Finally, the Court ruled that DHCR did not err in refusing to utilize comparable rents from units in a neighboring building to determine this tenant's fair market rent, as landlord wished. This is because it is DHCR's policy to require that rental data be submitted for each apartment in the same vertical line as the proposed regulated comparable apartment so as to ensure an objective and accurate sampling. Landlord did not comply with this guideline in supplying comparability, as it was his burden to do. The Court also ruled that the DHCR did not err in relying on just one comparable apartment in tenant's building to arrive at the fair market rent.

The court noted that the law holds that if the tenant does not sign a renewal lease the lease "may" be deemed to have been renewed upon the same terms and conditions as the expiring lease. The law allows the landlord to commenced an eviction proceeding if the tenant fails to timely renew the lease. In this case the landlord, not the tenant, is seeking to invoke this law in order to hold the tenant responsible for the entire year tenancy, and therefore as obligated to paying the last month's rent. The court, however, rejected this interpretation as a "perversion of the rent laws." The Rent Stabilization Code is designed to protect tenant's rights and its language permits the landlord to either treat the lease as being renewed by the tenant if no response is received or to commence a proceeding to terminate the tenancy. There is nothing in the statute that automatically renews the lease when the tenant specifically declines to renew the lease and thereafter remains in possession. The fact that the tenant held over and continued to pay the rent as it became due does not trigger a new one year lease term. The landlord had an entire year to commence an eviction proceeding, but choose not to do so. The court held that the landlord cannot now turn a month to month tenancy into a year lease. As a result, the court directed the landlord to return tenant's security deposit and rejected the landlord's request to have said deposit applied to August, 2001, a period when the tenant had already vacated.

Based on statutory law and case law, the court ruled that a rent reduction order remains in effect even after the complaining tenant vacates the apartment. The landlord cannot collect any increases until the DHCR issues a rent restoration order, even if those increases arise from renovations, so long as the renovations were made after the rent reduction order went into effect. The landlord is, however, permitted to collect a vacancy increase because the law only prohibits collecting guidelines increases (such as renewal lease increases) not a statutory increase such as a vacancy lease increase. The court rejected landlord's argument that the four year statute of limitations on overcharge claims is applicable because the rent reduction over occurred in 1987. The court rejected this position because the first overcharge for this tenant occurred within four years of the complaint (i.e., August 1, 1999 was the first overcharge and the counterclaim was filed in or about September, 2001). The court set the matter down for a hearing on determining the overcharge and whether treble damages is applicable.

The court noted that a nuisance must be more than an isolated incident. The objectionable conduct must be ongoing and frequent and threaten the safety and welfare of the other tenants. A nuisance allegation is a question of fact and therefore a trial is necessary. The landlord's motion for summary judgment only includes an affidavit from the managing agent who visited the apartment on only one occasion at which time he took photographs. The affidavit fails to show continuous and ongoing objectionable conduct. Further, no neighboring tenants submitted affidavits complaining that their tenancy rights were infringed upon. Thus, the court held that the landlord failed to show that a trial was not needed. The court also held that a post-judgment cure is discretionary with the court. In this case, the tenant is elderly and has lived in the premises for over 43 years. Because the harm of forfeiture of her home may be disproportionate to the alleged nuisance, the judge was inclined to grant a ten-day cure period if a nuisance is established by the landlord at trial.

By order to show cause returnable January 24, 2002, the landlord asked the court to grant the owner a money judgment for $11,400 as rent owed to date and a judgment of possession in landlord's favor. Tenant's counsel cross-moved for sanctions on grounds that the landlord's motion was frivolous. Landlord's attorney filed a motion for sanctions against tenant for tenant's frivolous sanctions motion.

Generally when service of process is by conspicuous place service (i.e., papers served on the door or under the door after efforts at personal service failed), the court will only have in rem jurisdiction. In other words, a landlord cannot get a money judgment against a tenant (but only a possessory judgment, i.e., the apartment) if the tenant does not show up in Housing Court. The court noted however that an appearance by a tenant in court, or by his or her attorney, generally confers the court with personal jurisdiction so that a money judgment may be granted, if applicable. In this case when tenant's attorney appeared in court with the keys, the landlord's attorney refused to accept the keys and claimed that since tenant appeared by counsel, the landlord was entitled to a money judgment and a possessory judgment. Tenant's attorney claimed that since service was made by conspicuous place service, no general appearance was made in court so therefore no money judgment may be obtained in Housing Court. Yet, landlord argued that the tenant withdrew its motion challenging service and so the appearance on the return date counts and a money judgment is justified.

The court held that by filing a motion to dismiss for improper service, tenant's counsel did not subject his client to the personal jurisdiction of the court. By withdrawing the motion, tenant's counsel did nothing more than subject his client to a possessory judgment. The court relied on past case law for the principle that conspicuous place service cannot support a landlord's request for a money judgment in instances where the process server made only one prior attempt at personal service. The due diligence standard requires two or three attempts at personal service before resorting to conspicuous place service. The court further pointed to an amendment in the CPLR which authorized a defendant to plead improper service by motion or answer without subjecting the defendant to the personal jurisdiction of the court (and thereby a money judgment, if proven). The judge here applied the CPLR rule and gave the landlord only a possessory judgment. The court denied both parties' motion for sanctions.

The Appellate Term reversed, and held that the electricity surcharges may not be considered rent and lease clauses deeming these charges additional rent are not enforceable. The Court reasoned that the rent law makes it unlawful to charge any rent in excess of the legal regulated rent. Thus, lease clauses deeming legal and late fees additional rent have been held to be unenforceable against stabilized tenants. Because the unenforceability is predicated on the proscription of the collection of excess rents, no distinction can be drawn between attorney's fees and late fees on the one hand and utility surcharges on the other. The amended Code provision clarifies that collection of utility surcharges is not an improper circumvention of the prohibition against collecting more than the legal regulated rent. However, the amendment does not provide that these surcharges are collectible as "rent." In fact, the Code was also amended to expressly state that "rent shall not include surcharges." The Court vacated the final judgment for the $7,726 and reduced it to just the rent ($5,563) because the surcharges should not have been collected as rent in Housing Court.

The court found that even though Mayra is not the named tenant on the lease, she is entitled to a lease renewal. She is an immediate family member of the named tenant who lived with her brother since the beginning. Although the landlord complied with the law in mailing the renewal lease to Jose, and although it is not a landlord's duty to inquire who else should be mailed a lease, the court found that in the circumstances herein the landlord had more than adequate notice of Mayra's possessory interest in the property, primarily because of her participation in prior court proceedings, but also because she pays the rent, interacts with the management and Jose defaulted in the past. The court cited past case law for the principle that if an immediate family member resides with the tenant from the inception of the tenancy, they may very well be entitled to a lease renewal in their own right without having to satisfy the succession rights criteria. The court transferred Jose's tenancy interest to Mayra, and therefore the landlord must accept her signing of the renewal lease.

The judge was presented with conflicting case law by both parties, each of which presented case law in their favor. The judge opted to follow the case law favorable to the owner which held that "cohabitation without a marriage does not give rise to the property and financial rights which normally attend the marital relation . . . " The court observed that the parties are not married, and thus any property or financial rights which the woman believes she may be entitled to is not enough to defeat the man's right to maintain a licensee holdover proceeding. The court set the matter down for a trial.

Tenant's position is that since she is a regulated tenant through the Emergency Tenant Protection Act and she had always been in the Section 8 program, the landlord had no right to terminate the Section 8 subsidy payments. Tenant produced a letter from a DHCR employee which she claims supported her position, although the letter did not comment on her specific case. The court disagreed with tenant and ruled that the federal laws under which the Section 8 program derives permits a landlord to terminate the lease and withdraw from the program even in instances of a regulated tenancy. Since the beginning of the program its hallmark, the court noted, is its voluntary nature. No landlord is required to be in the program, nor is there any legal requirement to remain in the program. The court pointed to a 1996 amendment in the federal Housing Act which allowed landlords to terminate a tenant's Section 8 subsidy by withdrawing from the program. The judge observed that the amendment made clear that during the term of a Section 8 tenant's lease, the landlord could not change the terms of the lease. To require landlords to remain in the Section 8 program in perpetuity would, the judge held, defeat the spirit and purpose of the voluntary Section 8 program, and no landlord would sign up, and then low income tenants would be deprived of affordable housing.

The tenant tried to argue that the ETPA regulations regarding lease renewals conflict with the Section 8 prescriptions. Most likely the tenant argued that the ETPA requires an owner to renew a lease "on the same terms and conditions" as past leases. But the court ruled that the ETPA and rent stabilization laws in general are to protect tenants in specified and qualified apartments from excessive rent that might be charged due to temporary housing shortages. The purpose here is inapplicable since the federal government is paying the lion's share of the rent and the rent is established at a market rate. The tenant still has a Section 8 voucher and can go to another apartment and establish a Section 8 tenancy there.

Later the current landlord purchased the building and amended the alteration plans, but did not tell the tenants or the Loft Board of the amended plans. The landlord's architect certified to the DOB that the building and loft complied with all fire and safety requirements and that all work had been completed. A DOB inspector filed a report certifying that the work necessary to issue the certificate of occupancy had been completed. Several months later this DOB inspector was indicted for accepting bribes to issue false inspection reports. The inspector pleaded guilty to a certain bribery but that bribery did not involve the tenant's building. The DOB issued a certificate of occupancy for this building, even though it is uncontested that the renovations required by the approved plans by the Loft Board had not been done.

Once the landlord had the certificate of occupancy, he applied to the Loft Board to increase the tenants' rent and it was at this time that the tenants first discovered what the DOB had done. The Loft Board granted the increase because it did not have jurisdiction to overturn the DOB's issuance of a certificate of occupancy. Then the tenants requested DOB to revoke the certificate. Although DOB acknowledged that the work had not been done, the agency refused to revoke the certificate. The tenants then filed an appeal to the Board of Standards and Appeals to reverse the DOB decision. The DOB and the landlord opposed the tenants' application. Ten violations were issued at the building, each of which related to the work that was supposed to have been done. Nonetheless, the Board upheld the DOB's issuance of a certificate of occupancy.

The tenants appealed further in an Article 78 petition to the Supreme Court and the judge reversed. The Court held that DOB lacked authority to issue a certificate of occupancy because the building failed to comply with numerous safety and fire standards. Thus, the certificate of void. The Board argues that the revocation is improper because the violations that were discovered were correctable and the landlord is willing to correct the violations. The court, however, found this argument irrelevant. This was not a situation where a building was initially compliant and then violations arose. In this case, the building was never compliant with safety and fire standards and therefore the certificate should never have issued at all. The Board also argued that since there is a certificate of occupancy, the Board can supervise that the violations get done. The court rejected this argument because before the certificate of occupancy issued the building was subject to the jurisdiction of the Loft Board. The Board essentially deprived the Loft Board of the agency's ability to monitor the renovations. The court found the Board's decision upholding the DOB's issuance of a certificate of occupancy arbitrary and capricious and annulled it.

The court held that the tenants produced two suitable replacements to sublet the premises at the lease rent. The court found that it was not unreasonable for the landlord to ask more rent from the neighbors because they were not willing to lease out the full term. The second candidate offered by the tenants was, however, suitable and the landlord was unreasonable in trying to get her to pay $7,000 per month. The tenants' right, the court held, to be relieved of liability under the lease vests immediately upon the landlord's withholding consent unreasonably. The judge rendered in favor of the tenant because the landlord unreasonably withheld consent to the second proposed subtenant by demanding more rent from the proposed subtenants than was paid by the tenants.

The tenant argues that the petition should be dismissed because the landlord never served a notice to cure. The court held that the trial record containing "voluminous documentary evidence" reveals that there "was sufficient ongoing illegal criminal activity occurring" in the apartment to support a proceeding brought under RPAPL 711 which does not require a notice of termination. The lease is void by operation of law based on illegal usage. The court granted the landlord a judgment of possession.

The DHCR rejected the MCI application because the re-piping of the building extended sporadically over a four-year period. The work started in 1993. By 1995, the landlord's predecessor stopped making payments to the contractor on grounds that the contractor was suffering financial reverses and would not be able to complete the job. A new contractor was hired in 1997 to finish the work. Based on these facts, the Appellate Division held that the work was performed pursuant to a unified plan. The interruption was due to circumstances beyond the control of the owner or the owner's predecessor, and there was no indication to abandon the project, let alone to conduct the work in a piecemeal fashion.

The Rent Stabilization Code authorizes eviction proceeding against a tenant who "has unreasonably refused the owner access to the housing accommodation for the purpose of making necessary repairs or improvements required by the law or authorized by the DCHR, or for the purpose of inspection or showing the housing accommodation to a prospective purchaser, mortgagee or prospective mortgagee . . . provided, however, that in the latter event such refusal shall not be a ground for removal or eviction unless the tenant shall have been given at least five days notice of the inspection or showing to be arranged at the mutual convenience of the tenant and owner so as to enable th tenant to be present at the inspection or showing."

When the lower court dismissed the petition, the judge concluded that the tenant's professed inability to provide access on the August and September 2000 dates proposed by landlord was the "product" of the landlord's' "unreasonable habit" of proposing access dates on short notice and "without first consulting with the tenant whether such dates were convenient." The Appellate Term held that by deciding the case in this way, the judge "engaged in unsupported issue determination rather than issue finding and improperly engrafted into the governing Code section notice requirements which, though applicable to other types of inspection therein specified, find no relevance to the Code access provisions pertaining to "necessary repairs or improvements." Although the record may support the judge's finding that tenant offered a credible excuse for his absence from the apartment during the series of February 2001 repair dates scheduled by DHCR, the Appellate Term held that there remain issues as to the reasonableness of the tenant's failure to provide landlord with alternative means of access on those dates.

Just like rent stabilized apartments, SRO rent increases are set by the Rent Guidelines Board Orders and the Rent Stabilization Code. The Order in effect in August, 1999 provided for no vacancy increases for Class B multiple dwellings. The Code allows for a vacancy increase for apartments, but not hotels. The Code also provides that SRO tenants be provided a Notice of Rights and if they are not given such notice, a landlord could forfeit "any guidelines lease adjustment authorized for any current lease." The court observed that for the first six months of an SRO tenancy, such a tenant possesses less rights than a rent stabilized tenant, including landlord's right to evict the tenant for no reason. After the six months period, the tenant becomes a "permanent tenant" entitled to regulated protection (although still less rights than stabilized apartments tenants have).

In an opinion letter dated February 17, 1999 by the DHCR, attached as an exhibit to the landlord's motion papers, the DHCR opined that a landlord is entitled to collect a 20% vacancy increase for two year leases and a lesser amount for one year leases entered into after July 15, 1997. The regulations do not distinguish between hotel units and other types of tenancies. The court held: "A clear reading of the applicable provisions reveals that the [landlord] is not entitled to the twenty percent (20%) increase charged to Respondent as the parties never entered into a lease. Had [tenant] executed a lease, [landlord] wold have been entitled to the vacancy increase afforded by the Rent Stabilization Code." Thus, the court ruled that the tenant was entitled to recover overcharges.

The court noted that the mother-in-law could not have moved in either when the tenant's lease expired and he was expected to leave, or by the date of trial since she is still in Poland trying to emigrate. The landlord's claim that she will move in "soon" is only speculative. The court noted that there is no evidence that the father-in-law wants or intends to live in the apartment before his wife arrives. Since he did not testify the court drew a negative inference of his failure to come to court. Were he to move in now, he would be living alone and he is infirm, so who would take care of him? The court posed these questions and concluded at this time landlord lacked the requisite good faith to recover the apartment for the grounds set forth in the Golub Notice.

The court believes that it may be improper for the attorney to act as both advocate and witness. However, the substance of what that testimony is about is not entirely clear to the court. In a prior stipulation, it was agreed that if respondent's counsel felt he may be needed as a witness, then he would notify the landlord's counsel of this. However, no such notice was sent. The Disciplinary Rules prohibit a lawyer from representing a client where it is apparent that the lawyer will be called as a witness on a significant issue in the case, unless disqualification would create a substantial hardship.

The court found that disqualification would serve as a severe hardship to respondent, even though his attorney may have to testify at trial, because the lawyer has been on the case for two years. The court stated that it was not clear what testimony the lawyer intended to present on the witness stand. The lawyer claims it will not create a conflict with his client and is only cumulative of his client's testimony. The lawyer confesses to have intimate knowledge of the financial interdependence between his client and the deceased tenant, but does not believe that his testimony will adversely affect his client's succession rights claim. Where the party seeking disqualification does not clearly show that opposing counsel's projected testimony will be adverse to the client, disqualification is unwarranted. The court ruled that if the trial judge finds counsel's testimony is prejudicial to his client, then the landlord's motion for disqualification can be renewed and the trial judge can determine the issue when it is more clear what exactly the attorney is testifying about.

The reason the tenant wants landlord's counsel's testimony is to show that the landlord knew that the respondent had been residing in the apartment for the past several years as a result of several nonpayment proceedings commenced against the deceased tenant wherein respondent was named as an occupant. The court rejected this reasoning because it is the respondent's burden of proof and he cannot prove his claim that the landlord knew of his presence by calling the attorney to the witness stand. The nonpayment proceedings speak for themselves. Further the files and records kept by the landlord's attorneys are confidential and respondent has offered no valid reason why the attorney-client privilege should be ignored.

HUD wrote the tenant's landlord demanding that the landlord take steps to evict the tenant. In Housing Court, the tenant agreed to move on condition that his parents be able to remain in the apartment. The case was adjourned for five days in order to draw up the settlement papers, and in that period the tenant did move, but on the next court date, the landlord withdrew the offer because HUD insisted everyone in the house, including the parents, had to move.

This court was now faced with the question of how to interpret HUD's rules regarding illegal activity which differ from New York laws. In New York, a tenant may not be evicted for personal use of illegal drugs, but may be only if the activity is related to commercial usage, i.e., selling or manufacturing. A tenant may be evicted if they knew of or acquiesced in illegal usage taking place in the apartment. The court ruled that 8 cigarettes constitutes personal usage and a single seizure does not rise to commercial trafficking. The court found that the tenant's parents did not know of or acquiesce in their son's personal usage, as the marijuana was not in open view and the tenant testified that he doesn't smoke in the apartment. If only New York law was relevant, the court stated that it would dismiss the proceeding.

However, HUD rules must also be regarded. HUD has a "one strike you're out" policy against all tenants. The landlord argues that based on HUD rules and federal law, it is immaterial that the marijuana was present for personal use only and that the parents were innocent. All that is relevant is whether the tenant engaged in "drug-related criminal activity" which is against the lease. The court noted that courts in New York and around the country are split on whether innocent tenants like the parents may be evicted from federally funded housing in instances like this case.

The judge, following HUD rules, looked at the language of the lease and determined that the tenant did not engage in criminal activity because he pled guilty to a violation for unlawful possession of a small weight of marijuana and under the Penal Law a violation does not rise to the level of a crime; a crime is either a misdemeanor or a felony. Since he engaged in no criminal activity and has moved from the apartment, the judge refused to evict the parents.