Judge Hoffman
Date:
October 13, 1999
Citation:
NYLJ, page 27, col 4
Referred Statutes:
CPLR Sections 203(d), 213-a, 2221, 3017(a), 3025(b), 3026, and 5001(b); Multiple Dwelling Law Article 7-C; Emergency Tenant Protection Act of 1974, Section 5; Real Property Law Section 234; 9 NYCRR Sections 2523.1, 2525.4(b), 2525(a), 2526.1, 2528.3(b) and 2528.4; NYC Admin. Code Sections 26-511(c)(3), 513(b), 26-516 and 26-517(e); McKinney's Uncons. Laws Sections 8623, 8625, 8632(a)(1)(i) and 8632-a(e); DHCR Operational Bulletin 95-2
Summary:
Landlord brought a holdover (eviction) proceeding against three tenants, alleging that they are commercial tenants whose leases have expired. Both parties brought motions for summary judgment. The tenants asserted that their tenancies are residential and that they are protected by the Emergency Tenant Protection Act ("ETPA") of 1974. The Court agreed with tenants and dismissed the holdover proceeding against tenants. The Court determined that the tenants are protected by the ETPA of 1974 because the tenants paid for the renovations needed to convert their units from commercial to residential use, there are six residential units in the building, the building was constructed prior to 1974 and the building is not subject to any exemptions from coverage under the ETPA. (A summary of the court's earlier decision appears in the housing court decision summaries for the month of December 1998.) After a long hiatus during which the parties attempted to settle their differences, the landlord made a motion to renew its original summary judgment motion. The landlord hoped that when the Court reviewed certain new evidence, the Court would change its mind and grant the landlord's original summary judgment motion. (This would ultimately result in the eviction of the tenants.) In its motion to renew, the landlord argued, for the first time, that the tenants did not bear the cost of renovating their units, but that this cost was borne by landlord's predecessor-in-interest. Landlord then set forth the facts in support of its contention; tenant vigorously disputed the truth of landlord's allegations. The court denied landlord's motion to renew, explaining that a motion to renew may only be granted if the new evidence being introduced was unavailable at the time the original motion was made. Since the new evidence was available when the landlord made its original motion for summary judgment, the court denied the motion to renew. The court also granted the tenant's motion for attorney's fees and scheduled a hearing date to allow tenants' attorney to introduce evidence regarding fees. The court also found that the tenants' overcharge complaint should not be limited to the four years prior to May 1998 (the date the landlord served the notice of petition and petition). Since the landlord neither filed initial registration statements nor subsequent annual registration statements for the three units, the landlord cannot invoke the four-year statute of limitations to protect itself from an examination of rent history which is more than four years old. The Court therefore held that it could review rents billed and paid from the inception of the tenancies.


Case Caption:
In the Matter of Flagg Court Realty v. Joseph Holland
Issues/Legal Principles:
DHCR's rent overcharge order is upheld by Supreme Court and Appellate Division, Second Department.
Keywords:
rent overcharge; newly submitted evidence
Court:
Appellate Division, Second Department
Judge:
lower court judge: Hon. Belen
Date:
October 13, 1999
Citation:
NYLJ, page 29, col 4
Referred Statutes:
CPLR Article 78
Summary:
Tenant filed an overcharge complaint with the DHCR. The DHCR asked landlord to submit documentation about the rent from the base date (probably April 1, 1980) through the date that tenant took occupancy. Landlord failed to comply with DHCR's request and DHCR rolled back the rent and determined that tenant had been overcharged. Landlord challenged the DHCR's order but both the Supreme Court and the Appellate Division, Second Department upheld the DHCR's Order. The DHCR's determination was upheld because it was not arbitrary and capricious and had a rational basis. The appellate court also noted that the Supreme Court correctly refused to consider new evidence - the landlord should have presented this evidence to the DHCR.


Case Caption:
In the Matter of Anna Zdziebko v. New York City Housing Authority
Issues/Legal Principles:
NYCHA took appropriate steps to determine applicant's income and expenses and therefore its denial of application for public housing should not be overturned.
Keywords:
NYCHA; application for public housing
Court:
Appellate Division, Second Department
Judge:
lower court judge: Hon. Justice Barasch
Date:
October 13, 1999
Citation:
NYLJ, page 30, col 2
Referred Statutes:
CPLR Article 78; CPLR Section 5701(c)
Summary:
Applicant applied to The New York City Housing Authority ("NYCHA") for public housing. The NYCHA interviewer reviewed their application and found the income of applicant and her daughter "unrealistic," meaning that NYCHA suspected that income was being concealed because expenses exceeded income. Applicant denied income from any other source. NYCHA asked applicant to complete a certain form but this information still failed to explain the discrepancy between income and expenses. NYCHA conducted a home visit and found that applicant and her daughter were living in a two-bedroom apartment. At his point, applicant revealed that applicant had two boarders who paid half of the rent. This additional information still did not explain the discrepancy between expenses and income. A NYCHA hearing officer conducted a hearing and denied the application for public housing. (Presumably both the applicant and NYCHA were permitted to present evidence at this hearing). Tenant challenged NYCHA's finding by bringing an Article 78 proceeding in Supreme Court, New York County. The Supreme Court overturned NYCHA's determination, finding that NYCHA abdicated its duty to verify the petitioner's income. Therefore the Supreme Court remitted the matter to the DHCR to continue processing tenant's application for public housing. NYCHA appealed and the Appellate Division, Second Department reversed the Supreme Court's order, dismissed the tenant's Article 78 proceeding and reinstated NYCHA's determination that tenant is ineligible for public housing. The Appellate Division said that NYCHA's decision was rational and not arbitrary and capricious, NYCHA took appropriate steps to verify applicant's income and expenses and that the Court should not "substitute its judgment" for that of NYCHA.


New York Law Journal,
decisions for the week of October 4-8, 1999 (3 cases)


Case Caption:
Matter of Fisher Litchfield Co. v. DHCR
Issues/Legal Principles:
DHCR may deny an MCI rent increase if a rent reduction order is in effect.
Keywords:
MCIs; rent reduction
Court:
Supreme Court, Queens County
Judge:
Hon. LaTorella
Date:
October 6, 1999
Citation:
NYLJ, page 30, col 2
Referred Statutes:
9 NYCRR 2202.3(c); RSC 2522.4
Summary:
In 1988, a DHCR Rent Administrator granted the landlord's application for a building- wide rent increase (MCI: major capital improvement) based on the installation of a new boiler. The tenants filed an appeal (PAR) but inadvertently neglected to attach one rent reduction order involving hall windows and lobby furniture. The DHCR denied the tenants' PAR, but erroneously failed to note the existence of the rent reduction order and incorrectly ruled that the rent reductions were all restored before the MCI order went into effect. In 1989, the landlord filed a second MCI application based on new windows and the tenants again opposed the application. The DHCR granted the application on March 28, 1990, making the rent increase effective as of 1989. Several tenants filed a PAR on grounds that the landlord could not lawfully receive an MCI increase while there were rent reduction orders against the building. During the PAR, the case was remanded back to the Rent Administrator to determine if there were any "outstanding rent reduction orders" against the building. Outstanding at this time was the rent reduction order involving the hall windows and the lobby furniture. The owner sought to have this rent restored, claiming that these items were resolved. The DHCR granted the restoration of rent of this rent reduction order effective June 1, 1997. Once the owner had obtained a rent restoration order, the owner argued that the DHCR should grant its pending MCI increase regarding the new windows. When the MCI was granted the landlord argued that the DHCR could not have regarded the prior order as "outstanding" because DHCR had previously permitted an MCI increase for the installation of a new boiler. The DHCR ruled that it was not bound by the erroneous determination made in the earlier MCI case involving the boiler because it was mistaken when it ruled that there existed no rent reduction order.
The landlord appealed this decision in an Article 78. The Supreme Court held that the DHCR's decision was rational. The Rent Stabilization Code allows the DHCR to deny an MCI rent increase where there is a rent reduction order in effect. The same is applicable with rent controlled tenants. The court, further noted, that the DHCR did not show that its approval of an MCI increase for the boiler estops the agency from later finding that the rent reduction order was in effect. The order concerning the MCI increase did not cause the owner to changes its position to its prejudice. The Supreme Court therefore dismissed the owner's challenge.


Case Caption:
George v. Cohn
Issues/Legal Principles:
Husband occupying co-op apartment owned by wife and her parents had no landlord- tenant relationship with them and could be evicted as a licensee; Wife and parents are bound by divorce court's ruling regarding their current request in Housing Court to collect use and occupancy from the husband, even though the parents are not parties to the divorce action.
Keywords:
contiguous residence; marital residence collateral estoppel; use and occupancy
Court:
Civil Housing Court, New York County
Judge:
Hon. Douglas Hoffman
Date:
October 6, 1999
Citation:
NYLJ, page 27, col 4
Referred Statutes:
none cited
Summary:
The "landlord" in this case is the ex-wife, Ms. George, of the husband-occupant, Mr. Cohn. The premises are a co-operative apartment, #17D, owned by Ms. George and her parents. They moved into the apartment in 1982. They married in 1988. Mr. Cohn paid the maintenance for the apartment directly to the co-op corporation. In 1991, the couple moved into another co-op apartment, #3E, in the same building which they purchased. Until mid-1996, the couple and their two children lived primarily in 3E, while using 17D for storage, subletting or office space. When the marriage started to deteriorate, Mr. Cohn began living in 17D, and he continued to pay the maintenance on this apartment. Ms. George filed for divorce in 1996, and in that action sought to have Mr. Cohn pay maintenance, telephone, cable and electric bills until he vacated that apartment, and she asked the court to direct him to vacate the apartment. The judge in the divorce action, however, held that she and her parents had to evict Mr. Cohn in a Housing Court proceeding. In another order that judge stated his position that the husband did not have to pay mortgage payments for 17D but only maintenance and utility charges. The judge did not describe 17D as the marital home but simply referred to it as "where the husband currently lives."
The Housing Court judge rejected the husband's argument that he is a tenant of 17D. The judge determined that no landlord-tenant relationship existed because there was no agreement between the owners and the occupant as to the essential terms of the tenancy, including the payment of rent. Any payments made for maintenance to the cooperative were made during the course of the marriage when the parties themselves were affixing relative financial duties.
The husband also attempted to argue that 17D constitutes a part of the non-continuous marital residence consisting of apartments 17D and 3E. He pointed to the fact that his children reside with him in 17D when they stay with him and that he commenced occupancy during the marriage. The wife, however, argued that the Supreme Court's order must be adhered to. That order found that the wife could not try to evict the husband in the Supreme Court action, but rather that court directed her to bring a summary proceeding in Housing Court. Normally, Supreme Court would be the proper forum to evict a spouse from the marital home. However, the Housing Court judge ruled that in this instance the Supreme Court explicitly ruled that 3E is the marital home, and not 17D (the apartment subject to the eviction proceeding). Since there is no landlord-tenant relationship between the parties, the husband is a mere licensee of 17D and the licensee proceeding brought by the wife and her parents is not subject to dismissal on the grounds raised by the husband. Rather, the court granted the wife and her parents a judgment of possession against the husband.
The court, however, did not allow the wife to collect use and occupancy (i.e., rent) from the husband for his occupancy of 17D in any amount that exceeded the support payments that the Supreme Court judge ordered the husband to pay. This was because the Supreme Court judge denied the wife's application to make the husband pay the mortgage costs to 17D. The Supreme Court case is not over because a final determination on equitable distribution remains. But pending that determination, the Supreme Court already ruled on the husband's payments and the Housing Court judge refused to interfere with that decision due to the legal concept of collateral estoppel. In a nutshell this concept addresses whether a party had a full and fair opportunity to litigate an issue in any prior matter between the parties. The twist in this case is that the wife's parents were not parties to the divorce proceeding, yet with respect to their request that the husband pay use and occupancy, Judge Hoffman is holding them to the decision in the Supreme Court case. In analyzing appellate case law, he determined that the parents held a "representative relationship" to their daughter in the divorce action and are thus bound by the outcome therein. They had their "vicarious day in court." The court further justified its decision by holding: "Utilization of collateral estoppel is especially compelling in the instant case as a de novo consideration of the use and occupancy issue in this Housing Court proceeding could result in a determination directly conflicting with that of Supreme Court and could upset the delicate balancing in which that court must engage concerning the relative finances of the Husband and Wife . . ."


Case Caption:
Jenkins v. DHCR
Issues/Legal Principles:
Same issues litigated in Housing Court cannot be later raised at the DHCR.
Keywords:
collateral estoppel
Court:
Appellate Division, First Department
Judge:
lower court: Hon. Diane Lebedeff
Date:
October 4, 1999
Citation:
NYLJ, page 26, col 5
Referred Statutes:
CPLR Article 78
Summary:
The owner concluded its nonpayment proceeding against the tenants, the tenants answered by interposing affirmative defenses and counterclaims alleging the owner's failure to annually register the apartment with DHCR, rent overcharges and the failure of the landlord to pay the annual rent stabilized apartment fee. The civil court heard the tenant's claims and rejected the claims. The tenants apparently attempted to relitigate these same issues in a DHCR proceeding which they apparently initiated. The court rejected the tenants' efforts to relitigate the same claims in a different forum when the issues were already decided elsewhere.


Case Caption:
Digeso v. Kennedy
Issues/Legal Principles:
Four year statute of limitation on overcharges relieves landlord from compliance of 1992 stipulation where landlord agreed to adjust the overcharge rent in DHCR registration statements.
Keywords:
month to month tenant; laches; managing agent; registration statement
Court:
Civil Court, Queens County
Judge:
Hon. B. Greenbaum
Date:
October 6, 1999
Citation:
NYLJ, page 30, col 4
Referred Statutes:
Multiple Dwelling Law 325; Administrative Code of the City of New York 27-2107, 2535.2 ; RSC 2522.6
Summary:
Landlord brought a nonpayment proceeding for rent at $500 per month for the periods August, 1997 to August, 1999. Tenant raised a number of defenses, including that there was no lease, so therefore there was no landlord-tenant relationship. The court instantly rejected this argument noting that there does not have to be a lease for such a relationship to exist. The tenant paid $500 per month and this oral agreement sufficed to make tenant a month to month tenant. The tenant also claimed that the apartment she resides in was listed with the rent stabilization board as owner occupied and that no rent is listed for that apartment. The owner, however, argued that there are two apartments on the second floor and the one denominated owner occupied was not the one that the tenant lived in. The judge sided with the owner because a co-tenant present in court did not testify and the court regarded his silence in a negative light toward the tenant's credibility.
A third issue raised by the tenant involved the fact that in 1992 there was a stipulation between the parties wherein the owner agreed to adjust the rent for the apartment with the Rent Stabilization Board. The owner admitted that it did not comply with the stipulation, but argued that four years have passed and thus whatever the landlord promised to do in the 1992 stipulation regarding an overcharge is no longer obligatory because of a four-year statute of limitations on overcharge claims. The court held that the Code allows a landlord or a tenant to present to the DHCR any dispute over the rent. The court faulted the tenant for not raising this issue with the DHCR during the past 7 years. This court, in an unabashed one-sided manner, ruled; "Tenant failed to do so, and to assert as attorney for the tenant does at this time that it was totally the landlord's responsiblity based on the prior so ordered stipulation has no foundation in law." The court ruled that tenant was guilty of laches (i.e., excessive passage of time) for failing to hold landlord accountable, such as, by moving to hold landlord in contempt for failing to comply with the stipulation.
Tenant's final argument was that landlord failed to properly register the building, particularly failing to list the registered managing agent. The court recited the purpose of the law for registration of a managing agent which is to have someone tenants and government agents can readily contact as the person responsible for any health, safety and construction hazards encountered in the building. Instead of holding the landlord accountable for this statutory duty, the court held that the tenant failed to prove that there were health or safety problems in the building. The managing agent did not even reside in the city during a period of time in which rent was sought. But this defect was cured prior to trial and the court did not dismiss the petition on this ground.
Notes:
In reviewing this case, it seems like it didn't matter what issues the tenant raised, this judge was bound and determined to hold for the landlord.


Case Caption:
Marrocco v. Lugero
Issues/Legal Principles:
Although nonpayment petition is not dismissed, landlord is not allowed to collect rent for the period in which two family house is illegally leased as three family house.
Keywords:
certificate of occupancy, multiple dwellings; registration; stipulation; jurisdiction
Court:
Civil Court, Richmond Court
Judge:
Hon. Straniere
Date:
October 6, 1999
Citation:
NYLJ, page 31, col 2
Referred Statutes:
New York City Civil Court Act 110, 203, 204; CPLR 2104, 3211(a)(7), 4401; New York City Administrative Code 27-266 (Building Code), 27-2097(b), 27-2107(b); Multiple Dwelling Law 2, 3(4), 301, 302(1), 325(2); Business Corporation Law 1312; RPAPL 1301, 711; 22 New York City Civil Court Rules 208.42
Summary:
Landlord brought a nonpayment proceeding against tenant, and tenant moved to dismiss on grounds that the building is registered as a two-family dwelling when in fact it is occupied by three families which makes it a multiple dwelling. The landlord argued that the basement tenant has now vacated. However, the landlord did not register the building as a multiple dwelling nor did it plead this fact in the petition. The landlord argues that even if this is all true, the tenant's apartment is legal, a fact which should preclude the tenant from challenging the multiple dwelling status of the building. The court rejected the tenant's argument that the court lacked jurisdiction over the proceeding due to the petition's failure to plead multiple dwelling status. The court held that this defense, even if true, does not strip the court of jurisdiction to entertain the case because the legislature empowered the Housing Court to deal with summary proceedings for the recovery of real property, which is precisely what this case addresses.
The tenant had actually defaulted in this proceeding, but obtained an order to show cause to vacate the default. A stipulation was entered into wherein the tenant agreed to give up the apartment on a certain date with a modest waiver of some rent. Tenant thereafter retained legal aid and those attorneys argued that, notwithstanding the stipulation, the petition should be dismissed because of its failure to plead the multiple dwelling status of the building even though the basement tenant did not move out until after the stipulation was signed. The tenant argued that since the illegal basement tenant existed when the proceeding began, the building was a multiple dwelling and absent a correct certificate of occupancy indicating that it is a multiple dwelling the law provides that no rent may be collected. The court, however, closely examined the language of Multiple Dwelling Law 302(1)(b). It provides that no proceeding shall be "maintained" for the collection of rent if there is not a proper certificate of occupancy. The court distinguished between commencing an action for rent and maintaining an action for rent. Since the illegal basement tenant departed during the course of the proceeding, the court refused to dismiss the petition. The illegality existed at the inception of the proceeding, but this is not enough to cause the dismissal of the petition at this stage. The court held that since the Multiple Dwelling Law was designed to assure residents of safe housing, if the landlord obtains a certificate of occupancy or ends the illegal conditions before the resolution of the summary proceeding, the landlord should be allowed to collect rent.
The court, however, was concerned that a landlord not be allowed to flaunt the law. It was for this reason also that the court did not accept the tenant's position that the case should be dismissed. How, the court reasoned, was it to monitor and ensure the owner's compliance with illegal conditions if the court dismissed the case and allowed the landlord to walk out the door without correcting the violations? The court thus refused to dismiss the petition, but at the same time it challenged landlord's demand for the rent. The court rejected landlord's position that the tenant should not be able to challenge the certificate of occupancy provisions of the Multiple Dwelling Law because this tenant's unit was perfectly legal; it was only the basement tenant's apartment that was illegal. The court interpreted the law to mean that the prohibition of collecting rent applied to all units in any building lacking a certificate of occupancy, and not just to the illegal unit. The court noted that another judge regarded the strict compliance of the multiple dwelling laws on small owners as onerous. But this court noted that they should be made to comply with the multiple dwelling laws just like landlords of actual multiple dwellings. This is because these owners are renting illegal, unaccounted for, apartments which bring more people to the community, more over-crowded schools, more lack of parking. The court regarded the penalty for failure to register as a multiple dwelling to be the denial of a right to recover the rent for the period of noncompliance. The court refused to vacate the stipulation which meant the tenants were still obligated to vacate the apartment as they had agreed to do. However, the court modified the monetary judgment so that the tenants were only liable for rent accrued after the landlord corrected the illegal condition, i.e., after the illegal basement tenant vacated the building.