Date: Fri, 03 Sep 1999 00:57:14 -0400
Subject: Tenants Online 9/2/99
Tenants Online 9/2/99
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In this issue...
1. Exemption Allows Priests to Keep Apartments (Law Journal)
2. HPD Rules on Lead Paint are promulgated
3. Cursing is Not a Reason to Evict a Tenant (Law Journal)
4. Luxury Deregulation Cases (Law Journal)
5. Landlord Can't Evict Without Offering New Apartment (Law Journal)
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Exemption Allows Priests to Keep Apartments
New York Law Journal, September 2, 1999
BY MICHAEL A. RICCARDI
A COMMUNITY of 16 Jesuit priests may continue to live in their West Side
apartment house, according to a decision by a Manhattan Housing Court judge
exempting the group from a ruling that could have subjected them to a
holdover proceeding under the rent stabilization law.
Judge Maria Milin said that the community was not a corporate entity using
the property to provide housing for a transient group of employees.
Therefore, the priests, including the human rights activist the Rev. Daniel
J. Berrigan, were entitled to renewal leases under rent control principles.
In 1997, the New York Court of Appeals ruled that a corporate entity was
not entitled to renewal leases because it was using the premises to provide
housing to employees on a revolving basis.
While the Jesuit order, the New York Province of the Society of Jesus, is
such a corporate entity, the West Side Jesuit Community, one of several
communities within the province, is not a corporate body, Judge Milin
reasoned in 220 West 98 Realty v. New York Province for the Society of
Jesus, Index No. L&T 102336/98.
And the community, not the order, is the primary tenant, she said.
The landlord, Judge Milin said, "in word and deed has treated the WSJC as
the primary tenant of the premises and not as a mere occupant or subtenant
of the Province."
The owners of the West Side apartment building in which the Jesuits live,
220 West 98 Realty, argued unsuccessfully that renewals of the lease for an
indefinite period were depriving it of its property interests, citing the
Court of Appeals decision Manocherian v. Lenox Hill Hospital, 84 NY2d 385
(1997).
In Manocherian, Lenox Hill Hospital rented apartments for use by its
doctors and employees. The Court said that a corporation could not take
advantage of automatic lease renewals under rent stabilization law where it
was leasing property to distribute as a "valuable perk."
Distinction Made
The facts of the Jesuits' residence were far different, Judge Milin reasoned.
"The contrast here is that the WSJC and its members are not faceless and
nameless transient employees of a corporation," she wrote.
It is not solely the Jesuit order, the corporate entity, that is leasing
the premises from the landlord, but the West Side Jesuit Community, which
is an unincorporated subdivision of the order, she said.
"The [landlord] has directly interacted with the WSJC as the actual tenant
of the premises," she wrote, observing that the community as well as the
Province appears on the lease.
Moreover, unlike the situation at Lenox Hill Hospital, where the apartments
were continually being subleased to hospital employees, the West Side
Jesuit Community has enjoyed stability, and has dealt directly with the
landlord, unlike a sublessor.
"[T]he membership of the WSJC has been made known to the [landlord] and has
remained essentially intact since 1988-89," when earlier litigation over
the tenancy was settled.
The landlord was represented by Rosenberg & Estis. The priests and the
Jesuit order were represented by Kellner Chehebar & Deveney.
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LEAD PAINT RULES
from Matthew Chachere, Coalition to End Lead Poisoning
The Proposed HPD Rules for implementing the new NYC Lead Paint Law (Local
Law 38) were published yesterday in the City Record (August 30, 1999) at
page 2618.
I have not reviewed them yet, so I cannot give any substantive take on
them. Please note that a public hearing will be held on the proposed rules
on October 1 from 10 am to noon, at HPD, 100 Gold Street, Room 1R3.
Comments can be made in writing on or before Oct 1 to Vito Mustaciuolo,
Asst. Commissioner, Office of Housing Preservation, 100 Gold Street, Room
4-P6, New York, NY 10038.
If you don't have ready access to the City Record and want a copy of the
regs, email and we'll try to get them faxed to you, or
better yet, we are looking into scanning the regulations and circulate them
as an Acrobat PDF file.
By the way, the Comptroller's report on lawsuits against the City (reported
in today's Newsday) is available online in .pdf format
at http://www.comptroller.nyc.ny.us/BUREAUS/LAW/claim98.pdf , and a
summary is available at Bureau of Law and Adjustment
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CURSING IS NOT A REASON TO EVICT A TENANT
New York Law Journal
Wednesday, September 1, 1999
Cursing is constitutionally protected conduct and cannot be the basis for
evicting a tenant, a Staten Island Civil Court Judge has ruled. The
landlord, Kirso Property Co., began the eviction process after the tenant,
Jodi Brief, allegedly on five occasions yelled offensive statements at
fellow tenants. Ms.Brief, who has been diagnosed by one doctor as having an
unspecified psychotic disorder, claimed that her cursing was the result of
the mental illness. In dismissing the case, Judge Philip S. Straniere ruled
that a landlord, in order to evict a tenant for allegedly blurting out
ethnic and racial slurs and obscenities, must have testimony from other
building residents to back up a common law cause of action for creating a
nuisance. "There is nothing in the record that indicates the words and
actions of the [tenant] amounted to 'fighting words' or 'created a clear
and present danger' or that there was any physical action by the tenant
that has been perceived as a threat to someone's personal safety," Judge
Straniere wrote.
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LUXURY DEREGULATION CASES
The Tide Turns Against Landlords When a Tenant Defaults
New York Law Journal, July 7, 1999
By Jeffrey Turkel and Warren Estis
IN THREE recent decisions, the Appellate Division, First Department, has
ruled that the Division of Housing and Community Renewal (DHCR) is
statutorily authorized to open tenant defaults in luxury-deregulation cases
where the tenant proffers a timely and adequate excuse for his or her default.
In a fourth recent case, the court held that a tenant's sworn statement
that he timely mailed income information to DHCR was sufficient to vacate a
default order. In all four cases, the First Department indicated that where
possible, it wants luxury-deregulation cases decided on the merits, rather
than on agency-declared defaults.
Early Days, Simple Rule
In the early days of luxury deregulation, the Appellate Division laid down
a simple rule: where a tenant fails to provide DHCR with income information
during the statutory 60-day period, the agency is "mandated to issue a
deregulation order." (Nick v. DHCR.)1 Landlords were elated by this
outcome, tenants were outraged, and the Legislature -- still reeling from
the epic 1997 rent-regulation fight -- was not about to enter the fray.
Earlier this year, two First Department determinations indicated that the
court was looking to modify its default rule in luxury-deregulation cases.
In Pledge v. DHCR,2 the Appellate Division affirmed DHCR's order of
default, citing the court's previous decisions in Nick and Bazbaz v. DHCR.3
The court pointedly rejected the tenant's claim that a de minimis default
should not result in a forfeiture of a rent-regulated apartment, stating
that a tenant has no vested right in continued regulatory protection. But
the First Department also observed that the tenant's excuse for defaulting
was plainly "inadequate," thereby implying that an adequate excuse might be
sufficient to open a default.
The second case was Sudarsky v. DHCR.4 In Sudarsky, the tenant defaulted
but asserted in the Article 78 proceeding that during the 60-day period he
was clinically depressed and his wife was out of town. The First Department
rejected the tenant's argument, stating that it saw no reason to depart
from its prior decisions based on a "belated" excuse. The combined message
of Pledge and Sudarsky was obvious: an adequate excuse, if not belatedly
raised, would be sufficient to vacate a default. It was only a matter of time.
Excusable Default
The time came on April 13, 1999, in Elkin v. Roldan.5 In Elkin the tenants
timely responded to the landlord's Income Certification Form, claiming that
their 1993 and 1994 incomes did not exceed the statutory limit. The
landlord thereafter asked DHCR to verify the tenants' claims. DHCR did not
timely receive the tenants' answer to the agency's 60-day notice -- the
answer was postmarked after the deadline had passed -- and ten months later
issued an order of default.
On administrative review, the tenants asserted that they had mailed the
answer before the deadline. DHCR rejected this claim. New York Supreme
Court Acting Justice William Wetzel thereafter annulled DHCR's order,
finding that the tenants' default was excusable. Justice Wetzel noted that
the late filing was inadvertent and that the tenants' income appeared to be
below the statutory limit. The court also observed that no party had been
prejudiced by the brief delay.
The First Department affirmed Justice Wetzel's ruling, holding that "[w]e
do not believe that the deregulation statute proscribes DHCR from
considering a tenant's excusable default at the initial administrative
level." The Court distinguished Elkin from Nick and its progeny, stating
that in those cases:
"... the tenant never submitted the Verification Notice to DHCR during the
initial level of administrative proceedings. Thus, in the absence of the
required information from the tenant, DHCR had no choice but to order
deregulation."
The First Department concluded:
"Because the deregulation order in this case was based on DHCR's erroneous
conclusion that late filings could not be accepted, we annul that order.
Furthermore, we agree with the IAS court that DHCR's refusal to accept
petitioner's late filing was arbitrary and capricious in these
circumstances. There was only a minimal delay, apparently from office
failure, a meritorious defense to the petition, and no prejudice to either
the landlord or DHCR."
The First Department issued a similar determination shortly thereafter in
Seymour v. DHCR.6 In Seymour, DHCR issued a default order against the
tenant in a luxury-deregulation case. Justice Eileen Bransten of the New
York Supreme Court reversed, finding an excusable default. The Appellate
Division affirmed Justice Bransten, stating:
"Although the tenant failed to provide the income verification information
DHCR had requested within 60 days of DHCR's request ... she did provide
such information shortly after the deregulation order was issued when she
requested the Rent Administrator to reconsider that order. The decision not
to reconsider the deregulation order at this initial administrative level
is arbitrary and capricious given the tenant's compelling proof of
household income well below the then statutory threshold of $250,000."
Finally, on June 3, 1999, the First Department issued its determination in
Shapiro v. DHCR.7 Affirming Justice Walter Tolub's annulment of DHCR's
default order -- the tenant's response to DHCR's notice was three days late
-- the First Department ruled:
"The order annulling DHCR's deregulation order should be affirmed. In light
of petitioner's timely responses to Income Certification Forms, his
submission of evidence that his annual income fell below the statutory
threshold, his de minimis delay in responding to the Income Verification
Form, the fact that the requested information was received by DHCR long
before the agency belatedly issued its deregulation order, nearly one year
subsequent to the expiration of the period within which DHCR is to issue
such determinations .... and in light of the fact that neither the agency
nor the landlord suffered any prejudice by reason of petitioner's three-day
delay, Supreme Court properly determined that DHCR's refusal to accept the
late filing was arbitrary and capricious."
Tenant's Easier Burden
The First Department's March 23, 1999, decision in Doyno v. DHCR 8 concerns
a variation on the standard default theme. In Doyno, DHCR did not receive
the tenant's response during the 60-day period. The tenant thereafter swore
that the document had been mailed within the deadline. On administrative
review, the agency asked the tenant for objective proof of mailing, which
the tenant could not produce. Justice Lewis Friedman thereafter annulled
DHCR's default determination. The First Department affirmed Justice
Friedman, stating:
"The tenant's affidavit attesting to timely service of his answer, his
submission of a copy of the answer bearing a date coinciding with the
claimed date of service, and DHCR's admitted receipt of the answer in
another proceeding months before the Rent Administrator's determination and
the filing of the tenant's PAR in this proceeding raised a rebutable
presumption of mailing ... that should not have been summarily rejected.
DHCR's imposition of a requirement of additional 'objective' proof of
mailing, such as a certified mail receipt, not required by statute or its
instructions to the answer form, was arbitrary and capricious." (687
N.Y.S.2d at 107)
Doyno, unfortunately, may encourage gamesmanship by unscrupulous tenants.
Pursuant to Elkin and its progeny, a tenant who fails to respond during the
60-day period must thereafter proffer a timely and adequate excuse to
vacate his default. This is risky business, as one can only guess what an
administrator or a court will deem adequate. But Doyno gives dishonest
tenants an easier burden: a sworn statement of mailing, a back-dated answer
form and a timely filed PAR appear to be enough to earn the tenant a second
chance. Because the landlord and the agency could never prove that the
tenant did not mail and/or back-date the answer, the tenant would always
prevail.
Landlords Should Settle
This is not to say that the First Department will open up any default. In
Londin v. DHCR,9 the tenant defaulted and proffered an excuse for the first
time in her Article 78 petition. The Appellate Division affirmed DHCR's
default order, holding that the tenant's "excuse for such failure was not
raised in the administrative proceeding and therefore may not be considered
in this judicial proceeding."
Notwithstanding the First Department's apparent change of heart, tenants
are still advised to submit all of the requested income information during
the 60-day period. Correspondingly, landlords who initially prevail before
the agency in default cases should strongly consider settling the matter
should the tenant commence an Article 78 proceeding.
----------------------
Notes
(1) 244 AD2d 299, 664 NYS2d 777 (1st Dept. 1997).
(2) _ AD2d _, 683 NYS2d 76 (1st Dept. 1999).
(3) 246 AD2d 388, 667 NYS2d 720 (1st Dept. 1998).
(4) _ AD2d _, 685 NYS2d 704 (1st Dept. 1999).
(5) _ AD2d _, 688 NYS2d 61 (1st Dept. 1999).
(6) NYLJ, May 13, 1999, at 27, col. 5 (1st Dept. 1999).
(7) NYLJ, June 7, 1999, at 26, col. 2 (1st Dept. 1999).
(8) _ AD2d _, 687 NYS2d 107 (1st Dept. 1999).
(9) _ AD2d _, 687 NYS2d 111 (1st Dept. 1999).
*********
Warren A. Estis is a founding partner at Rosenberg & Estis PC. Jeffrey
Turkel is a partner at the firm.
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LANDLORD CAN'T EVICT WITHOUT OFFERING NEW APARTMENT
BY MICHAEL A. RICCARDI
New York Law Journal
Friday, August 27, 1999
A NOT-FOR-PROFIT company that is redeveloping city housing cannot evict
present tenants without offering an equivalent alternate dwelling, a
Manhattan Housing Court judge has ruled in a case of first impression
interpreting a key section of redevelopment law.
Judge Doris Ling-Cohan ruled that 15 tenants residing at 515 W. 174th
Street in Washington Heights could not be forced to move immediately so
that Quisqueya Housing Corp. could get on with rehabilitating the property.
Quisqueya, she ruled, made a mistake in attempting to evict the tenants by
starting a holdover proceeding, rather than by offering them notice of
"substantially similar housing accommodation ... nearby ... at the same rent."
Quisqueya obtained the property from the city under the Neighborhood
Redevelopment Program, which turns over buildings to non-profit concerns
for rehabilitation.
The developer is a not-for-profit company whose directorships are divided
between the Association of Progressive Dominicans (ACDP under its Spanish
acronym), a group aligned with City Councilmember Guillermo Linares and by
the Manhattan Valley Development Corp., according to Kenneth Rosenfeld, the
tenants' lawyer and director of legal services for the Northern Manhattan
Improvement Corp.
Representing Quisqueya Housing was Marc H. Hyman of Sontag & Hyman in
Manhattan. He said his clients are preparing to go through the process of
giving notice to the tenants per the court's holding.
"We don't agree with the decision, but it is quicker and easier to start
over than it would be to appeal," Mr. Hyman said.
The redevelopment project was opposed by long-term tenants who feared
eviction, Mr. Rosenfeld said. The sponsors, he said, refused the tenants'
offer to participate in future management of the building in exchange for
temporarily vacating the site during rehabilitation work.
The redeveloper then filed the eviction notices, but without any guarantee
of alternate housing. The tenants asked the court to dismiss the notices as
inadequate under the NRP.
That was the impasse confronted by Judge Ling-Cohan in Quisqueya Housing
Corp. v. Various Tenants and carries 15 L&T index numbers.
Looking at the developers' eviction notices, Judge Ling-Cohan held them
fatally defective for failing to notify tenants of equivalent alternative
housing.
The ruling, she said, was one of first impression interpreting the adequacy
of notice to tenants who must vacate premises to allow rehabilitation work.
"The law required that the tenants be offered an actual apartment in the
same building or nearby, that they could move to," said Mr. Rosenfeld. The
tenants would live in the alternate housing temporarily and then be moved
back into the rehabilitated units.
Mr. Rosenfeld said the case was the first in which tenants had organized to
oppose a redevelopers' plans under the NRP.
Meaningful notice, Judge Ling-Cohan reasoned, had to include notice of
suitable alternative housing as required by the Neighborhood Redevelopment
Program.
She rejected Quisqueya Housing's argument that it could not provide such
notice immediately because it could not determine whether alternate housing
would be similar until it met with each tenant.
"[T]he statute does not require consideration of these factors, only that a
'substantially similar housing accommodation' be offered," Judge Ling-Cohan
wrote.
Ramon Gutierrez of the Northern Manhattan Improvement Corp. also
represented the tenants.
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Date: Sat, 11 Sep 1999 15:43:30 -0400
Subject: Tenants Online 9/11/99
Tenants Online 9/11/99
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In this issue...
1. Real-Estate Moguls Place Early Bets on Mayoral Race (Post)
2. Excerpts from Recent 'Realty Law Digest' columns (Law Journal)
-Hotel Unit Subject to Luxury Deregulation Provisions of Rent
Stabilization Law
-Attorney Sanctioned for Permitting Employee at Housing Court
Information Table to Prepare and Sign Legal Papers.
-Attorneys' Fees - Prevailing Party
-Attorney Sanctioned for Abuse of Discovery Process
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REAL-ESTATE MOGULS PLACE EARLY BETS ON MAYORAL RACE
By DAVID SEIFMAN, NY POST, August 28, 1999
At least seven prominent real-estate executives have given the maximum to
three or more contenders.THE scramble to succeed Mayor Giuliani has
resulted in a mad dash for cash - with a tightly-bunched group of
candidates pursuing the same wealthy developers.
An analysis of Campaign Finance Board filings turned up at least seven
prominent real-estate executives who have contributed the maximum allowed
by law to three or more contenders in the crowded mayoral field.
Bernie Mendik, chairman of the Real Estate Board of New York, led the pack
by writing $4,500 checks to Bronx Borough President Fernando Ferrer, Public
Advocate Mark Green, Comptroller Alan Hevesi, former Deputy Mayor Fran
Reiter and City Council Speaker Peter Vallone.
Mendik's generosity didn't stop there. His wife, Susan, chipped in
identical sums to the same five mayoral hopefuls.
The couple's total contributions: a hefty $45,000.
Peter Kalikow and his wife, Mary, each "maxed out" for Vallone, Hevesi and
Ferrer, for a total of $27,000.
Daniel Brodsky dropped a total of $16,500 on Hevesi, Green, Reiter and Ferrer.
Burt Resnick left $15,500 with Hevesi, Green, Reiter and Vallone - while
Leonard Litwin gave those four $14,500.
Political insiders said the new term-limits law, which will force Giuliani
to leave office no later than Dec. 31, 2001, is propelling the
multiple-candidate contributions.
"This is the first time you've had a field with so many candidates and no
incumbent," said Jerry Skurnik, a veteran political consultant.
Incumbents tend to draw the biggest share of the bucks.
One source in the real-estate community said it's not uncommon to give to
more than one candidate, especially when there's no incumbent.
"You may know more than one of them on a social basis. You don't want to
tell them no. And it's impossible to tell who's going to be the winner.
You're hedging your bets," the source said.
Solicitations intensified "big time" last month, when the candidates rushed
to swell their war chests before a filing deadline.
Still, none of the developers is complaining.
"These are not poor people," said the source. "Fifteen, twenty-thousand.
That's what they spend on a vacation."
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Excerpts from Realty Law Digest
New York Law Journal
By Scott E. Mollen
HOTEL UNIT SUBJECT TO LUXURY DEREGULATION PROVISIONS OF RENT STABILIZATION LAW
This case involves the issue of whether a hotel unit becomes "exempt from
rent regulation under the luxury deregulation provisions of the Rent
Stabilization Law [RSL] [when] (i) there has been no permanent tenant of
the [unit] for the four years prior to the present tenant's filing of an
overcharge complaint, and (ii) the last rent paid for the unit by the prior
occupant was at the rate of $115 per day," which translates to a monthly
rent in excess of $2,000.
The owner had commenced a nonpayment proceeding against an occupant of a
class B hotel. The occupant sought dismissal, arguing that the owner had
erroneously alleged that the unit is not subject to rent regulation because
the rent at the transient rate exceeds $2,000 per month and falls under the
high rent exception.
Hotels are regulated under the RSL unless statutorily exempted. RSL §26-506
provides that:
... this law shall apply to dwelling units in all hotels except hotels
erected after [July 1, 1969], whether classified as a Class A or a Class B
multiple dwelling, containing six or more dwelling units, provided that the
rent charged for the individual dwelling units on [May 31, 1969] was not
more than [$350/month] or [$88/week];
The occupant asserted that the transient rate is not determinative of
whether a unit is subject to stabilization.
Rent Stabilization Code (RSC) §2520.6(f) provides that the legal regulated
rent is "[t]he rent shown in the annual registration statement filed four
years prior ... plus ... any subsequent lawful increases and adjustments."
The occupant emphasized that the owner had always registered the unit with
DHCR at a rent of $161.14 per week, much less than $2,000 per month. The
occupant also contended that no high rent exemption exists under RSL
§26-504.2, and therefore, the unit is protected by rent regulation laws.
The occupant also asserted that she is a "permanent hotel tenant protected
by the rent regulation laws" and that under RSC §2422.5(a)(2), upon request
for a lease, an owner must:
grant a lease commencing on the date such request was made at a rent which
does not exceed the legal regulated rent for a term of at least six months.
The hotel occupant who requests such a lease becomes a permanent tenant.
The owner argued that the unit became exempt from rent regulation under the
Luxury Decontrol Provisions of the RSL. The owner contended that the last
rent paid and the "first rent" agreed upon by the occupant was $115 per day
or $3,450 per month, which allegedly exempts the unit from rent regulation,
since the monthly rent exceeds $2,000 per month. The evidence indicated
that the premises had been occupied exclusively by transients during the
prior four year period.
The court noted that pursuant to RSC §2520.11(g)(1), when a hotel unit is
occupied transiently, the unit is exempt from rent regulation and that
under the 1997 amendments to the RSL, an examination of the rental history
is limited to a four year period.
The owner had submitted a letter from DHCR that stated that:
With reference to the "renovated" unit, you state that the unit was rented
through March 31, 1992, at $700 per month. Thereafter, it has been
registered as exempt due to owner occupancy. Where the period of temporary
exemption has been four years or more, a "first rent" negotiated between
the owner and tenant, subject to subsequent guidelines and other lawful
increases (assuming compliance with registration requirements), would be
recognized by DHCR. The former rent, statutory vacancy increase and cost of
new equipment and improvements are not relevant. Based upon a "first rent"
of $2,000 or more per month, the apartment would be considered deregulated
under high-rent vacancy decontrol. Because of the length of the period of
temporary exemption, DHCR would be precluded, in the event of an overcharge
complaint filed by the new tenant, from examining the rental history prior
thereto. Rent Stabilization Law Section 26-515a, amended by the Rent
Regulation Reform Act of 1997, "RRRA-97," precludes examination by the DHCR
of the rental history of a housing accommodation for the period prior to
four years preceding the filing of an overcharge complaint.
The court concluded that the unit "is exempt from rent regulation under the
luxury deregulation provisions of the Rent Stabilization Law because (i)
there has been no permanent tenant of the accommodation for the four years
prior to the present tenant's filing of an overcharge complaint, and (ii)
the last rent paid for the unit by the prior occupant was at the rate of
$115 per day, which amounts to well over $2,000 per month."
Accordingly, the court granted judgment to the owner. Martha H. Washington
Hotel v. Prince, New York Law Journal, May 5, 1999, p. 29, col. 6, Civ.Ct.,
N.Y. Co., Malatzky, J.
NEITHER PARTIES NOR ATTORNEYS — ATTORNEY SANCTIONED FOR, INTER ALIA,
PERMITTING EMPLOYEE AT HOUSING COURT INFORMATION TABLE TO PREPARE AND SIGN
LEGAL PAPERS.
A nonpayment proceeding was dismissed for a "myriad" of procedural and
substantive problems. The defects included a petition which was falsely
signed by someone who was not the petitioner and which was not prepared or
completed by the petitioner, although the petitioner had alleged that he
had completed the petition. Further, the notary notarized a blank space on
the affidavit of service and the affidavit of service on the demand notice
was unsigned.
The court found that the petitioner's attorney had given an employee at the
Housing Court information table permission to place the attorney's name on
all court papers. The attorney had given such permission by telephone and
had never looked at the court papers before she had provided authorization.
The attorney contended that she gave the employee "carte blanche authority"
because she "considered him a Housing Court employee who had expertise in
the area and knew what was required." The attorney claimed that she thought
she was dealing with a person who had been "sanctioned by and with official
status with the Housing Court." The employee had led the attorney to
believe that it was appropriate for him to prepare the papers since he
worked in the courts.
The court sanctioned the attorney for permitting the use of her name on
court papers without reviewing the papers beforehand and opined that she
must be "responsible and accountable for whatever happened thereafter
regarding those papers once her name was put upon them." The court believed
that the "fraudulent behavior, including false testimony and forgery might
have been averted" if the attorney had simply overseen and investigated the
situation before she had consented to the use of her name in commencing the
proceeding.
The court observed that since the employee was neither a party nor an
attorney, "he is able to walk away without penalty." The court noted that
this is the latest among a series of cases in which this court has been
involved with nonparty imposters who are able to engage in a multitude of
fraudulent practices and go forward unsanctioned by the courts. Such
glaring examples cry out for a change in the ability of the court to
sanction nonparties who engage in egregious conduct, which exhibits
reprehensible behavior and are able to walk away sanction free. Hopefully,
the Legislature will help the court fight against and stop these practices.
The court further opined that it is "time to recognize that things such as
fraudulent testimony, forgeries and fake activities, result in damage that
goes to the core or heart of our judicial system. It is definitely time,
now to stop the fraud and restore the damage to the judicial system that we
all hold so very dear to the heart of our democratic way of life."
The court referred the employee's activities to the District Attorney and
the conduct of the notary public to the Deparment of State. The court then
imposed a $100 fine against the attorney and explained that the small
sanction is attributable to the court's awareness that the attorney was
"relatively inexperienced and was in some respect duped by the housing
court worker at the information table." The court also awarded counsel fees
to the respondents. Boyd v. Kellman, New York Law Journal, June 16, 1999,
p. 32, col. 6, Civ.Ct., Kings Co., Callender, J.
ATTORNEYS' FEES - PREVAILING PARTY
An owner commenced a nonpayment proceeding. The tenants had asserted claims
for breach of warranty of habitability (warranty) predicated upon numerous
common area and individual apartment complaints. The tenants advanced a
"novel legal theory" that they were entitled to "heightened protection
under the habitability statute by virtue of the 'luxury' status of the
building premises—a subjective standard which, while adopted by the trial
court, was resoundingly rejected by three unanimous appellate panels. ..."
Although the tenants had achieved abatements at trial of 10 percent for
common area conditions and of one to 11 percent for individual apartment
complaints, the tenants "ultimately came away ... with no more than a
one-year five percent abatement for faulty elevator service."
The court explained that considering the "true scope of the dispute
litigated, followed by a comparison of what was achieved within that scope
..., it is clear that the landlord should be accorded the status of
'prevailing party' and entitled to attorneys' fees pursuant to the leases.
..."
A dissenting opinion argued that although Peachy v. Rosenzweig, 215 A.D.2d
301, supports the majority's opinion that the landlord is the prevailing
party, in the particular circumstances of "these regretfully contentious
and unnecessarily protracted 'summary' proceedings, 'neither party can
claim to have prevailed' ... just as neither can claim to have been merely
the hapless victim of the other's combative litigation style." The dissent
believed that the owner had "contributed substantially to preventing an
expeditious resolution of the proceedings" and that a remand to the Civil
Court "at this late stage would impose undue hardship on all parties."
Comment: Warren A. Estis, of Rosenberg & Estis P.C., the attorney for the
owner, had argued that a determination of prevailing party must consider
the totality of the circumstances and that the tenants had failed to
prevail on their primary argument. Sheldon H. Solow d/b/a Solovieff Gallery
Co. v. Otis Bradley, App.Tm., 1st Dept., Index No. 98-250/269 decided July
28, 1999. Parness, P.J., Freedman, Davis, JJ. Dissenting opinion by
Freedman, J.
ATTORNEY SANCTIONED FOR ABUSE OF DISCOVERY PROCESS, INCLUDING USE OF
SUBPOENAE FOR PRIVILEGED INFORMATION ON NON-PARTIES
Tenants moved for sanctions against an owner and the owner's counsel for
frivolous motion practice and unethical behavior involving subpoenaed
documents. The owner had claimed that the tenant and the tenants' counsel
had engaged in a campaign involving intimidation and harassment against the
owner. The court found that the record demonstrated that it was the owner's
counsel who had engaged in inappropriate conduct.
The owner's counsel had made seven motions and that the instant motion had
been made on the eve of trial, after the proceeding had been adjourned for
three months. The owner's moving affirmation had been dated two months
before the instant motion. Thus, the motion had been prepared, but had been
held for two months until the "new eve of trial."
The tenant had claimed that the owner's counsel had attempted to breach the
attorney/patient privilege protected by CPLR §4504, by service of subpoena
and directly contacting the tenant's dentist. The owner asserted that it
had not committed any improprieties since the records were either in court
and the owner had copied the records from court files or the individuals
had sent the records to the owner's counsel without instigation by the
owner's attorney's office. The owner also argued that there was no invasion
of the tenant's privacy since the tenant's dentist had voluntarily
submitted the records in response to the judicial subpoena.
The court described the argument that the dentist had "voluntarily
submitted to breach" as "ludicrous." The court stated that the dentist had
complied with the subpoenas because he thought he was legally required to
do. The owner claimed that the annexation by the tenant of dental bills to
an affirmation in opposition to an earlier motion somehow entitled the
owner to subpoena further information from the dentist. The court explained
that "it is an abuse of process to use a subpoena to obtain confidential
and/or privileged records of a non-party" and "[t]he use of a subpoena to
breach a privilege is sanctionable." The court further noted that it had
previously discussed the issue of the tenant's right to privacy and that
the owner had already received four separate decisions relating to
permissible discovery. The court emphasized that "no additional motion was
made before this court for additional specific discovery or requesting
further clarification regarding discovery from the court." Moreover, an
affirmation submitted by the owner stated that "other entities unilaterally
sent the documents to our office even though we did not request that they
do so." The court found such statement to be "untrue."
The court further found that the owner's counsel had engaged in a
"deliberate circumvention of the court's rules and procedures by soliciting
and obtaining documents by abuse of judicial subpoenas" and such action is
sanctionable.
The court concluded that the Appellate Division, First Department had
consistently "criticize[d] the impropriety of service of a subpoena duces
tecum upon a non-party witness as a discovery device, to secure document
production."
The court emphasized that the owner's attorney had knowingly submitted a
false statement to the court and ordered sanctions against the owner's
counsel in the amount of $1,000. The court explained that "this amount is
intended not only to deter counsel from any further attempts to interfere
with the path of a judicial subpoena to a non-party witness but also to
admonish counsel for asserting a material factual statement that is false."
The court further opined that the "unnecessary delay and utilization of
this court's time, resources and personnel to determine the facts, as well
as the legal issues of this motion indicate that the conduct exhibited by
petitioner's counsel was frivolous and the petitioner's motion to quash was
frivolous as well." Marshall Estates v. Ahrens, New York Law Journal, Aug.
11, 1999, p. 23, col. 5, Civ.Ct., Housing Pt., N.Y. Co., Spears, J.
-------------------------
Scott E. Mollen is a partner at Graubard Mollen & Miller, a member of the
Mayor's Advisory Committee on the Judiciary and an adjunct professor at St.
John's University School of Law.
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Date: Thu, 16 Sep 1999 13:27:22 -0400
Subject: Tenants Online 9/16/99
Tenants Online 9/16/99
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In this issue...
1. Informant being shown the door (Voice)
2. A Likable Landlord? Yes! (News)
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The User Who Got Used
Village Voice, September 1, 1999
by j.a. lobbia
A bird on the hand: Tony Merritt, who also goes by code name Tony Baretta,
says his work as a confidential informant requires him to keep a low
profile. (photo: Michael Schmelling)
For years, Tony Merritt Did the Dirty Work for Cops and Landlords, Helping
Them Bust and Evict Drug Dealers. So Why Is the Times Square Hotel, His
Latest Home, Showing Him the Door?
When the Kenmore Hotel on 23rd Street reopened on May 4, politicians
flocked to the ceremony, anxious to be associated with a project that had
reincarnated the building from a murderous drug den into 326 units of
affordable housing. In a famous 1994 raid, U.S. Marshals had seized the
roiling crack house and turned it over to a nonprofit agency. Now, five
years and more than $40 million later, the decrepit old Kenmore Hotel was
making its debut as the spiffy new Kenmore Hall. But amid the speeches and
gushes of awe at the Kenmore's reinvention, no one seemed to notice that a
certain middle-aged man who had played a role in the hotel's transformation
wasn't there. That's because Tony Merritt, once an insider at the Kenmore,
was unwelcome.
From 1991 to 1998, the 57-year-old Merritt not only lived at the Kenmore
as a tenant; he was a confidential informant (CI) for the New York Police
Department, fingering drug dealers who plied their trade in the Kenmore's
shoddy hallways and cubbyhole rooms. Merritt, who had learned the ins and
outs of the drug trade from his own seven-year crack addiction, says he
helped cops make hundreds of arrests, many of which led to evictions of
drug dealers at the single-room occupancy (SRO) hotel.
But by August 1998, Merritt himself was embroiled in controversy at the
Kenmore. Merritt's landlord was suing him for back rent totaling $2150. And
fellow tenants had sued him, alleging Merritt had subverted their efforts
to start a tenant group, though a judge would later rule that Merritt had
"violated no rights of the plaintiffs."
Then Merritt caught a lucky break. Just as the Kenmore was being
rehabilitated, drug problems emerged at another SRO, the Times Square on
West 43rd Street, and Merritt's CI status landed him a room there. The
Times Square, a former welfare hotel that had also been "rescued" by a
nonprofit agency called Common Ground Community, turned to the NYPD for
help. Pleased with Merritt's work at the Kenmore, cops recruited him to be
the in-house snitch at the Times Square. Under Merritt's tenure, 49 drug
arrests were made and several evictions followed.
Now, a year later, Merritt is being evicted from the Times Square. On
August 10, housing court judge Bruce Kramer ordered him out by September
10. Common Ground executive director Rosanne Haggerty says Merritt must
leave because he was never a tenant, only a "licensee" in a police
investigation that has reached its conclusion. Merritt argues that Common
Ground is dumping him because he did his job too well, finding the much
heralded Times Square far more infested with drugs than Haggerty cares to
admit. And he charges that the nonprofit, known in housing circles for its
political steam, reached out to the NYPD to cut the investigation short,
fearing that too many drug arrests would jeopardize Common Ground's cachet.
The investigation ended in late March.
Haggerty is out of the country and was unavailable for comment, but she did
testify in detail about Merritt's allegations during his housing court
trial. There, she admitted that she told the police captain in charge of
the investigation that she wanted it ended. But she denied any
inappropriate intervention, saying police stopped the operation because the
drug problem had been dealt with.
Police sources close to the investigation refused to discuss it on the
record. But tenants say drugs remain a problem at the Times Square, and
since May— two months after the investigation ended— five drug arrests have
been made there, says Deputy Inspector Denis McCarthy, borough commander of
Manhattan South Narcotics. "We're monitoring the location, and it's not
like we're going to stop an investigation because somebody feels there's
too many people being arrested," says McCarthy, who was not involved in the
effort. "That's not the way we work."
Merritt's case, with his accusations of criminal behavior and coverup,
rivals the most acrimonious landlord-tenant dispute. Drawn years ago from
the hills of his boyhood home in the South to New York City, Tony Merritt
is at once an insider wise to the ways of crack dealers and cops, and an
outsider whose very speech— marked by a genteel drawl than has not worn
away after 17 years in the city— gives him away. Merritt is on the way out,
and he knows it.
"I've opened up many doors, usually by having them kicked in, your honor,"
Merritt quipped during his housing court case before Kramer. "In this case,
I may get the door. I know I'm washed up." But hours later, pondering
Kramer's decision to let him stay at the Times Square until September,
Merritt credited his role as an insider. "I think the judge gave me some
professional courtesy," mused Merritt. "He realized we're both kind of in
the same line of work— law enforcement. I'm just on the low end of the
totem pole."
Merritt may indeed live on a rung that most people would consider lowly—
out of work and short on money, he rarely eats but is reluctant to accept
handouts. He walks everywhere because he can't pay subway fare. He
represents himself in court, and submits handwritten legal papers. But he's
smart enough to quote from Abraham Lincoln and to win an extra month's
tenancy from a landlord who wants him gone yesterday. A user who was used
first by law enforcement authorities and then by a well-regarded social
service agency, Merritt is now trying to bring his own sense of justice to
the fore— a justice he admits is partly rooted in vengeance.
"I don't consider myself a snitch or something; I do it because I was
betrayed," says Merritt, reflecting broadly on his career as a confidential
informant. He says he first became a CI at the Kenmore to avenge dealers
who had hooked him. He was happy to continue the work at the Times Square,
but feels cheated out of an offer he claims Common Ground made to him to
become a paying tenant when the investigation ended; Haggerty says no such
deal was made. Now, Merritt says, he's whistle-blowing on Common Ground.
Is Merritt telling the truth? Of the half dozen law enforcement types who
have worked with him, from high-ranking federal agents and prosecutors to
NYPD cops and detectives, one calls him "a habitual liar" who is "very
manipulative." But others describe Merritt as "decent and trustworthy,"
call his work "helpful," and say his information is "super reliable. On a
scale of one to 10, I'd give Tony a 12."
When Merritt arrived in New York City on a bus in 1982, he wasn't looking
for a gig as a police informant. With a high school degree, two years of
business school, and no wife or children, Merritt says he ditched his job
as a real estate manager in his home state, which he asked not be disclosed
to protect family members. "Being raised in the mountains, it was always my
dream to come to the big city with the bright lights," says Merritt. "Even
the stuff you saw on TV: the millions of people, the gang lifestyle. . . . "
Merritt quickly became entrenched in the city's underbelly. He says he quit
a job as a Harlem property manager when a landlord asked him to torch
squatter-occupied buildings. Merritt moved on to real estate management in
the South Bronx. As he tells it, his life changed on one spring night on
Friday the 13th— he doesn't remember which year— when he went out for
cigarettes. "Fifteen kids jumped me at the front door of Bronx-Lebanon
hospital and stabbed me in the back of the head and through my heart," says
Merritt. "They broke my jaw with a brick. I almost died."
After a long surgery and a hospital stay, Merritt says he feared returning
to his South Bronx apartment. He took the subway to Manhattan, and ended up
living in Madison Square Park for a year. In excruciating pain from the
stabbing, Merritt says he found relief in the local analgesic of choice,
crack.
"The doctors wanted to give me Demerol, but I remembered it was supposed to
be highly addictive," Merritt says, recalling a lesson he says he learned
in his job as a "postmortem technician" who assisted in autopsies as part
of government research on aortas; Merritt says his task was to remove
hearts from dead children. "I didn't want to be addicted, but the pain was
so bad and a friend said, 'Tony, if you smoke this you won't feel pain.
Take a hit.' Well, I just kept on hitting."
Merritt eventually got a room at the Kenmore in 1987 by offering to be a
security guard for then owner Tran Dinh Truong, from whom the feds
eventually seized the property. "The Kenmore was a crack haven then, and at
first, I enjoyed that," says Merritt, who says he sobered up in fits and
starts. "But when I got off it, I got extremely angry with the dealers and
all their cars and gold that I'd probably paid for with my habit."
By 1991, the crack-wracked Kenmore was the focus of city and federal
narcotics agents, and Merritt offered them his services as an insider. He
eventually became an official confidential informer for the NYPD, although
he was using drugs for some of that time. Public documents show Merritt's
last drug case was in February 1997, when he was arrested for possession of
crack that cops say Merritt spit out of his mouth as they approached him
one afternoon on a downtown avenue. The charges were reduced to disorderly
conduct, perhaps because of his cooperation with the police. Says one
source familiar with the Kenmore at the time, "It seemed to me like Tony
never got locked up when he should have."
Merritt calls himself a confidential police operative and takes the job
seriously. He has two code names: Tony Baretta, based on his love of birds,
and Tony Rico, based on the law cited by a Kenmore tenant who sued Merritt
and a host of government officials. He says he painstakingly follows police
protocol, which requires him to observe drugs in a person's possession at
least twice within five days, and to report that to police within three
days of the last sighting. He even made his own forms to make it easier for
detectives to get warrants. He is paid for his work— the rate is determined
by the amount of drugs recovered in a bust— but says he doesn't do it for
the money. In his seven-month stint at the Times Square, Merritt says he
made about $850.
"I could collect cans and bottles and make more money, your honor," he told
Kramer. "But my life has been dedicated to trying to get rid of drug
dealers because of what happened to me. . . . I've had more than 700 people
arrested. I'm very good at what I do."
When Common Ground took over the Times Square in 1990, the hotel was
crime-ridden. The nonprofit ultimately won millions of government dollars
(and mountains of glowing press reviews) for turning the hotel into a much
lauded "social experiment" in housing tenants troubled by substance abuse,
mental illness, and homelessness. The effort had made Haggerty and her
652-room hotel media darlings and powerful figures in the world of
nonprofit social-service agencies, a cosmos that has burgeoned as welfare
has become a private rather than government endeavor.
But in about 1996, Haggerty sensed trouble, according to testimony she gave
in Merritt's housing court case where Merritt, working as his own attorney,
questioned her on the stand. About two years before Merritt was brought in,
Haggerty said, drug trafficking began to percolate; she said two tenants
were key. Haggerty enlisted the NYPD, and in 1997, undercover cops came in
"to see if they could be successful," Haggerty said. "But they kind of
looked like undercover cops, so they weren't." That's when police suggested
a scheme to bring Merritt to the Times Square as a "tenant" working as
their informer.
On August 8, 1998, Merritt was set up in room 440 of the Times Square. On
September 10, cops raided the SRO and arrested seven people. On September
24, another raid yielded six crack arrests. A story in The New York Times,
which is the hotel's neighbor a few doors east and a loyal fan of Common
Ground, reported the arrests as part of an ongoing effort to rid the
building of drugs. Haggerty told the Times the raid was sending a message
of "zero-tolerance" for drug dealing.
The raids continued, and in all, police say 49 arrests were made when the
investigation ended in late March— well before the job was complete,
Merritt says. "The problem is, I did my job too well, and they were worried
because I have names of 53 other people who should be arrested for drugs,"
he says.
Haggerty testified that she did call Captain Kenneth Kelleher of the
Manhattan South Narcotics unit to tell him that she wanted the
investigation stopped. (Kelleher declined to comment for this story.)
Merritt asked if she also called a contact in the D.A.'s office. "No,"
testified Haggerty. "It was not his investigation. It was the police, so
the police were the ones we had to deal with on the termination of the
investigation."
Merritt took Haggerty's response as an admission of interference, sending
him offtrack. He lost his line of questioning, and when he resumed,
Haggerty refined her answers, saying she had only sought Kelleher's
"advice" about the investigation's progress and about "when we thought we
could safely terminate the investigation. . . . It had everyone there [at
the hotel] on pins and needles," she said, adding that the investigation,
while necessary, "had a traumatic downside." But she repeatedly denied that
she feared uncovering a widespread drug problem that could jeopardize
Common Ground. Kramer dismissed Merritt's allegation regarding interference
with the investigation as irrelevant to his housing case.
Haggerty told Kramer that Merritt's complaints began only when he was asked
to move out after the investigation ended. "This is someone who has spent
the last three months tormenting me and our staff," she told Kramer. "It is
a very sad and troubling situation."
For his part, Kramer said he was disturbed by three flyers distributed at
the Times Square, two of which called Haggerty a drug lord. "This is pretty
wild stuff," Kramer admonished Merritt, who agreed, but said he was not the
author of the flyers. Shortly thereafter, in what was fast becoming a
bizzare housing court proceeding, Merritt raised his shirt to show Kramer
the road map of scars on his chest caused by the Bronx beating. He had been
arguing that he needed more time at the Times Square because he requires
surgery for a bone infection in his jaw. Haggerty said she's already given
Merritt extensions and that he had failed to prove he needs medical attention.
Merritt did not take the stand in the case. Kramer ruled that Common Ground
was in fact right: Merritt was never a tenant and had no right to stay.
"For whatever reason, this investigation was called off in March of 1999,"
Kramer said. "They asked you to vacate and you did not do that. Quite
frankly, I understand why you did not do that because I suspect in reality
... you had no where else to go."
Kramer postponed Merritt's eviction until September 10. And he called the
Times Square's forbidding Merritt to have visitors "heinous." (Merritt says
a relative who came to visit was not allowed in his room.)
"Desperate people do desperate things," Kramer summed up. "Here's a person
who now says he has nowhere to go and could potentially be homeless. He did
serve a very useful purpose. He put himself in harm's way. I'm not
defending what he did afterward. . . . I'm just suggesting that you treat
Mr. Merritt with respect."
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A Likable Landlord? Yes!
Harlem owner praised
By RALPH R. ORTEGA
Daily News, September 14, 1999
Kenneth Friedman is developing a reputation as New York's tenant-friendly
landlord. A tenant-friendly landlord?
Sylvia Alston of Harlem knows they are often hard to find, but she didn't
have to look far.
Take the green awning, engraved entrance mat and lobby mirrors at her
apartment building, the impeccably clean Belvedere Apartments on 150th St.
in Sugar Hill.
There are flowers, framed pictures and wallpaper in the hallways, with
plants growing outside. The Belvedere also has a furnished community room
in the basement and a garden in the backyard.
Such amenities are rare in the Belvedere's working-class neighborhood.
Alston credits Friedman, the building's owner, for putting up the money
that made most of the improvements possible.
He also has paid for community Halloween, Christmas and Labor Day parties
seven years in a row.
Alston has a handful of proclamations signed by local officials and area
legislators honoring Friedman for his contributions to the building and the
neighborhood. She said she hopes to present them to him at City Hall in the
near future.
"He's just a kind person in his own right," said Alston, a 65-plus retired
nurse.
She noted that there are other buildings with good landlords, "but I don't
think they go to the same lengths Friedman does."
He is in good standing with the city's Department of Housing Preservation
and Development, officials said, and is highly regarded throughout the
neighborhood as a landlord with a lot of heart.
"Friedman ... has made contributions," said Vicky Gholson, founder of
Designed Environment for Experimental Learning, a nonprofit organization
addressing local community problems.
Gholson was so impressed by Friedman that she included him among the
honorees at her organization's annual "Heroes and Sheroes" celebration Sept. 5.
The event, at the Senior's Sculpture Garden Park on W. 153rd St., singles
out people for upholding the neighborhood's quality of life.
Friedman believes providing for tenants' needs comes naturally in the
business started by his father, Alfred, in 1947.
"It's just the way I was brought up," said Kenneth Friedman, who owns about
40 buildings in Manhattan and 25 in the Bronx.
However, he believes that Alston, the Belvedere's self-proclaimed building
manager, deserves more praise than he does.
"The truth of the matter is she turned that building into something
special," Friedman said.
Alston began adding her own special touches to the Belvedere after moving
in about 15 years ago.
She raided local thrift shops to decorate the hallways, painted the
elevator and was quick to pick up trash whenever it crossed her path.
Alston's enthusiasm caught on with other tenants,which motivated Friedman
to step up his support for the Belvedere.
"When you see tenants appreciate something, you just want to do more for
them," he said.
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Date: Sun, 26 Sep 1999 00:40:21 -0400
Subject: Tenants Online 9/25/99
Tenants Online 9/25/99
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In this issue...
1. A Tenant's Home Is His Landlord's Castle (Voice)
2. Odds Worsen in Hunt for Low-Income Rentals (Times)
3. Tenant Can Challenge Apt. Deregulation (Law Journal)
4. Recent LL/T Decisions of Interest (Law Journal)
THIS WEEK in NYC Housing Court Decisions:
Daughter is entitled to succession rights despite the fact that
tenant-mother legally sublet premises for the two-year period immediately
prior to mother's permanent vacatur of apartment. Brusco v. Rivera.
http://tenant.net/Court/Hcourt/current.html
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A TENANT'S HOME IS HIS LANDLORD'S CASTLE
Village Voice, September 28, 1999
by j.a. lobbia
New Book Reviews The Origins of New York City's Famous Landlord-Tenant
Trouble
"It is not a business to attract men of good feelings..." So wrote
journalist David Blaustein in 1904, when he set out to describe New York
City landlords of his day. Blaustein's attention was drawn to what he
called 'cockroach landlords,' small businessmen who leased entire buildings
from owners in return for the right to collect rents— a pyramid scheme of
sorts. Blaustein concluded that 'the tenant at the bottom of the heap pays
for it all.' The 'cockroach' 'scheme is long gone, and while Blaustein's
severe indictment is 95 years old, his conclusion arguably holds true
today. Blaustein's is one of many views presented in a just-published book
on the history of New York City landlords, Urban Castles: Tenement Housing
and Landlord Activism in New York City, 18901943, written by Jared N. Day
and published by Columbia University Press. Although Day's research ends in
a period five decades past, he explores underpinnings that still shape the
deeply ingrained and famously cantankerous landlord-tenant relationships of
today. Day chronicles the origins of major events like the passage of rent
regulations, as well as minor but lasting changes like the initiation of
once scandalous but now commonplace security deposits.
The most outstanding persistent trait of New York City housing— its
scarcity— was already a problem well over a century ago. In 1850, a
bursting immigrant population forced tenants into subdivided homes,
flood-prone cellars, and cheaply constructed houses "so tightly built," in
the words of Mayor Philip Hone, "that they could not stand alone, and, like
drunken men, require the support of each other to keep from falling."
Landlord-tenant laws were skimpy at best, essentially obliging landlords
only to provide a unit, while tenants were required to pay rent regardless
of conditions.
Buildings were largely unregulated, and landlords had many ways to cheap
out and cheat safety. Fire escapes were brought to legally required
thicknesses with a coating of "black wash," loam dug up from cellars was
used in place of mortar, and buildings were erected with retaining walls
one brick thick, coated with plaster. Collapses were common.
Even after the turn of the century, owners used "three-months paint," a
chintzy wall coating that turned dangerously flammable within months. In
1911 McClure's Magazine warned, "Let a lamp or a candle near enough to it
while it is still damp, and fire would go around the room or down the
tenement hall as fast as a man could run."
Housing reforms, usually undertaken by crusading middle-class New Yorkers
who aimed to "rescue" tenement dwellers, were endlessly proffered. But
landlords could rely on government ineptitude or corruption to ensure that
the strictest plans never made it into law, or if they did, that they were
not enforced. Landlords kept the upper hand until 1901, when the Tenement
House Act set fire, light, and health standards that threatened owners
seriously enough to spur them into political coalitions. The main citywide
group was the Greater New York Taxpayers Association (GNYTA).
As the 1901 provision became law, tenants began to organize, relying on
their own numbers rather than the "goodwill" of outsiders to prompt change.
Rent strikes erupted randomly. But tenants often ended up evicted— the law
favored landlords— and the strikes fizzled. By the teens, however, tenants
had won more legal rights and landlords had been given more responsibility.
Rent strikes, often organized by Socialists, became more regular and
far-reaching.
By the winter of 19171918, wartime coal rationing combined with unusually
cold conditions brought tenants— including middle-class, politically
mainstream rent-payers— out on strike. Landlords moved for evictions,
arguing that leases did not require them to provide heat. But in many
cases, judges sided with tenants. To this day, lack of heat remains a key
tenant organizing tool since, as a building-wide problem, it draws
neighbors into a collective effort. Heatless apartments have given rise to
a current tenant motto, a twist on a radical labor saying: Don't freeze,
organize.
One of the most strident tenant communities evolved in Brooklyn's
Brownsville, where tenants organized entire blocks into strikes, protesting
not only lack of heat but multiple rent hikes. GNYTA hired thugs to break
up picket lines, and violence was not uncommon. GNYTA also retained private
detectives to harass strikers. Although GNYTA would later disavow violence
because of the bad name it gave landlords, other owners' groups spun their
battle as a patriotic effort, calling tenant unrest "a direct result of
Bolshevist agitation."
The Red Scare of the 1920s did indeed deflate some of the tenant movement,
but middle-class renters sustained it, though in a less radical manner.
Landlords and tenants alike suffered during the Depression, which spelled
the end of the immigrant amateur landlord (including the "cockroach"
variety) and ushered in a more professional class of real estate operators.
During World War II, rent controls were established nationally. They never
expired in New York City, where a preposterously tight market has made for
a housing emergency (defined as a vacancy rate below 5 percent), a
designation that has not been lifted.
For all the transformations of landlord-tenant relations outlined in Urban
Castles, fundamentals remain that keep the balance skewed against tenants.
The demand for housing outweighs the supply. Landlords choose real estate
because they believe it offers a better return than other investments. As
long as this essential commodity remains in short supply and in private
hands, it is not likely to generate good feelings among either renters or
their landlords.
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ODDS WORSEN IN HUNT FOR LOW-INCOME RENTALS
New York Times, September 24, 1999
by DAVID STOUT
WASHINGTON -- In a sad side-effect of the robust economy, more people with
low incomes are struggling to find rental housing that they can afford, the
Department of Housing and Urban Development said on Thursday.
From 1995 to 1997, the number of "struggling renter households" increased
by 3 percent, to almost 8.9 million from about 8.6 million, the department
said. A struggling household was defined as one whose income was at or
below 30 percent of the median income for its region.
Meanwhile, the supply of affordable rental units for such households has
declined. Using the latest figures available, the department said
affordable rental units decreased by about 5 percent, for a drop of 372,000
units, from 1991 to 1997.
"The sad truth is that more and more people working at low-wage jobs, as
well as older Americans living on fixed incomes, are being priced out of
the housing market as rents rise," Housing Secretary Andrew M. Cuomo said.
"We felt that the rental situation was getting worse. These numbers
document that in a painful way."
The secretary said rents had been rising for several years as landlords
charged what they thought the market would bear in times of prosperity. In
1997 and 1998, rents rose twice as face as general inflation, Cuomo said.
The rent-rate increase was 3.1 percent nationwide in 1997, compared with a
1.6 percent rise in the Consumer Price Index; in 1998, the respective
figures were 3.4 percent and 1.7 percent.
Cuomo said the report was based primarily on data from the Census Bureau's
latest survey of American housing trends. He said the release was not timed
for political reasons, though he seized upon the report as supporting the
need for the 100,000 new rental-assistance vouchers called for in President
Clinton's budget for the fiscal year that begins next week.
The government estimates the nationwide median family income at $47,900:
that is, half of American families have incomes over that figure, and half
under. In or near big cities with high housing costs, incomes tend to be
higher, and therefore the gap between "struggling households" and people
with enough money to live comfortably is wider.
In New York City, the "struggling household" ceiling for a family of four
is $16,000, the report said, meaning that $16,000 is about 30 percent of
the median income for a New York family of four.
The department said about 116,000 people are on waiting lists to live in
public housing in New York City, and about 203,000 are on lists to get
rental-assistance vouchers. The wait for each category is about eight
years, the department said.
The department said that it could not immediately determine how much the
New York waiting lists had increased in the last two years, but that a
nationwide survey of 40 big-city housing authorities showed waiting-list
increases of 10 percent to 25 percent over that time.
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TENANT CAN CHALLENGE APT. DEREGULATION
New York Law Journal, September 17, 1999
BY CERISSE ANDERSON
A TENANT whose apartment was deregulated after she allegedly failed to
provide proof that her income was below a legal threshold for rent
stabilization should get another chance to show that the deregulation was
in error, a state appellate court ruled yesterday.
The Appellate Division, First Department, said that the tenant's diligence
in responding to past requests for income information should be considered
as support for her argument that she did not respond to DHCR because she
never received a request to verify her income.
The First Department, in In re Futterman v. NYS Division of Housing and
Community Renewal (DHCR), ordered Pamela Futterman's challenge to the
deregulation of her apartment at 135 Central Park West be returned to the
Supreme Court for a hearing to determine whether she ever received a
request for verification of income from the DHCR.
The four-judge panel noted with disapproval that the 1995 legislation
providing for decontrol of luxury apartments was "to deregulate apartments
of tenants earning in excess of $250,000, rather than to deregulate
apartments because of a failure to respond to requests for information by
the DHCR under circumstances such as those present in this case."
Under the provisions of New York City's Administrative Code §26-504, a
landlord may apply to deregulate an apartment renting for $2,000 or more a
month and whose tenants have a total annual income greater than $250,000
for each of the two preceding calendar years.
Ms. Futterman's landlord in 1994 served her with an Income Certification
Form which she promptly returned. It disputed her claim that she earned
less than $250,000 and petitioned the DHCR to verify her income. The agency
requested that Ms. Futterman verify her income, which she did, and the DHCR
denied the petition, finding her income was below the $250,000 threshold.
The landlord served Ms. Futterman with another income form the following
year which she completed, and again it petitioned the DHCR to verify her
income. The DHCR said it mailed her a request for verification of income
which she did not return, and therefore the agency deregulated the apartment.
The agency said the tenant's petition for review was denied because she had
failed to rebut the presumption that the request for income verification
had been received, since it had been properly mailed.
"[I]t is true that the mere denial of receipt of a letter that is shown to
have been properly mailed does not overcome the presumption of delivery,"
the appellate panel said in its unsigned memorandum. "Tenant's denial of
receipt in this case is, however, buttressed by convincing supporting
circumstances."
Prior Cooperation
Given the fact that the tenant had timely responded to the landlord's
requests for income information in 1994, 1995 and again in 1996, during the
pendancy of this proceeding, the judges said it was apparent that Ms.
Futterman recognized the importance of responding to the various notices.
"Juxtaposing (a) tenant's denial of receipt of the DHCR's request for
income verification information, (b) tenant's course of diligent conduct,
and (c) the incomprehensibility of knowingly failing to respond to DHCR's
request with the drastic consequences that flow from such a failure, it is
apparent that tenant has overcome the presumption of delivery and has
created an issue of fact necessitating a hearing," the First Department said.
The court further noted that "this proceeding seems to emanate from a
wholesale repetitive attempt by landlord to deregulate apartments at the
subject building. It would appear in this situation that the effort is
being made regardless of whether there is any reason to believe tenant
meets the regulatory threshold. Landlord, in making such an effort, is
acting in a manner inconsistent with statutory aims."
In her petition for review of the deregulation of her apartment, Ms.
Futterman had attached copies of her income tax return showing that she
earned less than one-third of the regulatory threshold, the decision said.
Presiding Justice Betty Weinberg Ellerin and Justices Peter Tom, Richard W.
Wallach and David Friedman formed the appellate panel.
Ms. Futterman was represented by Mitchell P. Heaney. Roderick J. Walters
appeared for the DHCR, and Jeffrey R. Metz, of Borah, Goldstein, Altschuler
& Schwartz, was counsel for the landlord.
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RECENT DECISIONS OF INTEREST
New York Law Journal
LANDLORD/TENANT
Dismissal Is Not Warranted by Failure To Plead Out-of-City Status, Registration
IN A NONPAYMENT proceeding, one issue was whether a landlord of a
non-multiple dwelling located within New York City, who resides outside the
city, must plead that fact in the petition. Landlords who live out of the
city must designate, in a registration statement, a city resident to serve
as "managing agent" for the premises. Here, as landlord did not plead the
registration statement, tenants moved to dismiss. The court ruled that to
add a procedural requirementû not currently part of a statute or rule, to
be pleaded in the petition as a prerequisite to having the matter heard,
would violate Due Process. However, this did not mean that landlord, as
part of his prima facie case, was excused from proving compliance with the
Administrative Code. Although dismissal was not required and there was no
other "penalty," landlord must prove its filing. Brocato v. Guisto,
Richmond Civil Court, Judge Straniere.
LANDLORD/TENANT
Amended Answer Is Allowed for Tenant To Assert Spiegel Law, Rent Overcharge
IN A NONPAYMENT proceeding, tenant who received public assistance and a
shelter allowance was at first pro se. She complained of intolerable
conditions in her apartment; the Department of Housing Preservation and
Development had found violations. After tenant obtained counsel, counsel
sought to submit a late amended answer and counterclaims to assert a
Spiegel Law defense for the poor conditions and a rent overcharge claim.
The court allowed tenant to file an amended answer. It said that a rent
overcharge claim was not untimely, noting that an overcharge is to be
calculated from the rent that was registered four years before the most
recent registration, not from the date the lease was signed. It denied
tenant's motion for summary judgment because there were unresolved issues
of fact, one being whether landlord repaired all the violations, as
claimed. First Time Realty Co. v. Payton, Kings, Civil Court, Housing Part
18A, Judge Sikowitz.
LANDLORD/TENANT
Tenants' Agreement to Give Up Possession Is Not Vacated for Lack of Counsel
RESPONDENT LONGTIME residents of a rent-stabilized apartment sought to
vacate a settlement agreement, negotiated in December 1998, which gave
possession of the apartment back to petitioner landlord. The underlying
proceeding had alleged nonpayment of rent, with arrears of $15,407. In the
agreement, tenants would surrender the apartment and landlord would waive
arrears and pay the tenants $10,000 and moving expenses. Tenants now argued
that they improvidently entered the agreement while unrepresented by
counsel and that the husband-tenant did not have the authority to bind the
wife-tenant. The court refused to vacate the agreement, saying that the
mere fact of acting without benefit of counsel was insufficient grounds to
establish good cause for vacatur. Also, there had been a valid power of
attorney for the husband to act for the wife. Rainbow Construction Co. v.
Leibowitz, Bronx, Civil Court, Housing Part 18K, Judge Roman.
LANDLORD/TENANT
Lease Provision Citing Real Property Law §235 Is Interpreted to Permit
Multiple Roommates
LANDLORD COMMENCED this holdover proceeding following respondent's
admission, in a prior nonpayment proceeding, that he shared the premises
with three roommates. Landlord alleged that this violated a provision of
the lease. The lease stated that the apartment could be occupied by the
tenant, his immediate family and "occupants" as defined "in accordance
with" Real Property Law §235-f. The court said that, while §235-f allows a
lease to limit roommates to one, the statute did not contain any
prohibition or presumption against more than one. The court ruled that
therefore the standard lease provision at issue permitted more than one
roommate. It said that, particularly as the lease provided for "occupants,"
rather than "an occupant" or "one occupant," the provision must be
interpreted to permit more than one occupant. Roxborough Apts. Corp. v.
Becker, New York, Civil Court, Part Y, Judge Billings.
LANDLORD/TENANT
Lease Amendment Reducing Tenant's Rent Is Found to Upset Prior Stipulations
on Arrears
A NONPAYMENT proceeding was commenced by landlord in 1998. Several
stipulations followed in which tenant agreed that she owed rent of $1,437
monthly, the market rent. Landlord was now trying to evict tenant, who had
not paid all alleged arrears. Tenant moved to vacate an eviction warrant
and set aside a judgment of July 29 because she had been paying her rent.
She presented a lease amendment that had been signed by herself and
landlord's manager in June, after tenant had provided all recertification
documents needed to adjust the rent. The amendment identified tenant's rent
as $124 monthly, effective back to Feb. 1. The court found that the arrears
stated as the basis for evicting the tenant were completely erroneous. It
rejected a proposed stipulation of Aug. 9, vacated the warrant and deemed
the judgment satisfied. Fulton Park Associates v. Walker, Kings, Civil
Court, Housing Part H, Judge Callender.
LANDLORD/TENANT
Breach of Stipulation by Elderly Pro Se Tenant Does Not Result in Judgment
of Possession
IN A HOLDOVER proceeding based on nuisance, the parties had entered a
stipulation in 1998 in which the 73-year-old then-pro se tenant agreed not
to curse, annoy, harass or strike other tenants. About a month later,
landlord exercised his right to restore the proceeding for a hearing on a
claimed breach and to seek eviction. Although there were issues on whether
the stipulation should be enforced, the court said it was binding and
enforceable unless the judge who ordered it vacated it. To prove a breach,
the court allowed landlord to rely on evidence of conduct more recent than
the conduct alleged in the motion. Petitioner proved a breach of the
stipulation since its effective date, but the court held that, rather than
this resulting directly in a judgment of possession, a trial was to be held
on the original allegations of nuisance. Olshan v. Mandas, New York, Civil
Court, Part 15, Judge Billings.
LANDLORD/TENANT
Illegal Sublet Proceeding Is Dismissed; Notice to Cure Did Not Cite Lease
Provision
IN THIS HOLDOVER proceeding based on an alleged illegal sublet, petitioner
landlord sought to recover possession of the premises. Respondents moved
for summary judgment dismissing the proceeding, arguing that the notice to
cure and notice of termination did not set forth the particular paragraphs
of the lease that were allegedly violated and that formed the basis of the
proceeding. Although the lease had a provision specifically prohibiting
assignment or sublet without the landlord's prior written consent, the
notice to cure did not refer to the particular lease provision. The court
granted summary judgment to respondents, ruling that the notice was
insufficient to give the landlord grounds to terminate the tenancy. It also
noted that Real Property Law §226-b, cited in the notice to cure, does not
create a separate cause of action for the landlord. Stanford Leasing Corp.
v. Stewart, Kings, Civil Court, Part G, Judge Wendt.
-----------------------------------------------------------------
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The Tenant Network(tm) for Residential Tenants
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Information from TenantNet is from experienced non-attorney tenant
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Date: Tue, 28 Sep 1999 01:42:39 -0400
Subject: Tenants Online 9/28/99
Tenants Online 9/28/99
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To unsubscribe, see the bottom of this newsletter
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In this issue...
1. HPD Wants to Know -- if you've been harassed
(unlike DHCR, HPD still pretends it likes tenants)
2. Greens, WFP Challenge Lead-Sellout Councilmember
3. Special Election Needs your Support
4. Landlord's Right to Evict (Law Journal)
HOUSING NOTEBOOK ON THE WEB
Met Council's "Housing Notebook" (broadcast on WBAI-FM on Mondays at 7
p.m.) is now available over the Internet. Go to www.wbaifree.org and follow
the link to the live Webcast of WBAI-FM. You will need RealPlayer (free
from www.real.com/products/player/downloadrealplayer.html
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REMEMBER WHEN THE SUPER PUSHED YOU DOWN THE STAIRS?
The Department of Housing Preservation and Development (HPD) is seeking
comments from anyone on whether harassment has occurred at the following
addresses:
318-322 West 51st Street
324-328 West 51st Street
344 West 46th Street
In order to legally convert a SRO residential hotel (citywide) or to
perform alterations or demolitions in the Clinton Special District, an
owner/developer must obtain a "Certificate of No Harassment" from HPD.
Harassment can take many forms: threats, use of physical force, deprivation
of essential services such at heat, water, gas or electric, unlawful
eviction and relocation practices or other conduct intended to cause
persons to vacate the premises or waive rights related to their occupancy.
Written or oral comments as to whether harassment occurred at the premises
should be submitted to the Anti-Harassment Unit, 100 Gold Street, New York,
NY 10038 Attention: Flora Simmons by October 22. To schedule an appointment
for an in-person statement call (212) 863-8266.
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GREENS, WFP CHALLENGE LEAD-SELLOUT COUNCILMEMBER
Met Council Tenant/Inquilino, September, 1999
by Kenny Schaeffer
In 1998 voters in New York State guaranteed ballot status to two new
political parties, the Green Party and the Working Families Party, by
giving each of them more than 50,000 votes in the gubernatorial election
against George Pataki. Tenants in New York City are beginning to realize
that by only considering candidates from the Democratic Party, we lose the
ability to hold our representatives accountable when they succumb to the
corrupting influence of campaign contributions from the real-estate industry.
The 48th City Council district in Brooklyn (stretching from Flatbush to
Manhattan Beach) is a case in point. In 1997, the district’s former
Councilmember, Democrat Anthony Weiner, solicited real-estate contributions
by promoting a landlord “self-certification” bill, which would have
required the city to erase housing-code violations whenever an owner
claimed to have corrected one. Fierce pressure from Weiner’s constituents
and tenants around the city forced the withdrawal of this bill.
In 1999, Councilmember Mike Nelson, who won Weiner’s Council seat in a
special election after he was elected to Congress, supported the
real-estate industry and Mayor Rudolph Giuliani in gutting the laws that
protect babies and toddlers from lead-paint poisoning. In New York City,
30,000 children already suffer from lead poisoning, caused by exposure to
lead dust and lead paint in homes and schools. It can cause permanent brain
damage, learning disabilities, violent behavior, seizures, or death.
Mike Nelson gave lip service to these concerns, yet he voted against the
interests of children and for the real-estate industry when he supported
this law.
Now he has the gall to hand out campaign literature taking credit for
making it a wonderful bill [see Nelson campaign flyer on page 8]. But don’t
kid yourself. It is not a wonderful bill. The new law (Local Law 38) was
unanimously condemned by doctors and public-health experts, because it does
not protect children against lead dust, by excluding friction areas like
windows and doors from coverage; it allows owners to self-certify
lead-removal work; and it makes it almost impossible for the families of
children who suffer from lead poisoning to win lawsuits against negligent
landlords.
Next March, the Council will vote on the laws that protect the homes of
1,000,000 rent-stabilized households in New York City. These rent
regulations must be renewed by March 31. The real-estate industry, which
inflicted grievous damage on the rent-regulatory system between 1993 and
1997, will be out for blood.
That makes this year’s election—in which Mike Nelson is running to finish
Rep. Weiner’s unexpired Council term—especially significant. Nelson is the
only incumbent facing the voters this year, so this race will be a key
indicator of voters’ reaction to the Lead Poisoning Act of 1999 and what it
suggests about the renewal of the rent laws next spring.
Can Mike Nelson be trusted to stand up to the real-estate industry, and say
“no” to its slick arguments and thick checkbook? Mike Nelson voted “no” on
children and tenants on June 30 when he voted for the Lead Poisoning Act.
Now tenants in the 48th District will have an opportunity to vote “no” on
Mike Nelson, thanks to the ballot access gained in 1998. The Green Party
has nominated Sonya Ostrom, a 71-year-old peace and anti-nuclear activist,
who will face Nelson in the general election on Nov. 2.
The Working Families Party has also endorsed Ostrom. According to director
Dan Cantor, the WFP is trying to “build a competent, lively, multiracial
and class oriented electoral vehicle,” based on community organizations and
unions. “We need to build a political organization that can articulate our
values in public life.”
1999 is a “warm up” for the elections in 2000, when WFP intends to contest
a “great number” of state legislative races in New York City and upstate,
according to Cantor. In the Ostrom-Nelson race, as well as in the Manhattan
race to fill the council seat vacated by Andrew Eristoff, “we want to get
people used to voting on our line,” he adds, because WFP intends to be
“part of a coalition that produces the new City Council when term limits
open up the majority of Council seats in 2001.
Cantor was not defensive about WFP’s nomination of Peter Vallone as its
standard bearer in 1998. “We did what was necessary to get the ballot
status. “We did what was necessary to get the ballot status we need to
change the political landscape in New York. People make history, but not
under circumstances of their own choosing. The task now is to establish our
presence on issue, including affordable housing and rent regulation.” At
its September board meeting, Met Council will finalize plans for this
November’s elections. With the Council deciding the fate of the entire
rent-regulatory system in March, tenants around the city will be watching
the race in the 48th District very closely.
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SPECIAL ELECTION NEEDS YOUR SUPPORT
Date: Sun, 26 Sep 1999 13:36:00 +0100
From: Leslie Cagan
As you probably know, term limits mean that in the 2001 City Council
election we will have the opportunity to dramatically change the make-up of
the City Council of NYC. In fact, only about a dozen of the present 51
members of the council will be able to run again for that office.
Progressive activists and organizations are already discussing possible
ways to have the greatest impact on re-shaping the City Council.
We have all been given a tremendous opportunity to get a jump start on this
process with a special election that is scheduled for this November 2nd in
the 48th District in Brooklyn. Most of you getting this email don’t live in
that district...but don’t delete just yet.
The incumbent Council Member is Democrat Mike Nelson. He is being
challenged by a long time community activist, SONYA OSTROM. One of the most
exciting things about Sonya’s race is that she is running on the Green
Party line, as well as on the Working Families Party line - the two
independent parties which won ballot status in last year’s election.
I don’t know a lot about Nelson (except that he voted with Vallone in
support of the landlords on the vitally important lead poisoning struggle
earlier this year), but I do know about Sonya Ostrom. I first met Sonya in
the anti-war/peace movement. She is the president of Metro Peace Action and
has been a long time activist in efforts for peace in every corner of the
world. She is also a community activist with strong ties in her own
neighborhood. For almost 20 years Sonya taught in the NYC public schools
and was active in the UFT.
Sonya is exactly the type of person that we all need on the New York City
Council: she is a fighter, unafraid to speak up when it’s most needed,
committed to her own community while she sees the big picture.
I am also encouraging you to support Sonya because her election will send a
powerful message throughout this city. If Sonya wins we hope it will
encourage other progressive activists to run in districts around town...and
to run as an independent. Sonya’s victory will send a message to the
Democratic Party that it is no longer business as usual and they can no
longer take us all for granted.
How can you help?
a) The single most important thing is to get folks to vote for Sonya Ostrom
on November 2nd. She is running in Brooklyn’s 48th District which includes
Midwood, Sheepshead Bay, Manhattan Beach and Brighton Beach. If you don’t
live in that district you might know someone who does...give them a call.
b) Sonya is participating in the campaign finance program. This means she
can turn every dollar into 4 more dollars through matching funds....but she
needs to file for her matching funds by this Friday, October 1st. Please
take a moment right now to make the most generous contribution you can. Be
sure to include all of the following information so your donation can be
used for the matching funds:
Name
Address
City, State, Zip
Phone
Occupation
Employer
Employer’s Address
Make your check for $10 (or as much as you can) out to CITIZENS FOR SONYA
and mail it to:
Citizens for Sonya
c/o Mike Dowd
267 Park Place
Brooklyn, NY 11238.
c) If you are active with an organization that supports candidates for
office, ask them to also endorse Sonya Ostrom - and to contact their
members, make a donation, support the campaign in whatever ways they can.
d) Finally, help spread the word. Feel free to send this email out to
others, or print it out and distribute it to anyone you think might be
interested.
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LANDLORD'S RIGHT TO EVICT:
May it Be Waived When Tenant is a Nonprimary Resident?
By Warren A. Estis and Jeffrey Turkel
New York Law Journal
Wednesday, September 1, 1999
IN two recent cases, Rima 106 LP v. Alvarez and Clark1 and Park Towers So.
Co. LLC v. Universal Attraction,2 the First Departments of the Appellate
Division and the Appellate Term have wrestled with the following question:
Can a landlord, in exchange for valuable consideration received from a
tenant, waive its right to evict that tenant based on nonprimary residence?
In Rima 106 a unanimous Appellate Division pointedly rejected the concept
that tenants could purchase — or that landlords could sell — nonprimary
residence immunity. In Park Towers, Justices Helen Freedman and William J.
Davis reached the same conclusion, albeit in somewhat more equivocal
language. Justice William McCooe, in dissent, held that landlords can waive
any rights they possess under the Rent Stabilization Law.
Public Policy
The very basis for rent regulation is a legislative finding of an
"intractable housing emergency" in the city and state of New York.3 By
1971, the New York State Legislature had determined that certain tenants
were exacerbating the housing shortage by using their apartments as
pied-a-terres. The result was the enactment of L. 1971, ch. 373, which
removed from the jurisdiction of rent control and rent stabilization "any
housing accommodation which is not occupied by the tenant in possession as
his primary residence.''4 As Governor Nelson A. Rockefeller stated in his
Memorandum in Support of Chapter 373:
"Thousands of controlled apartments in New York City and elsewhere are
rented by people who do not live in them. They use the apartments as a
convenience, staying in them occasionally when they come to the City. Some
even use them for storage. Continued controls on these apartments,
indirectly subsidizing them through reduced real estate taxes, and keeping
them off the market, is one of the worst iniquities of rent control.''5
Nonprimary residence litigation thereafter quickly emerged as a cottage
industry in New York City. Courts, when evicting nonprimary resident
tenants, frequently took the opportunity to cite a public policy
justification for doing so. As the First Department stated in Cier
Industries Co. v. Hessen:
"A tenant of a rent stabilized apartment who maintains a primary residence
elsewhere, and also seeks to retain the stabilized apartment for
convenience or for considerations of personal gain, is not one who is a
victim of the housing crisis, but may rather to be said to be a
contributing and exacerbating factor in the continuation of the critical
shortage of affordable apartments.''6
Abuses of the rent regulatory laws, however, are not the exclusive province
of tenants. The legislature and the governing administrative agencies
recognized that landlords, given their superior bargaining position when
initially renting an apartment to a tenant, could condition the rental upon
the tenant's waiver of his or her rights under the Rent Stabilization Law.
To address this issue, Section 2520.13 of the Rent Stabilization Code
generally provides that "[a]n agreement by the tenant to waive the benefit
of any provision of the RSL or this Code is void." The drafters of the
code, by extending this protection to tenants alone, clearly implied that
landlords were free to waive their rights. The inevitable question, given
the public policy against nonprimary residency, was whether a landlord was
free to waive its right to evict a tenant on such grounds.
Rima Case
The answer was provided in Rima 106. Rima concerned two apartment buildings
on the Upper West Side. In the mid-1980's, the former owner -- Filroben
Associates -- was trying to co-op the building, which was in dire financial
straights. In an attempt to salvage its financial position, Filroben
offered Elliot Clark, a plumber, a rent-stabilized apartment in lieu of
paying a $40,000 debt owed to Mr. Clark's company. To make the deal
attractive to Mr. Clark, the lease contained a clause which stated:
Notwithstanding anything to the contrary provided herein and
notwithstanding any provision of applicable law or administrative
regulations which otherwise might be interpreted to limit in any way the
use by Tenant of these premises on the basis of the concept of "primary
residence," Owner hereby waives any right to claim a default under this
Lease or otherwise make any claim against the Tenant by reason of the fact
that Tenant is not using the Apartment as its primary residence.
Roxanna Alvarez, who was apparently related to one of Filroben's partners,
also received a lease with an identical clause. Shortly thereafter, the
buildings went into foreclosure, and the ground leases for the buildings
were ultimately assigned to Rima 106 LP after a foreclosure auction.
After learning that Ms. Clark and Ms. Alvarez might not actually live in
their apartments, the new owner commenced actions against both tenants
based on nonprimary residence. Specifically, the owner sought a declaration
that the nonprimary residence immunity clauses were "null and void under
applicable law and unenforceable as against public policy." The tenants
claimed that the sweetheart clauses barred the landlord from evicting them
based on nonprimary residence.
The New York State Supreme Court found in the tenants' favor, holding that
the owner could not "avoid an obligation it assumed when it acquired an
interest in the building." The owner thereafter appealed to the Appellate
Division, First Department. Justice Richard W. Wallach, writing for the
full bench, refused to enforce the sweetheart clauses and remanded the
proceeding for a trial on the merits of the owner's primary-residence
claims. Justice Wallach cited various cases condemning nonprimary residence
as an injury to the general public during an acute housing shortage, and
concluded:
Facing foreclosure, plaintiff's predecessor landlord may have been
interested solely in conducting a "fire sale" of its only assets, possibly
in fraud of its mortgagee and other creditors, ignoring the fact that such
a transaction injures the public by removing affordable housing from the
market. ...Under the circumstances, any such waiver was contrary to public
policy, and must be declared a nullity" (emphasis supplied).
Park Towers Case
The same issue -- occasioned by a similar sweetheart clause -- arose in
Park Towers South Co. The Civil Court, under Justice Donna Mills, refused
to enforce the nonprimary residence immunity provision, finding that the
clause -- which had been negotiated into a stipulation relating to an
earlier nonprimary residence challenge -- was "against the sound public
policy declared in the Rent Stabilization Law to alleviate the housing
crisis."7 The tenant then appealed to the Appellate Term, First Department.
Justices Helen Freedman and William J. Davis affirmed on public policy
grounds, but did not cite the Rima 106 decision, which had been issued over
two months before. In contrast to Justice Wallach's blanket condemnation of
such clauses, the Appellate Term majority did allow that "there may be
circumstances where a landlord could permissibly waive the right to evict
upon the ground of non-primary residence." The Court did not specify,
however, the circumstances under which it would enforce such a waiver.
Notwithstanding the Appellate Term's ruling, the question arises as to
whether such waivers are ever enforceable, given Justice Wallach's language
in Rima 106. Justice McCooe, however, dissented, stating:
The public policy against the tenant waiving benefits under the Rent
Stabilization Law does not apply to a landlord. RSC §2520.13; McKinney's
Con Laws of NY, Book 1, Statutes §74. The law should not favor a party who
seeks to invalidate a lease simply to re-rent it for a higher price. The
status quo should be maintained.
What the Appellate Term majority hints at, and what Justice McCooe states
outright, is that there may be circumstances when it would be inequitable
to allow a landlord to obtain the benefits of such a sweetheart clause
without the corresponding obligation; i.e., the obligation to refrain from
evicting the tenant. The Appellate Division seemed to take a larger view,
holding that the protection of the general public would always supercede
the rights of the individual litigants.
NOTES:
(1) __ AD2d __, 690 NYS2d 40 (1st Dept. 1999). The authors' law firm,
Rosenberg & Estis PC, represented the prevailing owner in Rima 106.
(2) New York Law Journal, Aug. 3, 1999, at 23, col. 1 (A.T. 1st Dept.).
(3) Manocherian v. Lenox Hill Hosp., 84 NY2d 385, 389 (1994); see, also,
New York City Admin. Code §§26-401 and 26-501.
(4) New York City Admin. Code §§26-403(e)(2)(i)(10) and 26-504(a)(1)(f).
See, also, §5(a)(11) of the Emergency Tenant Protection Act (L. 1974, ch.
576, §4).
(5) NY Leg. Ann. 1971, at p. 562.
(6) 136 AD2d 145, 526 NYS2d 77, 81 (1st Dept. 1981).
(7) NYLJ, March 11, 1998, at 28, col. 4 (Civ. Ct., NY Co., Mills, J.).
Warren A. Estis is a founding partner at Rosenberg & Estis PC. Jeffrey
Turkel is a partner at the firm.
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