Housing Court Decisions February 2000
Editors: Colleen F. McGuire, Esq., Chief Editor
Linda Rzesniowiecki, Esq. and Robert E. Sokolski, Esq.

Return to current month
Return to main index
Return to 2000 index


New York Law Journal,
decisions for the week of February 21-25, 2000 (9 cases)


Case Caption:
Zeiss v. Hickman
Issues/Legal Principles:
Even though landlord's renewal lease offer in October, 1997 was apparently ignored, once landlord made second offer in April, 1998, tenant was entitled to 60 days from the latest lease renewal offer to sign the lease.
Keywords:
renewal lease; attorneys fees
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Douglas Hoffman
Date:
February 23, 2000
Citation:
NYLJ, page 28, col 3
Referred Statutes:
RSC 2523.5(a)
Summary:
Landlord sought to evict tenant for failing to execute a renewal lease. The matter was settled wherein landlord reserved a right to seek legal fees. The record indicates that there had been previous litigation regarding the proper amount of a rent increase based on certain renovations made to the apartment. That matter was eventually resolved and thereafter the landlord offered tenant a renewal lease on April 9, 1998. However a notice of termination was served on April 28, 1998 purporting to terminate the tenancy as of May 16, 1998. The lower court ruled that tenant was not given the statutory required 60 days to sign the renewal lease. The appellate court agreed that the proceeding was brought prematurely and therefore the landlord should not be accorded the status of a prevailing party for the purpose of recovering legal fees. Although a previous lease had been offered in October, 1997, the Appellate Term held that the second offer in April superseded the October offer and that the tenant was entitled to 60 days from April to respond to the most recent renewal offer.


Case Caption:
2041 Fifth Avenue Tenants Assn. v. Barker
Issues/Legal Principles:
Succession rights are not available in TIL buildings.
Keywords:
TIL program
Court:
Civil Court, New York County
Judge:
Hon. Peter Wendt
Date:
February 23, 2000
Citation:
NYLJ, page 29, col 5
Referred Statutes:
RPL 226-b; RPAPL 743, 753
Summary:
The petitioner is the net lessee of the building owned by New York City Department of Housing Preservation and Development ("HPD"). Petitioner manages the building pursuant to the Tenant Interim Lease Program ("TIL"), a city program wherein low income tenants purchase their units. Petitioner brought a proceeding against the tenant on grounds of unlawful subletting and claims that the tenant of record is currently residing in a nursing home. An answer was put in by Keith Lawrence, the tenant's grandson, who claimed to have succession rights. The court held, citing a long line of cases, that TIL buildings do not provide for succession rights. Further, to achieve succession rights, the applicant must show an ongoing physical nexus with the apartment. The court noted that this applicant submitted zero documentation connecting him to the apartment. The court noted that if a party does not submit a responsive pleading (i.e., an answer) to the petition, or appear in court, the absence thereof is deemed an admission of all the statements contained in the petition. The prime tenant did not appear, nor did Mr. Lawrence call her as a witness. The landlord asked the court to draw a negative inference from the tenant's absence from the entire proceedings. The court denied the grandson's request and granted landlord a judgment of possession with a thirty day stay of the warrant of eviction.


Case Caption:
Matter of Lyndonville Properties v. DHCR
Issues/Legal Principles:
Landlord found to have overcharged a rent stabilized tenant on her garage space since a garage may qualify as an ancillary service to a rent stabilized lease where there is common ownership of the building and garage.
Keywords:
required service; garage space; overcharges
Court:
Supreme Court, New York County
Judge:
Hon. Figueroa
Date:
February 23, 2000
Citation:
NYLJ, page 29, col 2
Referred Statutes:
RSC 2520.6(r)(4)(xi); RSL 26-5121(c)(5)
Summary:
Tenant leased garage space since 1971. She filed an overcharge with the DHCR claiming that the increases in the garage rent were raised more frequently than lawful guideline increases for stabilized leases. The landlord argued that the garage space was not a required service under the Rent Stabilization Code, and that the garage was not intended for primary use by its building tenants and that the majority of the garage lessees were non-residents, and that the garage was constructed after the tenant took occupancy in 1959. DHCR ruled that the landlord had overcharged the tenant and further ruled that garage space is a required service under the Rent Stabilization Code. Prior case law has held that where there is common ownership of a rent stabilized building and a parking garage, that a parking space may be a required service, and in this case there was common ownership. Further, the Code definition of required services expressly includes garage facilities as an ancillary service. The DHCR focussed its inquiry on the location of the garage and its proximity to the building, which provided direct entry and egress to the garage, indicative that it was intended for use by the building's tenants. On landlord's appeal, the Article 78 court upheld DHCR's analysis and denied the landlord's appeal.


Case Caption:
Jones v. West
Issues/Legal Principles:
Landlord's acceptance of rent from the tenant after commencing and discontinuing three prior eviction proceedings against her constituted a waiver of its right to sue a third time on the same ground during the period rent was collected.
Keywords:
waiver; nuisance; overcrowding
Court:
Civil Housing Court, Kings County
Judge:
Hon. Kenneth Bedford
Date:
February 23, 2000
Citation:
NYLJ, page 31, col 2
Referred Statutes:
CPLR 3211(a), 3212, 408
Summary:
Landlord brought a holdover proceeding on grounds that tenant had committed a nuisance and breached a substantial obligation of the lease. The tenant sought to dismiss the proceeding, or alternatively, seek discovery. The tenant argues that the landlord waived the right to object to the tenant's conduct because it accepted rent all along. The general rule is that the acceptance of rent with knowledge of conduct violative of the lease constitutes a waiver by the landlord of the default, even if the lease contains a nonwaiver provision. The acceptance of rent is in effect an election by the landlord to continue the relationship of landlord and tenant, and thus waives the alleged wrongful conduct. In this case the landlord had served three prior holdover proceedings against the tenant on the same or similar grounds. The notices to cure in those proceedings were similar to the allegations made in this proceeding, and thus demonstrated that the landlord was aware of the alleged offense conduct, but continued to accept the rent from the tenant. All three prior cases were discontinued without explanation. The court held that nothing in the scant record controverts the inference of petitioner's knowledge of respondent's conduct. The court, however, rejected a waiver argument for any rent paid after March 31, 1999 because the tenant could not demonstrate that the landlord accepted rent after this period.

The landlord also argued that the tenant was overcrowding the apartment with too many occupants. The court pointed out that an overcrowding case must at a minimum state the ages of the occupants (since children below a certain age are not included in the square footage calculations). The court also noted that a court proceeding cannot be brought in the absence of a finding of overcrowding by an agency or City department. The court rejected landlord's overcharge claim.


Case Caption:
Matter of Car Barn Flats Association v. DHCR
Issues/Legal Principles:
DHCR rule which was implemented without soliciting public commentary and without explaining its change from prior policy is invalid.
Keywords:
electrical metering; rule making; Section 8
Court:
Supreme Court, New York County
Judge:
Hon. Joan Madden
Date:
February 23, 2000
Citation:
NYLJ, page 28, col 5
Referred Statutes:
RSC 2522.4(d); State Administrative Procedure Act section 102, 202(1)
Summary:
The tenants appealed the DHCR's decision directing the owner of the building to cease providing electric service and to convert the electric usage to individual electric metering. Although the tenants do not object to individual metering, they object to the change in the method of computing from a three step process to a single step fixed schedule for determining rent adjustments for buildings converting from master to individual metering permits that this constitutes a diminution of services without commensurate rent adjustments. DHCR failed to consider the rulemaking mandates of the State Administrative Procedure Act when it rendered this decision. Four pre-war buildings are involved, each containing about 25 apartments. The building owner supplied and paid for the electricity. From 1974 to 1984, the New York City Rent Guidelines Board had special rent increases for electric inclusion buildings. The electric increases form part of the tenants' base rent.

On November 3, 1997, the owner applied to the DHCR to terminate owner supplied electric service and convert to individual metering. On February 24, 1998, the DHCR Rent Administrator permitted the conversion and applied the schedule of rent decreases outlined in its Operational Bulletin 96-2 which is what the tenants now challenge. Before the Operational Bulletin went into effect in 1996, DHCR had a three-step method for calculating the rent reductions based on the conversion. Thereafter a single step reduction was effected based on fixed schedules derived from the federal Section 8 program. The old method resulted in a larger decrease in rent than the current method. However, the old method had previously been challenged in another case and found to be irrational which led to DHCR changing its calculation method.

The tenants argue that the current system is arbitrary and capricious since the Section 8 subsidy conversion tables do not take into account the electrical inclusion allowance rent increases which were levied solely to compensate landlords for electric costs. The tenants argue that by eliminating the 6.6% reduction, the fixed schedule fails to compensate tenants for the percentage increases previously granted based on the electrical inclusions. Using statistics and data, the tenants argue that the 6.6% reduction prevented the owners from collecting a windfall in rents and its elimination creates unjustified retention of prior increases to the landlord. The tenants also argued that the Operational Bulletin violates the State Administrative Procedure Act (SAPA). The Court of Appeals has determined that an agency policy falls within the scope of SAPA when it is a "fixed, general principle to be applied by an administrative agency without regard to other facts and circumstances relevant to the regulatory scheme of the statute it administers." A rigid numerical policy which is applied across the board to all without regard to individualized circumstances or mitigating factors makes it subject to the definition of a "rule" for SAPA purposes. The court ruled that the one-step method satisfies this SAPA definition.

The court, however, also found that prior to its adoption of the Operational Bulletin, the DHCR failed to submit the proposed rule to the public so that all affected parties would be given a period of time to submit comments. DHCR's failure to undertake this required process rendered the rule invalid. The court ruled that the matter must be sent back to DHCR for SAPA compliance. The court held that DHCR was required to justify both its change in the rule from the three step method to the single step fixed schedule and the elimination of the electrical inclusion allowance. DHCR offered no justification or explanation for its departure from its prior practice, stating only that the intent was to insure that the rent decreases reflect the cost of electricity and that this was not inconsistent with the Rent Stabilization Code and Law. Absent justification of the change, the Operational Bulletin is invalid. Further, the court held that DHCR cannot for the first time at the Article 78 appeal stage advance the reasons justifying its change. The court concluded that had DHCR submitted the proposed rule for publication and afforded the public and all affected parties a period of time to submit comments, as SAPA requires, DHCR would presumably have explained its new policy during that comment period so that a record would exist to be examined in determining whether there was a rational basis for the change.


Case Caption:
Franpearl Equities Corp. v. Kent
Issues/Legal Principles:
Loft tenants are not entitled to nonrenewal of lease notice if the loft has not yet come into the rent stabilization scheme.
Keywords:
lofts; horizontal multiple dwelling; nonrenewal notice; discovery
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Douglas Hoffman
Date:
February 24, 2000
Citation:
NYLJ, page 28, col 2
Referred Statutes:
Multiple Dwelling Law 286(3)
Summary:
The landlord brought a holdover proceeding and a summary judgment motion against the loft tenants on grounds that they do not occupy the loft as their primary residence. Although the loft is registered as an interim multiple dwelling with the Loft Board, the loft is not as yet covered under the rent stabilization laws. Since the loft tenants are not yet rent stabilized tenants, the owner was not required to serve a notice of nonrenewal of the lease upon the tenants even if tenants' argument that their building constituted a "horizontal multiple dwelling" was true. The Appellate Term, which reversed the lower court, ruled that the tenants' request for discovery on the issue of horizontal multiple dwelling must be denied because it was only sought to support their nonrenewal issue, which was a futile issue in light of the loft's nonstabilized status.
Notes:
Perhaps the loft has not come into stabilized status because the landlord has not done all the renovations necessary to get the building up to Code and obtain a certificate. Only when that process is complete and the Loft Board issues a final rent order will the loft then come into the rent stabilization scheme. A horizontal multiple dwelling is when two buildings (one or both having less than 6 units) share so many commonalities that together they should be deemed as one, and in that manner could contain 6 or more units making the structure subject to rent stabilization. This would appear to be an independent ground which could confer stabilization status to the tenantsþindependent from being subject to rent stabilization as a result of being a loft. If the tenants were not covered by the Loft Law, they might have a viable horizontal multiple dwelling argument, and in that context, they should have been served a notice of nonrenewal. The Appellate Term, however, would not allow the tenants to engage in discovery to determine the viability of their horizontal multiple dwelling defense. This seems quite unfair, unless of course the tenants made just a bald allegation of this defense, with little or no evidence to demonstrate a possibility that this defense is genuine.


Case Caption:
Berdar Equities Co. v. Konrad
Issues/Legal Principles:
Tenant cannot disclaim responsibility when her subtenant sublet the apartment to third parties because the tenant herself set the sublet situation in motion.
Keywords:
subtenant
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Howard Malatzky
Date:
February 24, 2000
Citation:
NYLJ, page 28, col 2
Referred Statutes:
RPL 226-b
Summary:
Landlord brought a motion for summary judgment in its action against the tenant based on illegal subletting. Tenant argued that the apartment was sublet by third parties without her knowledge. The record indicated that the tenant engaged a broker to locate a subtenant, and "cannot now disclaim responsibility for a process that she original set in motion." Moreover tenant failed to deny accepting rent pursuant to the sublease. In this context, the lower court and Appellate Term found tenant's "I didn't know" defense unavailing. It was the tenant's obligation to remove an illegal subtenant, or else forfeit the lease.
Notes:
Normally a tenant is allowed to cure an unlawful sublet, which means the tenant must remove the subtenant within ten days after the landlord obtains a judgment against the tenant on this ground. Apparently, this tenant was unable to cure within the time period and this would mean she loses the apartment.


Case Caption:
GSL Enterprises v. Williams
Issues/Legal Principles:
A petition which alleges both rent stabilization and rent control status is an amendable defect and does not result in the petition's dismissal.
Keywords:
petition; pleadings
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Arlene Hahn
Date:
February 24, 2000
Citation:
NYLJ, page 28, col 2
Referred Statutes:
none cited
Summary:
The apartment is rent stabilized, but the landlord's petition incorrectly also alleged that it was a rent controlled apartment. The lower court directed that the additional paragraph stating rent control be deleted to cure a nonjurisdictional defect. The Appellate Term upheld on grounds that this was not a case where the petition falsely alleged that the premises was not subject to rent regulation, as happened in MSG Pomp Corp. v. John Doe 185 AD2d 798.


Case Caption:
18-62 Realty Corp. v. Levy
Issues/Legal Principles:
Tenant's use of another apartment on her floor for storage did not create a tenancy.
Keywords:
storage; license
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Dianne Renwick
Date:
February 24, 2000
Citation:
NYLJ, page 28, col 2
Referred Statutes:
RPAPL 713(7)
Summary:
The lower court held that tenant's usage of the other apartment on her floor for temporary storage space was by license, and did not constitute a landlord-tenant relationship for that apartment. As such, her usage was revocable at the landlord's will. Tenant's had previously lost her actual apartment for failure to clear it of junk and provide access to the landlord to do repairs. (See Housing Court Archives for the week of December 14, 1999).


New York Law Journal,
decisions for the week of February 14-18, 2000 (6 cases)


Case Caption:
87-37 Bay Owners Corp. v. D'Angelo
Issues/Legal Principles:
Tenant who was excluded from cooperative apartment in divorce may still raise warranty of habitability defense to nonpayment summary proceeding even though tenant did not occupy the premises during the relevant time period.
Keywords:
warranty of habitability; abatement; occupy apartment
Court:
Civil Housing Court, Kings County
Judge:
Hon. Bedford
Date:
February 16, 2000
Citation:
NYLJ, page 31, col 4
Referred Statutes:
RPL 235-b
Summary:
Residential cooperative corporation commenced nonpayment summary proceeding against tenant, seeking unpaid maintenance. The respondent, who was excluded from the premises in a divorce action in which the court gave sole possession of the apartment to respondent's wife, interposed a defense of the corporation's breach of the warranty of habitability. The corporation opposed the defense, arguing that respondent was not entitled to an abatement of maintenance charges due to the fact that respondent had not been in possession of the apartment during the period in question. The corporation cited significant case law holding that a tenants and proprietary leaseholders were not entitled to rent or maintenance abatements or period in which they were not in possession of their apartments.

Distinguishing prior case law cited by the cooperative corporation, the Court disagreed and held that under the circumstances, the respondent was entitled to an abatement of maintenance charges. The Court noted the other cited cases involved the court's aversion to tenants seeking to profit from Real Property Law section 235-b, which was intended to provide a remedy for unhealthy or hazardous conditions suffered by residential tenants. In prior cases, purchasing tenants of cooperatives were denied the opportunity to reduce their maintenance in vacant investment units or receive a windfall by collecting full rent from their subtenants and then receiving an abatement in maintenance by virtue of RPL 235-b.

However, in this case, the Court found that disallowing the respondent to claim an abatement in maintenance would do as much offense to the purpose and intent of the warranty of habitability statute as to have granted an abatement in the prior cases. Moreover, the result would be to grant the corporation a windfall, where conditions affected the respondent's wife, who lived in the unit and testified as to the conditions. While the Court found that the landlord corrected most of the conditions complained of, which were settled per stipulation in a prior action, the Court did award respondent an abatement in the amount of $1,000.00 for other defective conditions.


Case Caption:
Spring Creek Associates, LP v. Williams
Issues/Legal Principles:
Landlord found not to have waived timely payment of rent by accepting bi-weekly DSS checks for six (6) years, where landlord continued to bring nonpayment summary proceedings against tenant to enforce lease provisions.
Keywords:
waiver; estoppel; timely payment; acceptance of rent
Court:
Civil Housing Court, Kings County
Judge:
Hon. Jimenez
Date:
February 16, 2000
Citation:
NYLJ, page 31, col 2
Referred Statutes:
CPLR 3001; 22 NYCRR 130.1-1
Summary:

Landlord brought nonpayment summary proceeding against tenant, seeking unpaid rent from August, 1999 through September, 1999. The tenant answered, stating that the rent was being paid by the Department of Social Services ("DSS") directly to the landlord. The tenant sought to vacate a stipulation entered into in a prior action by the landlord, and for a determination that the parties conduct waived the lease provision requiring payment of rent on the first day of the month. The tenant argued that the landlord's acceptance of bi-weekly payments from DSS over the course of six years constituted a modification of the lease, which required timely payments.

Noting that in some circumstances, a landlord's waiver may be inferred from acceptance of rent with knowledge of a tenant's violation of the lease, the Court disagreed with the tenant, finding the landlord's commencement of seven nonpayment summary proceedings from 1995 through 1999 demonstrated the landlord's efforts to enforce, not waive, the terms of the lease agreement. The Court further rejected tenant's request for sanctions against the landlord and/or its attorneys.


Case Caption:
Chris Mac Co. v. Johnson-Ono
Issues/Legal Principles:
Appellate Term reverses direction for hearing to determine tenant's attorneys fees where prior trial court granted voluntary discontinuance to landlord, but preserved the right of either side to move for attorneys fees in the Order
Keywords:
attorneys fees; voluntary discontinuance
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Brenda S. Spears
Date:
February 16, 2000
Citation:
NYLJ, page 26, col 1
Referred Statutes:
CPLR 3217(b); RPL 234
Summary:
Trial Court granted landlord's application for voluntary discontinuance of two holdover proceedings against tenant, fourteen months after the actions were commenced. In a handwritten order, Judge Elsner ruled, "discontinued without prejudice to either side including respondent's rights to move for attorney fees." Judge Spears subsequently granted the tenant's motion to direct the landlord to pay legal fees for its discontinuance of the proceedings, and set the matter down for a legal fees hearing.

Landlord appealed the Order of Judge Spears, and the Appellate Term, First Department reversed, finding that Judge Elsner did not condition the landlord's voluntary discontinuance upon the payment of attorneys fees (a condition that the court may impose pursuant to CPLR 3217(b)). Rather, the majority decision found that Judge Elsner's decision merely postponed resolution of any viable claim for legal fees that either side may have possessed. Moreover, since the tenant did not rely upon an attorneys' fees provision in a lease, the Court found that the tenant failed to demonstrate a basis for an award of attorneys' fees.

In a sizable dissent, Justice Davis stated that the majority misconstrued the Order of Judge Elsner, which did not deny the tenant's claim for legal fees as a condition of the discontinuance, but deferred resolution of the issue, inasmuch as the landlord made the application for voluntary discontinuance verbally, and the tenant had no opportunity to submit a formal motion.

Notes:
In a case such as this, the tenant may still make an application to Judge Elsner to vacate and/or modify her original Order to direct that the landlord pay the tenant's attorneys fees as a condition of the landlord's voluntary discontinuance.


Case Caption:
In re Duell, LLC v. New York State Division of Housing and Community Renewal
Issues/Legal Principles:
DHCR decision on PAR denying landlord major capital improvement rent increase for defectively installed windows is upheld by Appellate Division.
Keywords:
major capital improvement; defective installation
Court:
Appellate Division, First Department
Judge:
lower court: Hon. Elliott Wilk
Date:
February 17, 2000
Citation:
NYLJ, page 28, col 2
Referred Statutes:
CPLR Art. 78
Summary:
Landlord brought an Article 78 proceeding, seeking to vacate a determination rendered by the DHCR on a Petitioner for Administrative Review ("PAR"), which reversed the rent administrator's decision to the extent that it granted the landlord's application for a major capital improvement rent increase, due to the defective installation of a substantial portion of the new windows for which the landlord sought the increase. The Supreme Court, New York County dismissed the landlord's petition.

On appeal, the Appellate Division found that the record before DHCR permitted the agency to determine reasonably and rationally that a substantial portion of the new windows were defectively installed and, as such, did not constitute a major capital improvement to the building justifying a major capital improvement rent increase.


Case Caption:
319 West LLC v. Cabreja
Issues/Legal Principles:
Landlord's statement as to predecessor owner's representation of legal rent was insufficient to raise a factual issue for trial, requiring modification of trial court's decision to grant partial summary judgment in tenant's favor and remand for trial on issue of treble damages.
Keywords:
legal rent; rent overcharge; conclusory hearsay
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Timmie Erin Elsner
Date:
February 16, 2000
Citation:
NYLJ, page 26, col 3
Referred Statutes:
NYC Admin. Code 26-517(e); NYC Admin. Code 26-516(a)
Summary:
Appellate Term modified an Order by the Civil Housing Court, New York County, to grant tenant summary judgment on his claim for rent overcharge. The Court noted that the filing of a late registration statement precludes a finding of rent overcharge only if the rent collected was otherwise lawful, citing NYC Admin. Code 517(e). Moreover, the Court found that the landlord's conclusory hearsay statement, that a predecessor owner represented that the legal rent was $155, was insufficient to raise a factual issue as to the legality of the rent collected. The Court found that the legal rent was $273.16 per month, as set forth in the 1992 registration statement, plus any subsequent lawful rent increases, citing NYC Admin. Code 26- 517(a). The Court remanded the issue of an award of treble damages for trial, which requires a finding of whether the overcharge was willful.


Case Caption:
319 West LLC v. Baylor
Issues/Legal Principles:
Landlord's reliance upon a review of "documentation discovered" after landlord obtained ownership/management of the subject premises for assertion of legal rent was insufficient to defeat summary judgment on rent overcharge claim.
Keywords:
legal rent; rent overcharge
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Timmie Erin Elsner
Date:
February 16, 2000
Citation:
NYLJ, page 26, col 4
Referred Statutes:
(none cited)
Summary:
In a companion case to 319 West LLC v. Cabreja, February 16, 2000, NYLJ, 26:1, the Appellate Term modified an Order by the Civil Housing Court, New York County, to grant tenant summary judgment on her claim for rent overcharge. The Court found that the legal rent was $199.56 per month, as set forth in the 1992 registration statement, plus any subsequent lawful rent increases. The Court further noted that the landlord's mere assertion that $525.00 per month is the lawful rent "based upon a review of documentation discovered by the [landlord] subsequent to [landlord] commencing ownership/management of the subject premises," was insufficient to defeat summary judgment on the overcharge issue.


New York Law Journal,
decisions for the week of February 7-11, 2000 (8 cases)


Case Caption:
Dearie v. Hunter
Issues/Legal Principles:
Appeals court rules that landlord's rent demand notice which may violate Fair Debt Collection Practices Act does not result in dismissal of nonpayment petition in Housing Court.
Keywords:
rent demand; Fair Debt Collection Practices Act; Spiegel Law
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Ruben Martino
Date:
February 7, 2000
Citation:
NYLJ, page 24, col 6
Referred Statutes:
Social Services Law 143-b(5); 15 USC 1692 et seq; RPAPL 711(2)
Summary:
The landlord brought a nonpayment proceeding and the tenant entered into a settlement stipulation without a lawyer, but thereafter obtained Legal Services. The lawyers argued that the settlement should be set aside and the petition dismissed because there were violations in the premises and the Social Services Law provides that a landlord may not collect rent under such circumstances. The attorneys also argued that the petition should be dismissed for violating the Fair Debt Collection Practices Act ("FDCPA") which requires, inter alia, a thirty-day notice to the tenant-consumer of a right to dispute the debt. The lower court dismissed the petition, but the Appellate Term reversed, holding that the matter should not have been dismissed, but rather have gone to trial with respect to the violations. The issue at trial would be whether or not violations existed so as to warrant the freezing of the proceeding until such time as the violations were corrected.

With respect to the FDCPA claim, the Appellate Term held that the lower court erred for dismissing the petition for "failure to comply" with the FDCPA (quotations marks by Appellate Term). The Appellate Term held that even assuming that the three-day notice violates the FDCPA, "the Act does not provide for or compel dismissal of state court special proceedings commenced by landlords because of alleged unauthorized `debt collection' practices by their agents or attorneys" (citing the Brooklyn Appellate Term case of Wilson Han Association, Inc. v. Arthur ) which is found in the Housing Court Archives for the week of July 6, 1999). The Court reinstated the nonpayment petition.

Notes:
The Appellate Term, Second Department in Wilson Han Associates, Inc. v. Arthur did not address the issue of preemption, but rather ruled that an FDCPA violation does not deprive the Housing Court of subject matter jurisdiction. Preemption means that federal law preempts or trumps state law and must be deferred to. The tenant's attorneys, Northern Manhattan Legal Services, specifically argued preemption in its briefs to the Appellate Term. For reasons unstated the Court refused to address the preemption issue (which is a real cop-out considering that preemption is the tenant's singular winning argument). Although it is true that the FDCPA does not specifically provide for dismissal of a Housing Court proceeding in New York State courts where a violation of the federal law exists, nonetheless federal law cannot be disobeyed. And if this notice violates federal law, this notice should not be permitted to be relied upon in any forum, including Housing Court. In any event, there are other ways that landlord attorneys can be forced to serve thirty-day rent demand notices to comply with federal law. Tenant attorneys are currently working on such strategies.


Case Caption:
Muller v. DHCR
Issues/Legal Principles:
Fair Market Rent Appeals are subject to four year statute of limitations like rent overcharge claims even if an improper or no initial rent registration was timely filed; The first rent stabilized tenant of a previous rent controlled apartment cannot file a Fair Market Rent Appeal challenging the initial legal registered rent if the prior rent controlled tenant received a vacancy decontrol order while residing in the apartment, rather than voluntarily vacating (or dying) in the apartment.
Keywords:
Fair Market Rent Appeal; decontrolled apartment; overcharges; statute of limitations
Court:
Appellate Division, First Department
Judge:
lower court: Hon. Sheila Abdus-Salaam
Date:
February 10, 2000
Citation:
NYLJ, page 25, col 3
Referred Statutes:
Rent Regulation Reform Act of 1993; RSL 26-504(a), 26-512(b), 26-516(g), 26-516(a), 26-513(e); CPLR 213-a; NYC Rent and Eviction Regulation 2200.2(f); RSC 2520.11(k)
Summary:
Tenant challenged the initial monthly stabilized rent established 10 years earlier with respect to a luxury 6 room apartment overlooking Central Park. In 1990 the tenants moved in under a vacancy two-year lease at an agreed upon monthly rent of $3,353. Since the apartment rents for over $2,000 per month and since the tenants' annual income exceeds the monetary threshold for deregulation under the Rent Regulation Reform Act of 1993, the apartment should be deregulated. The tenants argue, however, that the basis for the "initial registered rent" for the apartment was grossly inflated due to an earlier illegal and fraudulent nonprimary residence lease, and therefore their initial rent should have been under $2,000 (which would have made their tenancy subject to rent stabilization). Since that argument was not timely made, the tenants argued for the first time on appeal that they should have been deemed the first rent stabilized tenants which would have allowed them to file a Fair Market Rent Appeal ("FMRA") of the initial rent.

On September 30, 1994 the tenants filed an overcharge complaint with the DHCR challenging the initial rent registered on April 1, 1984 of $2,383.07 and questioned their 1990 rent. The apartment was decontrolled in 1980 on the ground that the prior rent controlled tenant did not occupy the premises as her primary residence. She vacated in 1980 and her last rent was only $484. Thereafter the landlord at the time leased the apartment for a two-year term to another tenant named Einbender for $2,167 per month, a rent which Einbender never challenged within the 90 day period to do so. In 1984, that landlord served and filed the Initial Apartment Registration with DHCR (as required at that time) using the then rent of $2,383 as the initial registered rent and continued thereafter to register the apartment. When the Einbender tenancy ended, the current landlord then leased the apartment to the Muller tenants (the petitioners in this case) at a monthly rent of $3,353, which conformed with the proper guidelines increase over the last rent. In 1994, the tenants filed the overcharge complaint stating that the prior landlord and Einbender entered into a "sweetheart deal" and claimed that as a result there was never a proper initial rent registration and that they should really be considered the first legitimate rent stabilized tenants, so therefore they are entitled to challenge the registration ten years later. The landlord proffered proof of service of the initial registration, and the DHCR accepted the validity of the service due to the documentation.

To support their position that illegality occurred, the tenants offered the affidavit of a Polly McCall who stated that when she rented her apartment in 1980 in this building, the landlord asked her to sign "a second residence lease" which she learned by "speaking with other tenants" was required of all tenants. She and other tenants challenged their rent back then and it was reduced and the tenants reimbursed for overcharges for almost $30,000. McCall stated that Einbender had also signed a second residence lease and that his rent did not square with applicable guidelines increases. It was alleged that Pennsylvania was Einbender's actual primary residence. (In other words, the "sweetheart deal" was: in exchange for allowing the tenant to maintain his primary residence in Pennsylvania, the tenant agreed to allow the landlord to register the initial rent at a grossly inflated rate, and in exchange for not challenging this initial rent, the tenant would not be evicted despite his noncompliance with the primary residence laws.) The landlord denied all charges of fraud, yet refused to produce a copy of Einbender's initial lease on grounds that the law limits an owner's requirement to maintain or produce records relating to rentals four years prior to the most recent registration statement, and that this particular law applies to FMRA cases.

On May 7, 1997, the DHCR denied the tenants' complaint on grounds that they were the second rent stabilized tenants and thus had no right to challenge the initial rent, which had been properly registered and duly served on the initial rent stabilized tenant, Einbender. The DHCR also ruled that even Einbender did not have a right to challenge the initial rent because the apartment had been decontrolled not for vacancy reasons but because the prior tenant did not occupy the apartment as her primary residency. The tenants filed a PAR challenging the finding that Einbender had been properly served with the initial registration and challenging the holding that an FMRA will not lie in the absence of vacancy decontrol. Their PAR was denied which led to their Article 78 to the Supreme Court. It was at the Article 78 level that the tenants explicitly made the argument that due to the prior fraudulent use of second residence leases, they and not Einbender, were the first rent stabilized tenants. The Supreme Court judge remanded the matter to DHCR for a hearing on Einbender's primary residence, the allegations of fraud, and the timeliness of the tenants' FMRA. The judge also found McCall's affidavit credible and found DHCR's decision that no FMRA may be filed as irrational. The Appellate Division reversed.

The Appellate Division ruled that occupancy of an apartment by a person not subject to rent control before the first rent stabilized tenant takes possession precludes that first tenant from being able to file an FMRA. In the prior cases relied upon by the Court, the rent controlled tenant's status had been litigated or determined by the DHCR and resulted in a decontrol order on grounds of nonprimary residency. Only after the DHCR decontrol order ensued did the former rent control tenant then vacate; in other words, the rent control tenant did not voluntary surrender the apartment, but rather did so pursuant to some kind of litigation. In these circumstancesþfacts identical to the tenant before Einbender's tenancyþthe Court ruled that no FMRA could be filed by the first rent stabilized tenant. Since Einbender could not have filed a FMRA, then certainly the Muller tenants cannot either.

Even though the case could have been thrown out on the "no vacancy decontrol, no FMRA" ruling alone, the Appellate Division went above and beyond that and decided to rule on the issue of whether an initial legal regulated rent could be challenged by a FMRA when the initial rent was registered more than four years before the most recent registration statement. This is the rule with respect to overcharge complaints after the passage in June, 1997 of the Rent Regulation Reform Act. The Court acknowledged that the DHCR does in fact treat overcharge complaints and FMRAs differently in various respects, but concluded that the Act's four-year rule also applies to FMRAs. The Court acknowledged that FMRAs have their own 90 day statute of limitation period (RSL 26-513) and that the 1997 Act did not amend RSL 26-513, but only amended the overcharge law (RSL 26-516) to provide for a four year limitation. There have been conflicting opinions in the lower court as to whether to apply a four-year limitations to FMRAs where the legislature did not explicitly amend that statute to do so. To resolve this dilemma, the Court pointed to RSL 26-516(g), the statute which provides that landlords are not obligated to maintain records beyond the last four years of the last rent registration, and this law "tellingly, omits any language limiting its application to overcharge complaints." The Court stated that the Legislature surely did not intend to limit a landlord's duty to provide records for one purpose (overcharge challenges) and not for another (FMRA challenges). If a landlord did not know in advance what rental challenges it would face, a landlord "would effectively be required to maintain records indefinitely, thereby rendering constant the hardship that the Legislature intended to correct." Hence, the Appellate Division held that the law providing that landlords are not required to maintain rent records beyond four years must apply equally to all rent challenges, including FMRAs.

Notes:
A "constant hardship" for a landlord company to maintain rent records beyond four years? Let's all weep for the landlords' burden. What kind of law allows a real estate company to throw away rental and lease records after a mere four years? Maybe the Appellate Division should consider the "constant hardship" of tenants and homeless people who have to scour to find or maintain affordable housing these days. With this decision, don't count on rent stabilization being around much longer. This decision is a green light for landlords to run amok with their records, let mercenary tenants and strawmen live (or pretend to live) in units for 90 days or four years at any rent imaginable, and the landlord would be off scott-free of any overcharges, FMRAs or even fraud claims. There were more than enough opportunities in this decision to rule that FMRAs are not applicable to a four-year limitation akin to overcharge claims. This court could have gone either way on this issue because there are also reasonable arguments to preclude the four-year rule's applicability to FMRAs. The political climate, however, is getting medieval, going back to the days when the lords of the land dictated the tenant/serfs' living conditions.


Case Caption:
Acunto v. DHCR
Issues/Legal Principles:
Appellate Division holds that DHCR is not required to follow Smitten in overcharge cases (Smitten held: if no initial rent registration is filed, tenant is only obligated to pay last rent controlled rent until such time as landlord so files).
Keywords:
Fair Market Rent Appeal; initial rent registration
Court:
Appellate Division, First Department
Judge:
lower court: Hon. Edward Lehner
Date:
February 11, 2000
Citation:
NYLJ, page 26, col 1
Referred Statutes:
RSC 2521.1(a)(1)
Summary:
The tenant apparently filed a Fair Market Rent Appeal which led the DHCR to establish a fair market rent in accordance with its own guidelines. An Article 78 appeal was made (presumably the appellant was the tenant) and the Supreme Court judge sent the matter back to the DHCR with instructions that the agency fix a fair market rent in conformity with the last rent controlled rent which in accord with a prior Appellate Division decision, Smitten v. 56 MacDougal Street (167 AD2d 205). The DHCR appealed to the Appellate Division and the decision was reversed. The tenant apparently argued that if the landlord did not file a rent registration of first rent stabilized rent, the tenant is only obligated to pay the last rent controlled rent, relying on the Smitten holding. The Court, however, now seems to be undermining Smitten. The Court noted that the Rent Stabilization Code "contemplated" the registered rent as "the rent agreed to by the owner and the tenant" and interprets this to mean "the rent negotiated at the start of the tenancy." The Court diverged from the Smitten rule by saying that Smitten involved a "judicial order resolving a rent dispute presented to a court in the first instance." By contrast, the DHCR has "its own formula to determine the regulated rent for the apartment" and that the court would/should defer to the DHCR's formula when this type of case initiates at the agency.
Notes:
This case should encourage tenants to avoid filing overcharge complaints at the DHCR where the Smittens rule is apparently not followed, and the Appellate Division does not expect or require the DHCR to follow Smittens. Whatever happened to consistency in the law? The Court's deference to the concept "the rent negotiated at the start of the tenancy" will surely please landlords since the balance of the negotiating power is in their hands, not tenants.


Case Caption:
Romero v. West 135th Street Corporation
Issues/Legal Principles:
Landlord's default in tenant's action to collect overcharges constitutes an admission of liability.
Keywords:
Fair Market Rent Appeal; defaults
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Cheryl Chambers
Date:
February 7, 2000
Citation:
NYLJ, page 24, col 6
Referred Statutes:
CPLR 4213(b)
Summary:
Tenant-plaintiff won a fair market rent appeal, but vacated the apartment after the award was rendered. The DHCR order held that she "may bring an appropriate action in a court of competent jurisdiction" if the owner failed to refund the excess rent collected within 60 days. The owner failed to so refund her money and this action ensued. The landlord failed to appear at trial. The Civil Court, without setting forth its findings, dismissed the complaint. The Appellate Term disagreed and reversed holding that by defaulting the landlord "admitted all traversable allegations in the complaint and thus conceded liability." The Court noted that plaintiff produced competent uncontradicted evidence to establish her damages and therefore granted plaintiff a judgment for $6,863.80.


Case Caption:
Matter of 14 L. Pierre Associates v. DHCR
Issues/Legal Principles:
Landlord's failure to produce proof that notice of initial rent was served on tenant defeats his challenge to tenant's overcharge complaint which was converted into a Fair Market Rent Appeal by the DHCR.
Keywords:
Fair Market Rent Appeal
Court:
Supreme Court, New York County
Judge:
Hon. Joan Madden
Date:
February 9, 2000
Citation:
NYLJ, page 27, col 2
Referred Statutes:
RSL 26-513, 26-517(e); RSC 2528.4, 2523.1;
Summary:
The first Rent Stabilized tenant of the apartment was Midori Akabane. In June, 1986, the second Rent Stabilized Tenant Finlay moved in and in 1987 he filed an overcharge complaint. During that proceeding the landlord argued that Finlay's rent was lawful because Akabane was served the DC-2 form notifying her of the right to file a Fair Market Rent Appeal ("FMRA") within 90 days. The landlord argued that since Akabane failed to challenge the initial Rent Stabilized rent, (a) her rent was the legal rent and (b) the increases in Finlay's lease were lawful. Therefore, Finlay had no overcharge complaint. The DHCR accepted the landlord's argument and dismissed Finlay's complaint. He filed an administrative appeal known as a PAR. It was not until 1997 that the PAR was determined and it, too, went against him. He filed an Article 78 and the matter was remanded back to the DHCR for all parties to submit additional evidence.

When the case was reprocessed, Finlay argued that he was entitled to a FMRA despite his status as the second rent stabilized tenant, since the landlord failed to submit any proof that Akabane was ever served the DC-2 form (which is what starts the 90 day period running). This time around the DHCR sided with Finlay since there was no affidavit of service, lack of a complete signature by Akabane (just her initials on the first page of the form) and lack of the second page of the form. The landlord's sole basis of appeal is that the DHCR should not have processed Finlay's complaint as a FMRA because DHCR did not promulgate the DC-2 form until 1987, i.e., before Akabane's tenancy. Since the landlord could not comply with rules not yet in effect, the landlord argued that the 1987 rent registration should be the proper notice. Since Finlay's rent overcharge complaint was filed more than 90 days after the registration, the DHCR should not have converted his overcharge complaint into a FMRA. The DHCR, however, explained to the judge that the DC-2 form was the form in use before the DHCR came into existence, when it used to be the Conciliation and Appeals Board (CAB). The DHCR continued to use this form even though the form referred to CAB rather than DHCR and the form used the words "initial legal regulated rent" as opposed to "initial legal registered rent."

DHCR and Finlay argue that the Landlord cannot first make this argument in an Article 78 appeal when it was never raised below. The court agreed that the landlord cannot present a new argument on appeal that was not made at the administrative level. The court rejected the landlord's argument that it couldn't have raised this position before because it had been the winner before the reprocessing phase. The court, however, noted that the landlord did submit the first page of the DC-2 form prior to reprocessing as evidence that the tenant had received the required initial legal registered rent advising her of her right to file a FMRA. In any event, after reprocessing the landlord could have raised this issue but chose only to submit evidence regarding how the rent should be calculated. Thus, the court concluded, the landlord's argument cannot be raised for the first time at the Article 78 level. The court went on to reject as meritless the landlord's argument that it could not have been in complaince with the old CAB forms. Finally, the court rejected the argument that the 1987 registered rent should prevail because it conflicts with the law requiring proof of service of the notice of the initial legal registered rent to enable the tenant 90 days to challenge same. A rent registration alone does not satisfy that criteria.


Case Caption:
City of New York v. Tillis
Issues/Legal Principles:
City agency would not make motion to appoint a guardian ad litem for the tenant due to conflict of interest with City landlord, so the court appointed one on its own motion.
Keywords:
guardian ad litem
Court:
Civil Housing Court, New York County
Judge:
Hon. Schachner
Date:
February 9, 2000
Citation:
NYLJ, page 29, col 4
Referred Statutes:
CPLR 1201; Code of Judicial Conduct 3A(4); NYC Civil Court At 110(c)
Summary:
The landlord City of New York brought a holdover against the tenant on grounds of alleged illegal sublet or assignment. The judge received a report from a psychiatrist who conducted an examination on the tenant at the behest of the New York City Human Resources Administration ("HRA"), Office of Health and Mental Health Services. The court notified tenant that it would determine whether or not the tenant needed a guardian ad litem, which is mandated if "the person is an adult incapable of adequately prosecuting or defending his or her rights." The court inquired if HRA would make an application to have a guardian ad litem appointed for the tenant. HRA, however, took the position that there is a conflict of interest since the landlord in this case is the City of New York and they are a city agency. Hence, the court felt constrained to make its own motion to appoint a guardian ad litem for the tenant in accord with the ethical canons which advocate that judges take into consideration the special needs of protecting incompetent litigants. The report found the 41-year old tenant to be "childlike," having "intellectual defects" and notes that he "cannot manage his own affairs" and is "unable to deal with this proceeding." Therefore the court appointed a guardian ad litem to act for the tenant in this proceeding.
Notes:
A guardian ad litem is not the same as a guardian appointed in Supreme Court. In the latter instance, the guardian is often given full powers over the person's finances, property and living situation. A full-blown hearing with expert testimony is required in Supreme Court before a guardian may be appointed, rather than just relying on a report.


Case Caption:
Noonan Towers Co. v. Osorio
Issues/Legal Principles:
Occupant who fails to prove that she and the tenant, her sister, lived together for two years before the tenant permanently vacated does not acquire succession rights.
Keywords:
succession rights; unlawful sublet
Court:
Civil Housing Court, Bronx County
Judge:
Hon. Anthony Fiorella
Date:
February 9, 2000
Citation:
NYLJ, page 29, col 4
Referred Statutes:
RSC 2523.5; RPL 226(b); CPLR 3126
Summary:
The issue before the court in a holdover proceeding was whether the tenant's sister acquired succession rights. The landlord eventually was able to depose the sister, but not the tenant who never appeared. The sister claimed she lived in the apartment since 1994, and that in the past three years, she lived with the tenant. She claimed that the landlord was aware of her presence because she signed the 1966 lease. The court, however, carefully examined the lease and discovered that she had inserted her name on to it and the landlord had deleted her name. The court further determined that the tenant was not living in the apartment at the time the lease was signed, but rather was living with her husband and children in upstate New York. The sister had zero documentation that she resided in the building for as long as she claimed to have lived there, according to the court. Moreover, a review of social service checks indicates that they were living at another address. The court concluded that the tenant vacated and the sister attempted to move at that time. Since there was no contemporaneous co-occupancy, the situation constituted an illegal sublet. The court awarded judgment to the landlord.


Case Caption:
Honeyman v. Collingwood
Issues/Legal Principles:
Daughter failed to show that she occupied her mother's apartment as her primary residence for the two years prior to her mother's permanent vacatur.
Keywords:
succession rights
Court:
Appellate Term, First Department
Judge:
Lower Court: Hon. Anne Katz
Date:
February 9, 2000
Citation:
NYLJ, page 26, col 2
Referred Statutes:
Rent Stabilization Code 2523.5(b)(1)
Summary:
The lower court held that the daughter of the tenant of record failed to establish succession rights to succeed to her mother's lease after her mother permanently vacated the rent stabilized apartment. The daughter failed to show it was her primary residence for two years before the mother left. This decision was upheld on appeal where the court noted that the testimony indicated that the daughter lived at the apartment on a sporadic basis, her B1/B2 visitor's visa restricted her residence to one year and required her to maintain a permanent residence in Sweden. Also, the daughter maintained an active personal checking account in Sweden and conducted a business as sole shareholder through her Swedish corporation, an entity not authorized to do business in New York.


New York Law Journal,
decisions for the week of January 31, 2000 to February 4, 2000 (3 cases)


Case Caption:
Strohli v. Polochik
Issues/Legal Principles:
Nine day delay in vacating premises pursuant to written stipulation bars tenant from receiving $500.00 moving fees; Tenant attorney sanctioned for failing to submit an affidavit from tenant and pursuing a frivolous motion
Keywords:
stipulation; sanctions
Court:
Civil Housing Court, Kings County
Judge:
Hon. Judge Marton
Date:
February 2, 00
Citation:
NYLJ, page 33, col. 2
Referred Statutes:
Rules of the Chief Administrator of the Court Section 130-1.1
Summary:
The landlord and tenant had entered into a written stipulation in which the tenant agreed to move out by May 31, 1999 and the landlord would waive $8,500 of rent arrears and pay the tenant $500.00. The tenant did not move out until June 9, 1999, and the landlord did not pay the tenant $500.00. Thereafter, the tenant's attorney moved for contempt of court because the landlord had not complied with the stipulation. The judge held that the landlord did not owe the tenant $500.00 because the tenant did not move out on time. The Court also found that the tenant's attorney who signed an affirmation stating that he/she believed that the tenant had moved out before May 31, 1999 but did not submit an affidavit from the tenant, should be sanctioned and fined $100.00.


Case Caption:
B&L Realty, LLC v. Liang
Issues/Legal Principles:
Lease provision does not allow landlord a judgment for attorneys fees even though it was the prevailing party because the landlord did not get actual possession of the apartment
Keywords:
attorney fees
Court:
Civil Housing Court
Judge:
Judge Samuels
Date:
February 2, 2000
Citation:
NYLJ, page 28, col 6
Referred Statutes:
RPL Section 234
Summary:
The landlord sued the tenant for non-payment and received a judgment for the outstanding rent. The tenant paid the judgment and was not evicted. The landlord then moved for attorney's fees. The lease provision provided that the "Tenant shall be responsible for Landlord's costs of re-renting. Landlord's cost shall include the cost of repairs, decorations, brokers fees, attorneys fees¬" The Court held that the landlord was not entitled to fees. In this case, even though the landlord prevailed on the rent claim, it did not take possession. The Court found that the landlord would only be entitled to fees pursuant to this lease provision where it took possession.


Case Caption:
124 MacDougal Street Associates v. Hurd
Issues/Legal Principles:
Default judgment and warrant vacated where a guardian was appointed pursuant to Mental Hygiene Law Section 81.04, because the tenant could not provide for her needs or protect her interests.
Keywords:
Guardian, vacate default
Court:
Civil Housing Court
Judge:
lower court: Hon. Bruce Sheckowitz
Date:
February 2, 2000
Citation:
NYLJ, page 28, col 4
Referred Statutes:
MHL Section 81.04
Summary:
The landlord commenced a nuisance holdover proceeding against an 82 year old woman. Protective Service Administration ("PSA") had been notified and informed the petitioner that the tenant was eligible for PSA's representation. However, PSA failed to appear in Court and a default judgment was granted and a warrant issued. Two months later, a Guardian was requested pursuant to Article 81 of the Mental Hygiene Law, and the Court appointed a guardian thereafter. The Guardian asked the Court to vacate the default judgment and warrant. The Court vacated the warrant and judgment finding that the Court has the inherent power to open a default judgment entered before or after the Guardian was appointed and that a default judgment against a party incapable of protecting his or her interests may be held to be unenforceable. The tenant also moved to dismiss the proceeding alleging that service on an individual incapable of defending her rights is invalid. The Court denied that portion of the motion finding that a person of unsound mind, but not declared incompetent, may sue or be sued. The court also noted that the landlord did serve copies of all papers on PSA.