Housing Court Decisions June 2001
Editors: Colleen F. McGuire, Esq., Chief Editor
Robert E. Sokolski, Esq., Catherine Grad, Esq. and David Weinraub, Esq.

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Significant Cases
500 West End Avenue v. Paleologos
302 Eastern Corp. v. Pack
Lemle v. Bascourt
595 Broadway Associates v. Bikman
Ram 1 LLC v. Mazzola
Matter of Schaper and Falck v. DHCR

New York Law Journal,
decisions for the week of June 25-29, 2001 (11 cases)


Case Caption:
500 West End Avenue v. Paleologos
Issues/Legal Principles:
Tenant who is absent from her apartment doing volunteer work in a Boston hospice does not lose her apartment on grounds of nonprimary residence since she never established a permanent residence at the hospice.
Keywords:
nonprimary residence
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Jerald Klein
Date:
June 29, 2001
Citation:
NYLJ, page 19, col 3
Referred Statutes:
none cited
Summary:
Landlord brought a nonprimary residence proceeding against the tenant who was absent extensively from the apartment for volunteer work done at a Boston hospice. The lower court held that the tenant did not relinquish her primary New York City residence and the Appellate Term agreed. At the hospice tenant had no permanent space and resided in a "cell-like room" and her furniture and clothing remained in New York. She returned to her apartment on a regular basis, received medical care here, maintained utility services and filed New York City income tax returns. Property in Easthampton was no more than a vacation residence.
Notes:
Tenant.Net has been informed that this case involved a landlord who was converting its building into condominiums and tried to evict this 80 year old tenant who had lived in her apartment for 50 years. She spent several days a month traveling to Boston so she could do volunteer work at a hospice for blind kids. After two years of trying to wear down the tenant because she wouldn't take a paltry buy-out and leave, it is gratifying to know that the tenant finally won and will recover her legal fees, too.


Case Caption:
Hollis Gardens Realty Corp. v. Stewart
Issues/Legal Principles:
Tenant who pays rent after the warrant of eviction issues is properly evicted and not entitled to be reinstalled in the apartment.
Keywords:
warrant of eviction
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower Court: not published
Date:
June 26, 2001
Citation:
NYLJ, page 20, col 1
Referred Statutes:
RPAPL 749(3)
Summary:
Tenant failed to pay the rent arrears before the warrant of eviction issued and therefore the lower court ruled that she was properly evicted. The Appellate Term upheld the eviction. Tenant claimed that after the eviction she tendered the rent arrears to the landlord and that he refused to accept them. But the court ruled that this does not warrant her reinstatement in the apartment. Indeed, this position by itself was insufficient even to constitute the good cause necessary to justify vacatur of the warrant before its execution.


Case Caption:
The Whitney Museum of American Art v. Dijxhoorn
Issues/Legal Principles:
Tenant claimed that constructive eviction was the reason she did not reside in the apartment for six years, but the court rejected this claim particularly since it was belatedly asserted.
Keywords:
nonprimary residence; constructive eviction
Court:
Appellate Term, First Department
Judge:
lower Court: Hon. Maria Milin
Date:
June 26, 2001
Citation:
NYLJ, page 18, col 1
Referred Statutes:
none cited
Summary:
Landlord brought a nonprimary residence proceeding and the lower court ruled that the rent controlled tenant did not maintain the apartment as her primary residence. The Appellate Term affirmed. The court observed that the tenant ceased living in the apartment before her husband's death in August 1993 and did not move back into the apartment until at least April 1994. Tenant's belated claim of constructive eviction as a justification for her six-year absence from the apartment following the death of her husband was not accepted by the lower court.


Case Caption:
Carroll Street Properties v. Johnson
Issues/Legal Principles:
DHCR overcharge proceeding which was dismissed, but not on the merits, does not warrant Housing Court's dismissal of overcharge claim raised by tenant in a subsequent nonpayment proceeding.
Keywords:
overcharge; lead paint; abatement
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower Court: Hon. D. Thomas
Date:
June 26, 2001
Citation:
NYLJ, page 20, col 1
Referred Statutes:
RPAPL 732(2) CPLR 5013; Administrative Code of the City of New York 27-2013(h), 27-2056
Summary:
The lower court denied tenant's overcharge claim. But the Appellate Term reversed stating that the record shows that the landlord collected rent at the rate of $750 per month for August and part of July 1996, yet the legal rent was only $489.94. Even though there was a previous DHCR overcharge case that was dismissed, its dismissal was not on the merits so the Housing Court was certainly able to hear the overcharge claim. The Appellate Term reinstated the claim.

Also, the tenants refused to move into the apartment because there was peeling paint and they had a two-year old child and were concerned about lead paint. For at least one month if not more the landlord refused to claim responsiblity for the repair. While the record indicates that the tenants may have delayed the completion of the repair, the court held that they are entitled to a total abatement for at least the period before the landlord began to undertake the repairs. The appellate court sent the case back to the Housing Court for a hearing on an abatement.


Case Caption:
Tuscan Realty Corp. v. O'Neill
Issues/Legal Principles:
Landlord's case should not have been dismissed where its witnesses properly authenticated tenant's signature on a 1985 lease and the business records rule allows an exception to the hearsay rule.
Keywords:
pets; evidence; business records rule; hearsay
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower court: Hon. Chin
Date:
June 27, 2001
Citation:
NYLJ, page 20, col 3
Referred Statutes:
CPLR 4518(a)
Summary:
Landlord brought a holdover proceeding against the tenant on grounds that the tenant allegedly harbored a pet in violation of the lease's no pet clause. The lower court dismissed the petition before the landlord was able to establish its prima facie case, apparently on grounds that the landlord was unable to authenticate the tenant's signature on a 1985 lease. The Appellate Term reversed, holding that the landlord did authenticate the signature by the testimony of its witnesses who expressed familiarity with the tenant's signature. The landlord produced a 1990 lease signed by the tenant and had it available in court to compare it with the 1985 lease's signature. The Appellate Term also held that the lower court erred in requiring the landlord to authenticate the prior owner's signature as a condition to admitting the lease into evidence. The only signature necessary to be authenticated was the tenant's of that prior lease since the prior owner was not charged with anything. Further, the business record rule should allow the lease into evidence as an exception to the hearsay rule. The lower court further erred by not granting the landlord a short adjournment to obtain certain documents. The dismissal should not have been without prejudice since it appeared that the proof which supports the prima facie case is available.


Case Caption:
Glen Oaks Village Owners Inc. v. Joseph
Issues/Legal Principles:
Nuisance termination notice dismissed for failure to state with particularity the specific dates and times when the alleged nuisance behavior took place.
Keywords:
nuisance; termination notice; sufficiency of facts
Court:
Civil Housing Court, Queens County
Judge:
Hon. Anne Katz
Date:
June 27, 2001
Citation:
NYLJ, page 22, col 3
Referred Statutes:
RSC 2524.3(b), 2524.2(b); CPLR 404
Summary:
Landlord commenced a nuisance proceeding against the tenants who moved to have the proceeding dismissed. The tenants argue that the termination notice is defective in that it fails to apprise them of the particulars of the nuisance allegations, such as the dates and times of the alleged occurrences. The court noted that case law requires that notices set forth the facts with particularity and not mere conclusions of facts and that the notice be specific and unambiguous. The notice in this case, according to the court, contains several conclusory statements in paragraphs 1-10 which state that nuisance complaints were made to the management. The notice provides the dates that management wrote to the tenants to inform them about the complaints. The notice, however, fails to particularize any facts such as the specific dates and times of the alleged nuisance occurrence and complaints or even to annex the actual letters to the termination notice. Therefore, the court found that the termination notice is fatally defective and requires the dismissal of the petition.


Case Caption:
ATM Four LLC v. Ramos
Issues/Legal Principles:
Landlord's failure to serve DHCR a copy of the termination notice of ETPA tenant's tenancy in Nassau requires petition's dismissal.
Keywords:
renewal leases; curable defects; service
Court:
District Court, Nassau County
Judge:
Hon. Reilly
Date:
June 27, 2001
Citation:
NYLJ, page 22, col 4
Referred Statutes:
Emergency Tenant Protection Act 2503.5, 2504.3(c)
Summary:
The landlord sought to recover the apartment on grounds that the tenant failed to timely renew her lease. The tenant, however, argues that the landlord failed to mail the notice of termination to the DHCR and failed to mail the renewal lease by certified mail, as required by the Emergency Tenant Protection Act ("ETPA"). At the hearing, the superintendent testified that he personally delivered the renewal lease to the tenant, and the property manager testified that the tenant returned the forms on the same day that the landlord served a 15 day notice of termination. The tenant, however, disputed the date on which the super delivered the forms. She said they were delivered the following day, the same day she was informed that her purported renewal lease was untimely. She was told she would be evicted if she did not execute a new lease, so she did, but the new lease agreement included a vacancy rate increase of 16% over her prior rent when it should have been increased by only 2%. The tenant also sought the case's dismissal on grounds that the landlord entered into a new lease with her and accepted rent for the first month.

Dealing first with the procedural issues, the court agreed with the tenant that the landlord was required to serve a copy of the termination notice on DHCR, too. With respect to certified mailing of the lease, the landlord alleges that service can also be in person and produced a DHCR case which ruled that the landlord in that matter had a right to hand deliver the renewal forms so long as he gets the tenant to sign for them. The court, however, pointed out that the ETPA rules on lease renewals is specific in requiring certified mail. The court refused to defer to a DHCR ruling over the actual requirements of the statute.

The court agreed with the landlord that a tenant's failure to timely renew the lease is not curable. [Note: Appellate Division decisions contradict this holding]. However, the tenant's position is not that she failed to timely renew the lease, but rather that the parties entered into a new agreement. Landlord does not refute that the tenant is now being billed under a higher rent than had the lease renewal been in effect. Thus, even assuming that the termination and renewal notices were served in accordance with the applicable statutes, the court ruled that the landlord's subsequent decision to execute a new lease agreement with the tenant would no doubt preclude the court from evicting the tenant under this new lease. Finally, the court ruled that the owner's failure to send the DHCR a copy of the termination notice renders the proceeding defective and requires the dismissal of the petition.


Case Caption:
Matter of Matthews v. Marcus Garvey Brownstone Houses, Inc.
Issues/Legal Principles:
Tenants who petition for a 7-A Administrator must properly serve all non-petitioning tenants as well as the landlord and its agents.
Keywords:
7-A administrator; service of process
Court:
Civil Housing Court, Kings County
Judge:
Hon. Sikowitz
Date:
June 27, 2001
Citation:
NYLJ, page 21, col 5
Referred Statutes:
CPLR 3211(a)(2); RPAPL 778, 770(1), 771(6)
Summary:
Petitioner-Tenants commenced an HP action seeking the appointment of a 7-A administrator because it was alleged that the owner neglected to attend to repairs. The landlord sought to dismiss the petition on several grounds. The first ground is that the petition was brought by less than 1/3 of the tenants in the premises and the second ground is that the tenants failed to serve the agents of the building and the non-petitioning tenants.

As to the non-petitioning tenants, the tenants claim that service on the outer door of the management office was a sufficient method of service. The court held that, since there are seven buildings comprising the Marcus Garvey Village (i.e., the subject premises), this method of service was completely inadequate. The court held that it was "certainly conceivable" that the non-petitioning tenants residing in the six buildings where the management office was not located would not have an occasion to enter the building where the 7-A petition was posted. Accordingly, it is possible that most or all of the non-petitioning tenants did not have notice of the proceeding.

The landlord was the one who made the argument about the improper service on the non- petitioning tenants, but the tenants argued that since the landlord was served, the landlord had notice so it was immaterial to the landlord whether the non-petitioning tenants were properly served. The court ruled that substantial property rights will not be interfered with absent a showing that all interested parties have been given an opportunity to be heard. The court said the non-petitioning tenants did not have to be named parties, but they did need to have notice. Notice and an opportunity to be heard is the basis of due process. The court suggested that posting the petitions in the lobbies of all the buildings is not a burden. The court did not have to reach the other legal issues raised since the petition was dismissed based on the improper service of the non-petitioning tenants.


Case Caption:
Riai Realty LLC v. Pena
Issues/Legal Principles:
Settlement agreement is set aside where landlord misrepresents to pro se tenant and the court the apartment's regulatory status.
Keywords:
stipulations
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Rolando Acosta
Date:
June 29, 2001
Citation:
NYLJ, page 19, col 3
Referred Statutes:
none cited
Summary:
The tenant, who did not have an attorney, entered into a stipulation of settlement, then thereafter sought to have it set aside. The lower court granted the tenant's request because the landlord misrepresented the regulatory status of the apartment, and the court itself relied on this representation when the court approved the settlement. Apparently, the landlord alleged that the apartment was not subject to the rent stabilization laws, but the record indicates that this might be a misrepresentation. The appellate court affirmed the setting aside of the stipulation.


Case Caption:
Jaj Equities LLC v. Altman
Issues/Legal Principles:
DHCR's requirements for stabilization exemption of buildings which were substantially rehabilitated apply only to properties which consisted of residential units, not commercial properties.
Keywords:
substantial rehabilitation; loft
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Maria Milin
Date:
June 29, 2001
Citation:
NYLJ, page 19, col 3
Referred Statutes:
Emergency Tenant Protection Act 5(a)(5)
Summary:
The lower court granted summary judgment in landlord's favor in a holdover proceeding. The prime tenant of the loft space had left and the respondent's sublease had expired. He signed an agreement to leave by December, but he never left. He claimed stabilization status, but the court disagreed. The building consisted of a vacant commercial property which was substantially rehabilitated for residential use in 1986 and therefore is exempt from stabilization coverage. The respondent argued that a DHCR Operation Bulletin requires submission of certificates of occupancy before and after the rehabilitation. The Appellate Court affirmed the lower court's decision and held that the DHCR Operation Bulletin addresses rehabilitation of previously stabilized properties, not commercial buildings which never had any residential units to begin with. Any delay in the issuance of a residential certificate of occupancy does not affect the applicability of the exemption arising from the creation of residential units in former commercial space.


Case Caption:
500 West End Avenue v. Paleologos
Issues/Legal Principles:
Tenant who is absent from her apartment doing volunteer work in a Boston hospice does not lose her apartment on grounds of nonprimary residence since she never established a permanent residence at the hospice.
Keywords:
nonprimary residence
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Jerald Klein
Date:
June 29, 2001
Citation:
NYLJ, page 19, col 3
Referred Statutes:
none cited
Summary:
Landlord brought a nonprimary residence proceeding against the tenant who was absent extensively from the apartment for volunteer work done at a Boston hospice. The lower court held that the tenant did not relinquish her primary New York City residence and the Appellate Term agreed. At the hospice tenant had no permanent space and resided in a "cell-like room" and her furniture and clothing remained in New York. She returned to her apartment on a regular basis, received medical care here, maintained utility services and filed New York City income tax returns. Property in Easthampton was no more than a vacation residence.


Case Caption:
Duane Street Associates v. Cousins
Issues/Legal Principles:
Landlord properly rejected tenant's offers to pay the rent because the rent tendered was for an incorrect amount, despite the fact that landlord's initial bills were incorrect.
Keywords:
rent demand
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Howard Malatzky
Date:
June 29, 2001
Citation:
NYLJ, page 19, col 3
Referred Statutes:
RPAPL 711(2)
Summary:
The Appellate Term affirmed the lower court's decision, holding that the landlord properly rejected tenant's tenders of rent in the incorrect amounts for the months in question. After correcting a mistake in billing, landlord made timely demand for the accrued, unpaid rent prior to the commencement of the nonpayment proceeding, but tenant refused to pay these properly demanded amounts. Thus, landlord's nonpayment proceeding was proper. Tenant did not contest that he owed the rent, but only that his tenders were improperly rejected. But the Appellate Term held that he was not prejudiced by the landlord's original mistake in billing. Rather, the tenant continued to accept the benefits of his tenancy throughout the course of the dispute.


New York Law Journal,
decisions for the week of June 18-22, 2001 (6 cases)


Case Caption:
498 West End Avenue Realty Co. v. Donath
Issues/Legal Principles:
Petition which was initially improperly served on tenant, was re-served, and because re- service was proper and timely, the tenant's request to dismiss the petition should have been denied.
Keywords:
service of process; personal jurisdiction
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Laurie Lau
Date:
June 19, 2001
Citation:
NYLJ, page 18, col 2
Referred Statutes:
RPAPL 733
Summary:
The lower court dismissed the holdover petition on grounds that it was not properly served on the tenant. The landlord, however, had re-served the petition and timely mailed the petition to the tenant, as well as timely filed proof of service with the court. The Appellate Term ruled that jurisdiction was validly obtained and there was no cause to dismiss the proceeding because of landlord's initial failed attempt at service. The court held that the law does not prohibit timely re-service of a petition to cure a jurisdictional defect.


Case Caption:
Parkchester Preservation v. Cotton
Issues/Legal Principles:
Landlord's holdover proceeding is not subject to dismissal where no notice to cure is served because the grounds for the holdover are nuisance, specifically harassment of other tenants.
Keywords:
nuisance; harassment; predicate notice
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Anthony Fiorella
Date:
June 19, 2001
Citation:
NYLJ, page 18, col 1
Referred Statutes:
RSC 2524.2(b), 2524.3(b), 2524.3(a)
Summary:
The landlord commenced a holdover proceeding against the tenant on grounds of nuisance and the termination notice described in detail the instances of objectionable conduct by tenant's son. The conduct rose to the level of harassment to the extent that the Appellate Term ruled that no notice of cure was required. Justice Gangel-Jacobs, however, dissented because she found the notice insufficient in that it did not "go so far as to state that the tenant intentionally committed harassment." The notice only stated that the tenant engaged in a common law nuisance and this entails a different standard that the course of conduct for purposes of harassment. The landlord did not mirror the language of the Code because an eviction based on nuisance is only permitted when the wrongful acts of the tenant have occurred "in such housing accommodation or the building containing such housing accommodation." The landlord did not evoke this language in the termination notice.


Case Caption:
8735 Bay Owners v. D'Angelo
Issues/Legal Principles:
Landlord is not entitled to legal fees based on unsigned lease where no foundation was laid at trial for the lease's admissibility.
Keywords:
attorney's fees; lease; evidence
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower court: Hon. Bedford
Date:
June 20, 2001
Citation:
NYLJ, page 19, col 4
Referred Statutes:
CPLR 5520(c)
Summary:
The landlord won legal fees by the lower court and the tenant appealed. The award was based on an unsigned, blank lease which the landlord's attorney submitted with his post-trial motion for legal fees. The lease was admitted into evidence at trial pursuant to tenant's stipulation for the sole purpose of establishing landlord's responsibility to fix tenant's toilet. Tenant initially objected to the lease. The lower court never ruled on the admissibility of the lease because it was admitted under the stipulation by both parties for a limited purpose. Later, upon landlord's motion for legal fees, the lower court ruled that the lease was now admissible. The Appellate Term reversed finding it improper for the lower court to grant legal fees on this lease because the landlord failed to lay a foundation for its admissibility.


Case Caption:
Kew Hills LLC v. Victor
Issues/Legal Principles:
Tenants' claim for "stale rent" (laches) is denied because they failed to show how landlord's delay in collecting the rent prejudiced them.
Keywords:
MCI; laches; stale rent
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower court: Hon. Grayshaw
Date:
June 20, 2001
Citation:
NYLJ, page 19, col 3
Referred Statutes:
RSL 26-511(c)
Summary:
Tenants made a motion seeking dismissal of the landlord's claim for rent increases based on major capital improvements (MCIs), but the motion was denied by the lower court, and the Appellate Term upheld the denial. Tenants tried to argued that the Housing Court should defer to the DHCR issues regarding the collectibility of the increases, but the court disagreed. On the merits, landlord's collection of the increases is permissible because the collection commenced prior to the issuance of the DHCR's order freezing the rent. The fact that, for the benefit of tenants, owners are required by law to spread the collection of the MCI increases over many years rather than collect them immediately in a lump sum should not render these rent increases subject to a freeze, if their collection was commenced prior to the rent freeze. Also tenants' claim for laches ("stale rent") was not established because they failed to submit an affidavit showing how they were prejudiced by landlord's delay in collecting the rent.


Case Caption:
63rd Building Corp. v. Cohen
Issues/Legal Principles:
Subpoena served on subtenant's attorney to testify about prime tenant's rent overcharging is quashed because attorney-client privilege is a paramount public policy.
Keywords:
overcharging; sublets; profiteering; subpoena; quashing subpoenas
Court:
Civil Housing Court, New York County
Judge:
Hon. Julia Rodriguez
Date:
June 20, 2001
Citation:
NYLJ, page 18, col 3
Referred Statutes:
CPLR 308, 4503(a)
Summary:
The issue presented to the court is whether an attorney may subpoena another attorney representing an adversary in the same eviction proceeding and compel that attorney to testify against his will as to matters being litigated. The court concluded that an attorney cannot be so subpoenaed, and thereby quashed the subpoena.

The landlord commenced a holdover proceeding wherein the owner sought to evict the tenant on grounds that the prime tenant overcharged the subtenant $1,000 above the legal rent. The landlord contends that upon expiration of the sublease, the prime tenant did not return to the apartment and the subtenant did not leave. Instead, an attorney claiming to represent the subtenant called the managing agent and informed her that the prime tenant was profiteering. During the landlord's holdover proceeding, the prime tenant and the subtenant each appeared by their own attorneys. The landlord issued a subpoena commanding the subtenant's attorney to testify at trial and produce documents indicating that the prime tenant had overcharged the subtenant. The subtenant's attorney asked the court to quash the subpoena, primarily on grounds that the information sought is subject to an attorney-client privilege, and is not subject to disclosure because of this privilege.

The landlord argued that the attorney waived the privilege when he unilaterally telephoned and volunteered the information regarding the profiteering to the landlord's secretary. The court ruled that this position is taken cavalierly because the privilege is one that only the client can waive, not the attorney. Further, public policy dictates that a person's choice of counsel is paramount and will be disregarded only under compelling circumstances. The court recited a number of cases where an attorney was subpoenaed to testify. But these cases, the court noted, are criminal in nature. Although the prime tenant is accused of breaking the rent stabilization laws by rent gouging, this is not a criminal offense. Accordingly, the court granted the subtenant's request to quash the subpoena.


Case Caption:
302 Eastern Corp. v. Pack
Issues/Legal Principles:
Housing Court case is stayed pending the outcome of Section 8 tenant's federal lawsuit against New York City Housing Authority for alleged discrimination.
Keywords:
Section 8; stay; discrimination
Court:
Civil Housing Court, Kings County
Judge:
Hon. Thomas
Date:
June 20, 2001
Citation:
NYLJ, page 20, col 5
Referred Statutes:
CPLR 3211(a), 2201
Summary:
Landlord brought a holdover eviction proceeding against the rent stabilized Section 8 tenant, but the tenant seeks a stay of the proceedings pending the outcome of her federal lawsuit of discrimination against New York City Housing Authority (NYCHA) who administers the Section 8 rent subsidy program. The tenant claims her Section 8 status was terminated for discriminatory reasons, but NYCHA claims it is because she failed to supply adequate income recertification documents for 1999 and that her benefits would not be reinstated since they were previously terminated, then reinstated, in 1997.

The rent is $822.10 per month, but the tenant's portion of the rent is only $215.00. The landlord served a holdover proceeding seeking $3,559 in arrears owed. The court appointed a guardian ad litem for the tenant based on her history and ongoing treatment for cardiac disease, hypertension and a chronic psychological disorder.

The landlord argues that the Housing Court should not stay the holdover proceeding pending the federal case because, for one, there is no identity of parties, claims or issues between the two cases. The tenant sued the landlord in federal court, but really just for convenience because the main defendant is NYCHA. Also, the landlord argued that a stay would be inequitable to the landlord because while the federal action is pending, the landlord would not be able to recover the full $815 in rent, but could only recover $215 per month from the tenant. Hence the landlord argued it would be prejudiced by a stay. The tenant cites case law authorizing a stay when there exists a substantial identity of parties, claims and issues between the Housing Court and the federal court action.

The court recognized the landlord's position, but ultimately held for the tenant, on grounds that should she be rendered homeless if a stay were denied, that this is more compelling than landlord's loss of $600 in rent each month (collecting only $215.00 from the tenant, and not the Section 8 balance from NYCHA). The court ruled that the central issue in the Supreme Court case is inexplicably intertwined with the issues in federal litigation. Even if this is not the case, at the very least, the issues and claims overlap and the outcome of the federal litigation perforce will shape the outcome of the Housing Court case. A second reason the court granted a stay is because the court has no jurisdiction over NYCHA, and it is the federal court that has expertise in adjudicating cases invoking the Americans with Disabilities Act of 1973. The court stayed the holdover proceeding until the federal litigation is resolved, or for six months, whichever is sooner.

New York Law Journal,
decisions for the week of June 11-15, 2001 (5 cases)


Case Caption:
Department of Housing Preservation and Development v. Nikac
Issues/Legal Principles:
HP action which fails to cite the proper address of the building is not subject to dismissal, but motion to amend the petition to correct the defect must be made within twenty days.
Keywords:
violations; lead paint; jurisdictional defect; emergency repairs
Court:
Civil Housing Court, Bronx Court
Judge:
Hon. Halperin
Date:
June 13, 2001
Citation:
NYLJ, page 22, col 3
Referred Statutes:
New York City Civil Court Act 110(9); CPLR 103-b
Summary:
Department of Housing Preservation and Development (HPD") filed a petition seeking an order to direct the landlord to provide access to the building to allow HPD's employees or contractors to perform emergency repairs to correct lead paint violations in compliance with a 1994 Health Department order. The landlord argued that HPD cannot seek an inspection based on an order over six years old, and further, there is no longer a child residing in the premises so the order is moot. Also, the petition listed the wrong address of the premises.

The court noted that in summary proceedings strict compliance of the statutes is necessary, so normally the case would get dismissed where the petition lists the wrong address. Yet, this is an HP proceeding and the Civil Court act does not provide for a set of procedures in commencing HP actions. Therefore, the court needs to defer to the CPLR rather than the RPAPL which is otherwise used in housing cases. The court noted that HPD attorneys pointed out that the address listed has been used interchangeably with the actual address. The original 1994 order to abate the lead poisoning violation referred to the address as 2830 Grand Concourse and the attorney for HPD never corrected the inconsistency. The landlord, however, argues that 2820 Grand Concourse is an address that does not even exist. The court ruled that the proper address is 2830 Grand Concourse.

In a nonpayment proceeding or a holdover proceeding, the petition would get dismissed for a wrong address. But the CPLR controls and the court held that HPD's attorney could make a motion to amend all papers within twenty days, rather than dismiss the case as the landlord requests. The court commented that the lapse of six years in seeking an access order is disconcerting, but it is not a fatal defect. The violations remain outstanding until they are properly abated and certified as such. The court recommended that the parties work together to abate the nuisance, and urged landlord to cooperate.


Case Caption:
Lemle v. Bascourt
Issues/Legal Principles:
Landlord is allowed to obtain discovery covering a five year period against occupant seeking succession rights.
Keywords:
discovery; succession rights; warranty of habitability
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Deighton S. Waithe
Date:
June 15, 2001
Citation:
NYLJ, page 20, col 1
Referred Statutes:
Civil Court Act 110
Summary:
Landlord brought a holdover proceeding and the respondent asserted a succession rights claim to the apartment. Landlord brought a motion for discovery and request for production of documents for the years 1995 through 1999. The case does not indicate why landlord needed five years of discovery when two years is the standard (i.e., two years prior to when the prime tenant died or permanently vacated the apartment). The case does not indicate when the respondent moved in and when the prime tenant moved out. The lower court had denied landlord's motion for the period of discovery sought, but the Appellate Term reversed and allowed five years of discovery. The Appellate Term also ruled on respondent's various defenses and counterclaims, including striking respondent's claim for breach of warranty of habitability and actual or constructive eviction since these defenses cannot serve as defenses to a holdover proceeding.


Case Caption:
New Dimension Realty LLC v. Sincere
Issues/Legal Principles:
City inspector's report that building contains six units is not conclusive or prima facie proof that building is subject to rent stabilization.
Keywords:
rent stabilization status, evidence, certificate of occupancy
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower court: Hon. G. Badillo
Date:
June 15, 2001
Citation:
NYLJ, page 21, col 5
Referred Statutes:
CPLR 5501(c), 4518(c)
Summary:
Tenant's position that the apartment is subject to rent stabilization is based on a 1987 inspection report issued by the Department of Housing and Preservation ("HPD") which stated that the building contained six units and that all were occupied. The landlord, who purchased the building after the inspection report issued, argued that the building was advertised as a five- family building and that it in fact had only five units at the time he bought it and has had only five units ever since. The landlord also claimed the certificate of occupancy showed that the building was converted from a four family to a five family dwelling in 1935, but landlord did not submit a copy of the certificate of occupancy. The lower court dismissed the petition finding that the HPD report prevailed and determined the building's status.

The Appellate Term reversed the lower court's finding, holding that the HPD report is not evidence which would only permit but not require the trier of fact to find that the building contained six units in 1987. "This is not a case where the inference arising from the inspector's statement is so compelling as so to be inescapable." The Appellate Term reversed the summary judgment award granted to tenant and ruled that a trial was necessary.


Case Caption:
Takaya v. Syndicom Corp.
Issues/Legal Principles:
Tenant is not susceptible to contempt for failure to comply with order to pay use and occupancy (rent).
Keywords:
contempt; use and occupancy
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Timmie Elsner
Date:
June 15, 2001
Citation:
NYLJ, page 20, col 1
Referred Statutes:
CPLR 5104; Judiciary Law 753(A)(3)
Summary:
Tenants failed to comply with a prior order directing them to pay use and occupancy. They were not, however, subject to the remedy of civil contempt because the order was unenforceable as a money judgment. The Appellate Term ruled that this is not a case "where by law execution cannot be awarded for the collection of such sum."


Case Caption:
490 Owners Corp. v. Israel
Issues/Legal Principles:
Despite a ten day post judgment cure, landlord awarded legal fees since it obtained a possessory judgment which was the central relief sought in the petition.
Keywords:
attorney's fees; prevailing party; washing machine
Court:
Appellate Term, 2nd & 11th Judicial Districts
Judge:
lower court: Hon. Peter Wendt
Date:
June 15, 2001
Citation:
NYLJ, page 22, col 1
Referred Statutes:
RPAPL 753(4); Real Property Law 234
Summary:
The underlying holdover proceeding was based on the tenant's failure to cure a lease violation by removing a washing machine that was installed without the landlord's prior written consent. The lower court awarded the landlord a possessory judgment, but granted the tenant a ten day cure period. During the cure period, the tenant is to either remove the washing machine, or face eviction. The landlord then made a motion to the lower court for an award of its legal fees. The lower court denied this request holding that since the tenant was afforded a ten day cure period, that the landlord did not obtain the central relief sought in the petition and accordingly could not be deemed the prevailing party entitled to an award of attorney's fees.

The Appellate Term reversed, granting the landlord's motion for attorney's fees. The Court held that despite the ten day cure period afforded the tenant, the landlord was the prevailing party to the litigation to the extent that it obtained the central relief sought, i.e. a judgment of possession. The Court also rejected the tenant's argument that the attorney's fees provision in the lease was ambiguous.

New York Law Journal,
decisions for the week of June 4-8, 2001 (14 cases)


Case Caption:
Congregation Kahal Minchas Chinuch Incorporated v. Ortiz
Issues/Legal Principles:
In a court settlement where roommate is given three-year sublease with "right of first refusal" to a new lease, the roommate is not a stabilized tenant.
Keywords:
roommate; stipulation; rent stabilization status
Court:
Appellate Term, First Department
Judge:
lower Court: Hon. Timmie Erin Elsner
Date:
June 7, 2001
Citation:
NYLJ, page 20, col 6
Referred Statutes:
none cited
Summary:
The roommate of the departed rent stabilized tenant entered into a stipulation of settlement in Housing Court with the landlord which gave the roommate a three year sublease with a right of "first refusal" on a new lease. The roommate later appealed, apparently arguing that she was entitled to rent stabilization status, and tried to get out of the stipulation. The lower court upheld the stipulation and the Appellate Term affirmed on grounds that the roommate was not a protected tenant at the time she executed the stipulation and therefore there was no impermissible waiver of any rent stabilization rights.


Case Caption:
56th Realty LLC v. Midgulf Corp.
Issues/Legal Principles:
Occupants of a corporate lease were specifically identified in documents associated with the lease, and since these individuals still occupy the apartment, the corporate tenant is entitled to a renewal lease.
Keywords:
corporate tenant; renewal lease
Court:
Appellate Term, First Department
Judge:
lower Court: Hon. Julia I. Rodriguez
Date:
June 7, 2001
Citation:
NYLJ, page 20, col 6
Referred Statutes:
none cited
Summary:
The lower court and the Appellate Term held that the corporate tenant is entitled to a renewal lease. The original lease, both in the "occupancy" and "misrepresentation" clauses, expressly incorporated by reference an Information Form which identified certain named family members as occupants of the apartment. By specifying these particular individuals as occupants, the possibility of a "perpetual tenancy" was obviated. (The case does not state the grounds of the holdover proceeding against the corporate tenant).


Case Caption:
595 Broadway Associates v. Bikman
Issues/Legal Principles:
Sister of Loft Law tenant is not entitled to succeed to the lease because the Loft Law and its regulations do not provide for succession rights.
Keywords:
Loft Law; succession rights
Court:
Appellate Division, First Department
Judge:
lower Court: Hon. Howard Malatzky
Date:
June 7, 2001
Citation:
NYLJ, page 20, col 1
Referred Statutes:
MDL Article 7-C
Summary:
Landlord brought a holdover proceeding against a Loft Law tenant, and the occupant of the loft claimed succession rights to her sister's loft tenancy. The Appellate Division, however, ruled that "neither the Loft Law nor the regulations promulgated thereunder provide for tenancy succession rights." The Court noted that even if succession rights were applicable, this occupant never resided with her sister for the requisite two-year period.


Case Caption:
Jean-Frankel Bijoux v. The Carlyle
Issues/Legal Principles:
Trial court did not err in charging the jury that married people can maintain separate primary residences.
Keywords:
succession rights; primary residence; jury verdict
Court:
Appellate Division, First Department
Judge:
lower Court: Shirley Werner Kornreich
Date:
June 7, 2001
Citation:
NYLJ, page 18, col 6
Referred Statutes:
9 NYCRR 2204.6(d)(1)
Summary:
The Appellate Division ruled that the remaining family member established her succession rights to the rent controlled apartment with legally sufficient evidence, mostly testimonial and turning largely on credibility, that the apartment was her primary residence between the time of her marriage to the tenant of record and the latter's death some three and a half years later. The Appellate Division held that the verdict was not against the weight of the evidence. The landlord argued that the documentary evidence was against the tenant, but the Appellate Division held that documentary evidence is significant in determining primary residence, but it is not essential and it does not necessarily preponderate over inconsistent testimony. Further, there was various documentary evidence that did support the wife's claim that she resided with her husband, including her voter's card and the letter she wrote the managing agent advising of her marriage and occupancy of the apartment. The Appellate Division rejected the landlord's position that the trial judge erred for not drawing a negative inference when the tenant failed to introduce tax returns for the relevant period, since the only evidence as to her tax returns concerned the last one she filed for the tax year prior to her marriage, and the landlord never subpoenaed the returns. Nor did the lower court err by charging the jury that married people can maintain separate primary residences since this is a proposition within the common sense knowledge and experience of jurors.


Case Caption:
Bonst Realty Associates v. Doe
Issues/Legal Principles:
Landlord's motion for summary judgment is granted on appeal where respondent fails to show in opposition papers any indicia of financial or emotional interrelationship with the deceased tenant of record in order to establish succession rights on grounds of nontraditional family relationship.
Keywords:
succession rights
Court:
Appellate Term, First Department
Judge:
lower Court: Thomas M. Fitzpatrick
Date:
June 7, 2001
Citation:
NYLJ, page 20, col 6
Referred Statutes:
9 NYCRR §2204.6[d][2]; 9 NYCRR §2204.6[d][3]
Summary:
The landlord brought a holdover proceeding after the rent controlled tenant died because the respondent remained in the premises on grounds that she had a nontraditional family relationship with the tenant and was entitled to succession rights. The landlord made a motion for summary judgment and the lower court denied the motion. The Appellate Term reversed holding that the respondent failed to raise a triable issue with respect to her affirmative obligation to establish succession rights. (In other words, the burden of proof was on the respondent). The respondent's opposition to the summary judgment motion conspicuously failed to show any evidence of shared household expenses, intermingled finances or joint accounts, formalized legal obligations, or joint attendance at family functions or social activities.


Case Caption:
Chuu v. Calka
Issues/Legal Principles:
Landlord is entitled to use and occupancy for period in which tenant stayed after expiration of interim condominium lease.
Keywords:
bankruptcy; stay; use and occupancy
Court:
Appellate Term, First Department
Judge:
lower Court: Hon. Laurie L. Lau
Date:
June 8, 2001
Citation:
NYLJ, page 20, col 1
Referred Statutes:
none cited
Summary:
Landlord brought a holdover proceeding after the tenant's lease to the condominium apartment expired by its own terms on October 31, 1997. Tenant claimed that the parties agreed to extend the lease until title was closed on the condo. But this claim is negated by related litigation where the Appellate Division ruled that the contract of sale was not binding because it was not signed by the owner and that, even if the owner had ratified the contract, there was no evidence that tenant was ready, willing and able to close as agreed.

The Appellate Term held that there was no evidence in the record that the tenant had obtained a stay in Bankruptcy Court so as to stay the hearing on landlord's entitlement to use and occupancy and legal fees (a hearing at which the tenant did not show up). The landlord was entitled to use and occupancy for the months tenant remained in possession after expiration of the interim lease. While she argued in the Supreme Court case that the sums she purportedly paid landlord were "down payments" toward the purchase of the condo, the tenant was now estopped from claiming that she prepaid rent.


Case Caption:
Ram 1 LLC v. Mazzola
Issues/Legal Principles:
Tenant is not allowed to charge roommate more than a "proportionate share" of the rent, and doing so may provide the basis for landlord's eviction proceeding.
Keywords:
roommates; overcharge
Court:
Civil Housing Court, New York County
Judge:
Hon. Larry Schachner
Date:
June 8, 2001
Citation:
NYLJ, page 21, col 1
Referred Statutes:
CPLR §3211(a)(7); RSC §2525.7(b); CPLR §3026; RPL §235-f; RPAPL §741
Summary:
The landlord brought a holdover proceeding against the tenant alleging that the tenant charged her roommate more than the roommate's "proportionate share" of the legal rent. The landlord alleged that the tenant rented a room in her apartment to a roommate on or about March 8, 2001 for $2,200 per month, yet the legal rent is only $1,847.77 per month. The tenant brought a motion to dismiss the petition relying on a 1990 Appellate Division case which held that a tenant could charge a roommate any amount of rent, even above the legal rent, and not be in violation of the law. The court denied the tenant's motion because of the recently amended Rent Stabilization Code which changed the law in December, 2000 to prohibit a tenant from profiteering off of a roommate. Now a tenant may only charge a roommate or roommates a "proportionate share of the rent." The court directed the tenant to file an answer and restored the case to the trial calendar.
Notes:
Given that the tenant has clearly violated the new law, it will be interesting to watch whether the courts will allow her to cure this violation. In the context of subletting an apartment, if tenants have engaged in profiteering they are not allowed to cure (i.e., pay back the overcharges and retain the apartment). It is unclear if courts will treat roommate profiteering in the same way.


Case Caption:
Lexington Avenue Associates v. Alice Kandell
Issues/Legal Principles:
Civil Court has jurisdiction to enforce terms of stipulation entered into in the context of a nonpayment proceeding.
Keywords:
enforcement of stipulations; jurisdiction; use and occupancy, attorney's fees
Court:
Appellate Division, First Department
Judge:
lower Court: Hon. Edward Lehner
Date:
June 4, 2001
Citation:
NYLJ, page 28, col 1
Referred Statutes:
none cited
Summary:
Landlord commenced an action to enforce a stipulation of settlement which was entered into in the context of a summary non-payment proceeding. The stipulation required that subject to certain conditions, the tenant would vacate the temporary apartment that she was staying in and reoccupy the subject apartment of which she was the tenant of record. The landlord made a motion for use and occupancy to recover the rent on the combined apartments. The Court held that the Civil Court has the jurisdiction to enforce the terms of the stipulation of settlement as well as to award any incidental relief such as rent and attorney's fees.


Case Caption:
Ricky Faison v. NYCHA
Issues/Legal Principles:
A remaining family member seeking succession rights in public housing is not a "tenant" but rather is subject to the standards of eligibility adopted by the Housing Authority for a new tenant.
Keywords:
succession rights; public housing, misdemeanors, rehabilitation
Court:
Appellate Division, First Department
Judge:
lower Court: Hon. Emily Goodman
Date:
June 4, 2001
Citation:
NYLJ, page 26, col 1
Referred Statutes:
42 USC §1437a[a][1], §1437a[b][3][a]; 24 CFR 5.403; 24 CFR 966.50; 24 CFR 966.53[f][1]
Summary:
Petitioner claimed succession rights to his mother's public housing lease. It is undisputed that petitioner was a remaining family member who resided at the subject apartment with his mother prior to her death and for the requisite time period. However, the Housing Authority denied his succession rights claim as his criminal record rendered him ineligible for public housing. Pursuant to the Housing Authority's admission standards, if a tenant is convicted of three or more Class A misdemeanors within the last ten years, then the tenant is ineligible for public housing until five years pass with no further convictions after all sentences have elapsed. At the hearing, petitioner admitted committing six Class A misdemeanors during the relevant time period. The housing authority gave consideration to "time, nature, and extent of the applicant's conduct and to factors which might indicate a reasonable probability of favorable future conduct," for example rehabilitation. The Housing Authority found that Petitioner offered no evidence of rehabilitation and held that Petitioner was not entitled to public housing.

Petitioner commenced an Article 78 proceeding, wherein the Housing Authority's decision was vacated and annulled and they were ordered to recognize petitioner as a remaining family member entitled to succession rights. The Supreme Court held that the Authority applied an incorrect standard of review, thereby denying petitioner a fair hearing. The Court determined a remaining family member is already a tenant and thus the Housing Authority's standards for determining new tenant eligibility did not apply. The Court also found that the Housing Authority denied petitioner a fair hearing in that the Authority's decision that petitioner's multiple convictions for theft of services, petty larceny, criminal trespass and injuring a dog rendered petitioner ineligible for the tenancy, was not rationally related to physical violence or endangering the public housing community.

The Appellate Division disagreed with the Supreme Court and reversed, reinstating the Housing Authority's rejection of petitioner's claims to eligibility. First, the Appellate Division found that the remaining family members are not "tenants" and therefore they are subject to the Housing Authority's standards for eligibility as new tenants. The Court noted that only the head of the household was the tenant and not the entire family. Second, the Court found that the crimes committed by the petitioner and his failure to present witnesses or other competent evidence to demonstrate his rehabilitation were sufficient grounds to deny eligibility. Finally, the Court found that the Authority's multiple adjournments of petitioner's grievance over the course of two years for petitioner to retain counsel satisfied due process requirements.


Case Caption:
Matter of Schaper and Falck v. DHCR
Issues/Legal Principles:
DHCR cannot calculate MBR increases in Fair Market Rent Appeal without landlord's proof of entitlement to MBR increases, even though technically landlords are not entitled to receive any MBRs retroactively.
Keywords:
Fair Market Rent Appeals; MBR increases; Special Guideline 26
Court:
Supreme Court, New York County
Judge:
Hon. Leland DeGrasse
Date:
June 5, 2001
Citation:
NYLJ, page 18, col 2
Referred Statutes:
CPLR 1012, 7802[d]; RSC §2522.4; RSL §26-405 g[1][n][2]; NYC Administrative Code §26-405[h][6]; RSC §2522.3[b]; CPLR 8601
Summary:
Tenants were the first rent stabilized tenants of the premises after the apartment was decontrolled from its prior rent control status. Tenants then timely filed a Fair Market Rent Appeal ("FMRA") and challenged the first rent they were charged of $1,050.00. The landlord opposed and argued that in fact if all their improvements were taken into consideration, the rent could have been $1,004.82. Thus, they only charged $46 in excess of what they believed they were entitled to charge. The DHCR, however, calculated the "lawful" increases and determined that in fact the landlord was entitled to charge $1,164.08 as a first rent.

DHCR arrived at its rent by acknowledging landlord's improvements, plus allowing maximum base rent ("MBR") increases as allegedly permitted by Special Guidelines Order #26. However, the problem, and the reason the tenants appealed the decision, is because landlord never applied for MBRs to begin with. Normally, in order for a rent controlled apartment to receive MBR rent increases, the landlord must file a written certification proving that six months prior to the application for an MBR, all rent impairing violations have been removed and 80% of all other violations. Then the landlord would be entitled to an Order of Eligibility which triggers the awarding of an MBR rent increase. The rent control laws do not allow a landlord to receive an MBR increase retroactively. Therefore, DHCR calculations in establishing the first rent are incorrect because the landlord never applied for and received the MBRs in the past.

The tenants appealed the DHCR's order in an Article 78 proceeding, and the Supreme Court judge reversed the DHCR's decision as arbitrary and capricious. The court ruled that the DHCR's method of allowing MBR increases retroactively when same were never applied for or granted contravened the rent control laws. However, the court then went on to hold that the case should be sent back to the DHCR for further consideration in order to allow the landlord to submit proof that if MBR applications had been filed and accepted, then the landlord should be entitled to have those MBR increases included in the calculations in determining the first rent stabilized rent. Thus, the court allowed the landlord a chance to collect MBR increases retroactively.

Notes:
Tenant Attorney Kenneth Hawco represents the tenants in this matter. He notified Tenant.Net that although this decision looks like a victory for tenants, it is not. Since the court gave the landlord the belated opportunity to retroactively apply for MBR increases, this still runs afoul of the rent control laws which do not permit a landlord to retroactively apply for MBR increases. Once a landlord applies for and is determined eligible for MBR increases, such increases are supposed to be applied in the future only. Thus, as Mr. Hawco points out, the law has a built-in incentive for landlords to timely file MBR increases or forever waive the opportunity to apply for such increases. The court seems to contradict itself in holding that belated filings contravene the rent control laws, and then allow the landlord to, in effect, belatedly file via submitting evidence long afterwards. Fortunately for tenants, Mr. Hawco has filed a notice of appeal of this decision.


Case Caption:
NYCHA v. Bryant
Issues/Legal Principles:
Tenant knew or should have known that premises were used for illegal purpose given the abundance of drugs and drug paraphernalia found in the apartment during a police search.
Keywords:
illegal usage
Court:
Civil Housing Court, Kings County
Judge:
Hon. Bedford
Date:
May 30, 2001
Citation:
NYLJ, page 20, col 1
Referred Statutes:
RPL §§232-b, 232-c
Summary:
Landlord City Housing Authority brought a holdover proceeding against the tenant on grounds that she was unlawfully selling drugs from the apartment. The landlord's witness, a police detective, testified that he obtained a search warrant to enter the apartment and was admitted inside by the tenant. The officer testified that the tenant allegedly said when she was handcuffed, "You would probably find crack cocaine in the closet of my bedroom," and he went to the closet and recovered 201 ziplock bags and three large "white rocks" believed, and later proven, to be cocaine and crack cocaine. He also found a weapon and ammunition and other illegal items, including marijuana, and drug paraphernalia such as scales.

The tenant testified that she had no idea her apartment was being used for drug activity and denied stating anything about finding crack in her bedroom. She testified that she lives with her two children and her brother, the latter who initially intended to stay for two weeks, but his stay grew into four months. The tenant is a licensed home health aid and has worked in that capacity since 1999. She did not, however, claim this income in her income affidavit which must be filed by all public housing tenants. She stated that her sole source of income was public assistance. She also neglected to include her brother's income or his occupancy on this form. She also admitted to knowing that marijuana was present in the premises.

The court held that the fact that the tenant would so openly and deliberately deceive the landlord as to her income and her brother's presence and his income in order to keep her rent low indicates, to the court, that the tenant has no qualms about lying to serve her purposes, and casts a shadow of doubt over all her court testimony. The court disbelieved the tenant's claim that she had no knowledge about all the drugs found in her apartment. The court held that even if she didn't know about the drugs, she should have known. There was too much evidence of drug paraphernalia for the tenant to claim lack of knowledge. Therefore, the court ruled that the tenant must be evicted.


Case Caption:
782 PPS Corp. v. Rodriguez
Issues/Legal Principles:
Tenant is not entitled to continued preferential rent leases, even though this tenant's situation is not similar to the Appellate Division's recent ruling in Missionary Sisters of the Sacred Heart v. DHCR & Croseri.
Keywords:
preferential rent; stipulation; Jiggetts; arrears
Court:
Civil Housing Court, Bronx County
Judge:
Hon. Heymann
Date:
June 6, 2001
Citation:
NYLJ, page 22, col 4
Referred Statutes:
RSC §2521.2
Summary:
The landlord commenced a nonpayment proceeding against the tenant who had previously been given a preferential rent. The tenant settled the proceeding by consenting to a judgment for the rent arrears owedžhowever, the arrears were set at the rate of the legal rent, not the preferential rent. Thereafter the tenant retained counsel who sought to vacate the stipulation on grounds that the judgment exceeds the legal rent permitted under the Rent Stabilization Code. The judgment was for the higher rent, as opposed to the preferential rent. The tenant took the position that once a preferential rent was charged, a landlord was bound to continue charging the tenant a preferential rent (plus guidelines increases) for the duration of this tenant's tenancy.

The parties' lease stated that tenant would be given a preferential rent unless legal proceedings, including nonpayment petitions, were commenced, in which case the rent would be at the legal rent and not the preferential rent. Tenant was offered a renewal lease at the legal rent, not the preferential rent. The court was inclined to find that the landlord was required to provide the tenant the preferential rent due to the law that states a renewal lease must be on the same terms and conditions as the prior lease. Additionally, the new Code amendments, effective December 20, 2000, do not categorically state that preferential rents are limited only for specific terms and need not be renewed. Yet, the Appellate Division recently came out with a ruling regarding preferential rents in Missionary Sisters of the Sacred Heart v. DHCR & Croseri (See Housing Court Decisions Archives for May 22, 2001). In that case, the lease specifically informed the tenant of the reason for the rent concession (economics of the market place) and that the preferential rent was limited to the particular lease term for this very reason. Thus, the Appellate Division ruled that the Croseri tenant was not entitled to a preferential rent for the duration of that tenant's tenancy.

By contrast, the court noted in this case the tenant was not informed of a reason for the rent concession and no specific condition was set forth which would clearly trigger the preferential rent's termination, other than the fact that it would expire at the end of the term of the renewal lease itself. Nonetheless, the court felt constrained to follow the Appellate Division and therefore ruled that the tenant was obligated to pay the legal rent and was not entitled to a lease renewal at the preferential rent rate. Therefore, the stipulation was not vacated, nor was the tenant's request to dismiss the petition granted, except to the extent that the tenant receives Jiggett's subsidies, which were paid, so the landlord is entitled to a judgment representing the difference between the legal rent and the amount paid under Jiggetts.


Case Caption:
Federal National Mortgage Association v. Williams
Issues/Legal Principles:
Owner is not required to produce a multiple dwelling registration statement in holdover proceedings where no landlord-tenant relationship exists.
Keywords:
bankruptcy stay; multiple dwelling registration statement; sanctions
Court:
Civil Housing Court, Bronx County
Judge:
Hon. Gonzalez
Date:
June 6, 2001
Citation:
NYLJ, page 22, col 2
Referred Statutes:
CPLR §5015(a)(3); 11 USC §109(g); MDL §7; MDL §325; RPAPL §713; NYCRR §208.42; RPAPL §741; NYCRR §130.-1.1(c)(2)
Summary:
The owner brought a holdover proceeding against the respondent who was the defaulting mortgagor and lives on the second floor of the premises. The respondent obtained a stay on grounds that there was a bankruptcy proceeding pending. However, the owner later learned that no such bankruptcy stay was ever in effect, so now the owner has moved for sanctions against the respondent. The respondent's bankruptcy petition was dismissed for six months (and later dismissed with prejudice) because he failed to comply with a multitude of requirements, including failure to appear for a meeting with creditors and file documentation, he violated a court order, and his bankruptcy petition was dismissed for six months, yet he re-filed prematurely before the six-month period was over.

The court ruled that the respondent never explained or excused his premature bankruptcy filed in derogation of a judge's order and further found that the respondent deliberately misled the Housing Court about whether a stay was in effect by the Bankruptcy Court. As such, the owner lost much time and money in litigation, and the court too was prejudiced. Rather than directly sanction the respondent, the court directed that the respondent pay $1200 per month in use and occupancy from November, 2000 for a monetary judgment of $8400. Up to this point the respondent had lived rent-free.

In response to the owner's motion for sanctions, the respondent argued that the petition should be dismissed because the premises is a multiple dwelling and lacks registration. A multiple dwelling consists of three or more residential units. When the respondent was the owner of the building, he had argued at an environmental control board hearing regarding a recycling violation that the premises was only two dwellings. But the ECB ruled that the premises was in fact a three family building. The court found it ironic that the respondent testified under oath that the premises is a two-family dwelling and now argues differently. He claims, however, that the ECB determination prevails, but the court held that the ECB relied on TRW reports, not municipal records. Thus, the court did not accept the ECB determination as to the status of the building.

The court noted that a holdover proceeding brought pursuant to RPAPL 713 does not require that an owner produce a multiple dwelling registration statement. The court cited prior cases to show that in situations where there is no landlord-tenant relationship there is no reason to require a registration statement. The court therefore did not dismiss the petition on this ground because the argument is inapplicable to this proceeding. The court also did not dismiss the petition on the respondent's second argument that the petition is defective for failing to properly identify the premises as a three family dwelling. But the landlord produced a certificate of occupancy showing the premises is a two family dwelling, which is how it is described in the petition. The court rejected respondent's argument and held that the respondent waived his objection to the description of the premises in light of his prior sworn testimony that the premises is a two family house.


Case Caption:
Foster Arms Apts. Corp. v. Schreiber
Issues/Legal Principles:
Notice underlying nuisance proceeding which fails to set forth specific dates and times when the alleged objectionable conduct occurs is defective, resulting in the petition's dismissal.
Keywords:
nuisance; predicate notice
Court:
Civil Housing Court, Kings County
Judge:
Hon. Chin
Date:
June 6, 2001
Citation:
NYLJ, page 24, col 5
Referred Statutes:
CPLR §3211; RPAPL §741(4)
Summary:
Landlord brought a nuisance holdover proceeding against the cooperative tenant, and the tenant moved to dismiss the petition because the notices were faulty. The notice stated that the tenant was permitting the occupants to "cause unreasonable and disturbing noises" such as "regular persistent banging on the ceiling" and "repeated and unnecessary flushing of the toilet many times in a row," all of which interfered with the rights of the other tenants and constituted objectionable conduct. The court held that these facts are insufficient to establish the ground for the holdover because they merely recite bald conclusions and the notice is devoid of any specific supporting facts, such as dates and times. The tenant cannot be expected to prepare a defense against the vague and ambiguous allegations in the petition. Thus, the court dismissed the case.