Housing Court Decisions May 97
edited by Colleen F. McGuire, Esq.
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New York Law Journal,
decisions for the week of May 26-30, 1997 (3 cases)
- Case Caption:
- Classic Properties v. Martinez
- Issues/Legal Principles:
- Prevailing party in succession rights case of a rent controlled apartment is entitled to
attorney's fees where the original lease had an attorney's fees clause.
- Keywords:
- attorney's fees; succession rights
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Margaret Taylor
- Date:
- May 27, 1997
- Citation:
- NYLJ, page 27, col 1
- Referred Statutes:
- 9 NYCRR 2204.6(d); RPL 234
- Summary:
- After trial tenant won his succession rights claim to the rent controlled apartment and the
lower court granted attorney's fees. The landlord appealed the attorney's fees award and the
Appellate Term upheld. Real Property Law 234 applies to the prevailing party in a rent
controlled succession rights case if the original tenant had a lease with an attorney's fee
provision. The Court rejected the landlord's argument regarding lack of mutuality, holding that
if the landlord believed this way, it should have joined the estate of the deceased tenant as a
party to the proceeding, and if the landlord had been successful, it could have obtained an
attorney's fees award against the estate.
- Case Caption:
- London Terrace Gardens v. Rentschler
- Issues/Legal Principles:
- Termination notice whose boilerplate authorization incorrectly listed the owner as a
corporation instead of a partnership is not a fatal defect.
- Keywords:
- termination notice
- Court:
- Civil Court, New York County
- Judge:
- Hon. Douglas Hoffman
- Date:
- May 28, 1997
- Citation:
- NYLJ, page 27, col. 2
- Referred Statutes:
- CPLR 3211(a)(7); RSC 2524.3(b)(c) & (h), 2524.2, 2520.6(i); General Obligations Law
15-301(5)
- Summary:
- Tenant moved to dismiss the holdover petition on grounds of a defective termination
notice. The notice was signed by Andrew Hoffman as authorized agent. The annexed
authorization is signed by Onda D'Urso as partner on behalf of London Terrace Gardens, a
partnership. The notarization of D'Urso's signature, however, describes London Terrace as a
corporation. The tenant argued that this inconsistency renders the notice defective. The
landlord countered that tenant's motion is in the nature of a motion to dismiss for failure to state
a cause of action, and as such, the court is required to look at whether the complaint does in fact
fail to state a cause of action. The court held that the authorization was proper, that the usage
of the word corporation was simply in the boilerplate form, and tenant never argued that the
person issuing the authorization or designated as an agent had not been a person with whom
respondent had dealt.
- Case Caption:
- Bedford Gardens Co. v. Sander
- Issues/Legal Principles:
- Parties who stipulated in court that HUD would resolve tenant's rental amount are bound
by HUD's decision.
- Keywords:
- stipulations
- Court:
- Civil Housing Court, Kings County
- Judge:
- Hon. Peter Wendt
- Date:
- May 28, 1997
- Citation:
- NYLJ, page 28, col. 5
- Referred Statutes:
- none cited
- Summary:
- The apartment is a Mitchell-Lama project subject to the Private Housing Finance Law
regulated by the City's HPD. The landlord brought a nonpayment proceeding against the tenant
claiming that the tenant owed monthly rent at the market rate of $1,226.77 per month because
the tenant's income exceeded the amount sufficient to qualify him for a rent subsidy. The tenant
claims he is qualified and should only pay $1,045.77 per month. In a stipulation of settlement,
the attorneys agreed to write HUD "to seek a resolution of the matter" by asking for a
clarification on whether the tenant owed the $291 difference in rent . HUD decided in favor of
the landlord on the basis of the tenant's income and that the tenant should pay the full market
rent. Twice more tenant's attorney sought a decision from HUD and twice more HUD held the
same opinion. The landlord then moved for summary judgment based on HUD's decision and
the tenant argued that HUD incorrectly interpreted its own guidelines with respect to calculating
a tenant's income. The court held that once the parties stipulated for HUD to resolve the issue,
the tenant cannot now ask the court to disregard HUD's decision, particularly since the tenant
provided no affidavits or legal arguments why the HUD decision was incorrect. The court
granted the landlord's motion holding that tenant must pay a market rent.
New York Law Journal, decisions for the week of May 19-23, 1997 (5 cases)
- Case Caption:
- Brusco v. DHCR
- Issues/Legal Principles:
- DHCR erred in denying landlord due process rights to cure violations prior to DHCR's
issuance of rent reduction orders.
- Keywords:
- rent reduction orders
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon. Marilyn Diamond
- Date:
- May 19, 1997
- Citation:
- NYLJ, page 25, col 4
- Referred Statutes:
- none cited
- Summary:
- Tenants filed a DHCR complaint alleging problems with the boiler, elevators, hallways
and waste areas. At the time of filing the complaint in 1991 the DHCR's practice was to notify
landlords of the complaint and give them an opportunity to cure the allegations, if any were
found during an inspection, before DHCR would issue a rent reduction order. The landlords
notified DHCR that the violations were corrected and requested notice of any violations
discovered by a DHCR inspection. Three years later the DHCR conducted an inspection and
reported various violations related to the tenants' 1991 complaints. However, DHCR did not
provide the landlords an opportunity to cure the violations as it used to do following an
inspection. Instead the DHCR issued rent reductions orders retroactive to the 1991 rents for
stabilized apartments and reduced by $5.00 per month the rents of rent controlled tenants.
Landlord appealed DHCR's denial of the agency's failure to provide the landlord an opportunity
to cure before it rendered the rent reduction orders. The Appellate Division reversed, finding
that DHCR failed to explain its departure from its longstanding policy, and only did so at an
Owners' Advisory Counsel 13 days after the DHCR issued its denial. Although there was no
law mandating that the DHCR provide owners the opportunity to cure, the Appellate Division
noted that such practice was unambiguously recognized "as a norm of procedural due process"
during the period the case was pending. The Court found the DHCR's decision arbitrary and
capricious as a denial due process rights and reversed the lower court's and the DHCR's rent
reduction orders to enable the landlords an opportunity to cure the violations found by the
DHCR in its inspection of the building.
- Case Caption:
- Moorehead v. Mastrangelo
- Issues/Legal Principles:
- Landlord not entitled to keep security deposit based on alleged damages to apartment
because landlord did not deposit the security monies in a separate account.
- Keywords:
- security deposit
- Court:
- City Court, Westchester County
- Judge:
- Hon. Washington
- Date:
- May 21, 1997
- Citation:
- NYLJ, page 32, col. 2
- Referred Statutes:
- General Obligations Law 7-103 & 105
- Summary:
- Tenants sued the landlord of a cooperative apartment because the landlord did not refund
their security deposit of $3,000.00. Initially the tenants sued for only $1,500 because they
applied the other $1,500 to the last month's rent. In small claims court they amended their
complaint to seek the full $3,000 on the grounds that the landlord did not keep the security
deposit in a separate account as required by law which prohibits landlords from commingling
security deposit monies with personal monies. The court ruled that under contract law a
violation of the commingling statute would allow the tenants the full return of the deposit.
However, since the tenants already applied $1,500 towards rent, which the landlord was entitled
to, the court ruled that the $1,500 left as security must be returned to the tenants. The court also
rejected the landlord's claim that it was entitled to keep even the $1500 security deposit because
of alleged damages by the tenants. The court ruled that not only did the landlord have
insufficient proof on this issue, but commingling of funds meant the landlord would forfeit the
security deposit regardless of whether the apartment had been left damaged by the tenants.
- Notes:
- Had the tenants not directed that the landlord could use one-half of the security deposit
for the last month's rent, it seems that this court would have directed the full amount of the
initial deposit be returned to the tenants and the landlord would have been out-of-pocket for the
last month's rent.
- Case Caption:
- Sanford Flushing Assoc. v. James
- Issues/Legal Principles:
- Single instance of objectionable conduct is insufficient grounds to evict tenant on a
nuisance theory.
- Keywords:
- nuisance
- Court:
- Appellate Term, 2nd & 11th Judicial Districts
- Judge:
- lower court: Hon. Harriet George
- Date:
- May 21, 1997
- Citation:
- NYLJ, page 29, col. 6
- Referred Statutes:
- none cited
- Summary:
- The lower court granted the landlord a judgment of possession for a nuisance holdover
against the tenant. Apparently, the tenant went one day to the landlord's office for a breakdown
of her arrears. According to the tenant, she was made to wait unnecessarily and was treated
with disrespect. As a result she became upset, shouted at and threatened landlord's employees
and hurled a cup of coffee in their direction which splattered all over the office's glass partition.
Her actions prompted the landlord to bring a nuisance holdover against her. (It was probably
the attorneys themselves who sought the holdover!) The Appellate Term reversed, holding that
a single instance of objectionable conduct by the tenant, especially since she lived in the building
since 1972, was insufficient to make out of a case of nuisance.
- Case Caption:
- Stanford Realty Assoc. v. DeSouza
- Issues/Legal Principles:
- Ex-husband's surrender of apartment does not automatically give ex-wife succession
rights unless she can prove the apartment was her primary residence for two years prior to
husband's surrender.
- Keywords:
- succession rights
- Court:
- Civil Court, New York County
- Judge:
- Hon. Donna Mills
- Date:
- May 21, 1997
- Citation:
- NYLJ, page 28, col 1
- Referred Statutes:
- CPLR 3212, 408, 3103; RPL 226-b & 235-f; RPAPL 713(7); RSC 2523.5
- Summary:
- Respondent DeSouza was married to the rent stabilized tenant of record who has since
surrendered the apartment. She was married to him from December 29, 987 to June 23, 1995.
The landlord brought a licensee holdover against her claiming that she never occupied the
apartment contemporaneously with the tenant, her ex-husband, and therefore was not entitled to
succession rights and a renewal lease in her own name. In a prior holdover proceeding based
on alleged unlawful subletting, the lower court dismissed the case, but the Appellate Term
reversed, holding that a lease that permits occupancy by the tenant and immediate family
members contemplates concurrent occupancy and does not authorize transfer of possession to
a family member by a departing tenant as a matter of law. In short, the Appellate Term held
that DeSouza had to prove succession rights in the unlawful sublet case. The landlord moved
for summary judgment in the licensee holdover, attaching various documents and affidavits to
show that DeSouza did not reside in the premises for two years with her spouse prior to his
surrender. The documents included her application to another apartment owned by the landlord
where she listed an address other than the subject premises. The landlord also obtained an
affidavit from her ex-husband stating that she did not reside in the apartment with him for the
requisite two years, and an affidavit from the super to the same affect. DeSouza stated that she
is an international model and her work took her elsewhere often and that the marital problems
also prevented her from continuous occupancy of the apartment, but she asserted it was her sole
and only primary residency. As a result of the dispute in facts, the court held that a trial must
determine whether she has succession rights, and denied the landlord's motion for summary
judgment to recover the apartment. (To win a summary judgment motion, the moving party
must show that there are no facts in dispute). The court granted DeSouza's motion to
consolidate the two holdovers, holding that despite their different theories the two cases involved
common questions of law and fact. However, the Court denied DeSouza's motion for discovery.
She wanted to ask the landlord questions about the circumstances of her ex-husband's surrender
of the apartment, but she admitted in her papers that he had indeed vacated and she failed to
show how additional facts obtained in discovery would add to her defense.
- Case Caption:
- Aston-Jones Management v. Campbell
- Issues/Legal Principles:
- Tenant's rent reverted back to last DHCR registered rent, not rent in effect when HPD
owned the building.
- Keywords:
- overcharges; stipulations; rent registration
- Court:
- Civil Court, Kings County
- Judge:
- Hon. Peter Wendt
- Date:
- May 21, 1997
- Citation:
- NYLJ, page 30, col 3
- Referred Statutes:
- RSL 26-517(e)
- Summary:
- Tenant defaulted in this nonpayment proceeding on various stipulations. The court
refused to sign a fifth order to show cause. The tenant then obtained the services of legal aid
who argued that the stipulation must be vacated because of overcharges, failure to register the
rents, and miscomputation of rents by the landlord. The landlord's attorneys argued that when
HPD (the City) owned the building there was no requirement to register the rent because it was
exempt from Rent Stabilization during their period of ownership. The tenant argued that when
this landlord acquired the building in 1994 it was required to register the apartments with DHCR
within one year of the purchase. The failure to timely register precludes the landlord from
collecting any rents in excess of the last legal registered rent which was $220 a month. The
landlord argued that the rent should stay at the amount set by HPD which was $302.77. To
complicate matters further, DHCR had issued a rent reduction order which set the rent at the
last guidelines rent order until repairs are made. The landlord argued that because the $302.77
was not the result of an increase in rent, there was no prior guideline adjustment to go back to,
another reason why the rent should remain at $302.77. The court first ruled that where "just
cause" exists, such as here, the stipulation may be vacated in the court's discretion. For one,
the landlord did not dispute its miscomputation of the rent, and the court ruled that these
mistakes alone are sufficient to vacate the stipulation. Also, at the time the tenant entered into
the stipulations pro se, the court was never made aware of the DHCR rent reduction order or
the fact that the premises were never registered. Because tenants cannot waive Rent Stabilization
rights, these are further grounds for setting aside the stipulation. On the merits the court ruled
that even though HPD was exempt from registering rents, this landlord was not, and the law
provides that until the landlord does register the rent, the rent reverts back to the last legal
registered rent with DHCR which was $220. The court also rejected the landlord's argument
that the DHCR rent reduction order meant that the rent should be at the HPD rate. The court
ruled that the rent reduction order required the rent to go back to the last DHCR rent (not the
last HPD rent), which again would be the $220. While the court vacated the stipulation, it did
not dismiss the petition because a trial was needed to determine the amount of the overcharges.
New York Law Journal, decisions for the week of May 12-16, 1997 (6 cases)
- Case Caption:
- Nunez v. Giuliani
- Issues/Legal Principles:
- Senior citizens tenants' eligibility date for SCRIE benefits begins on date of application
for SCRIE funds, not date tenants' eligibility might have begun.
- Keywords:
- SCRIE
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon. Louis York
- Date:
- May 12, 1997
- Citation:
- NYLJ, page 26, col 1
- Referred Statutes:
- Real Property tax Law 467-b; Administrative Code 26-509
- Summary:
- In this class action, the recipients of SCRIE benefits challenged the City's method for
calculation senior citizen rent increase exemptions (SCRIE). At issue was the meaning of the
law's phrase "eligibility date." For 20 years the Department for the Aging has interpreted the
phrase to mean the application date in which the benefits are applied for. The plaintiffs argued
that the phrase refers to the earliest date that an applicant met the qualifying criteria of age,
income and rent, so that a tenant who qualified for the exemption may require the landlord to
roll back the applicant's date to a date preceding the application, perhaps by many years. The
lower court adopted plaintiffs' interpretation of the statute and ruled that the Department must
alter their calculation method for awarding exemptions to include benefits available prior to the
tenant's application date for SCRIE funds. The Appellate Division reversed, holding that the
language of the law itself conflicts with plaintiffs' interpretation, such as, the law's language that
income eligibility for the exemption must be measured for the year immediately preceding the
application date.
- Case Caption:
- Pandora Enterprises, Inc. v. DHCR
- Issues/Legal Principles:
- Landlord improperly increased the rent by including costs for repairs that did not qualify
under the Code, and such increases were wilful.
- Keywords:
- overcharges; treble damages
- Court:
- Appellate Division, Second Department
- Judge:
- lower court: Hon. Goldstein
- Date:
- May 13, 1997
- Citation:
- NYLJ, page 30, col. 1
- Referred Statutes:
- RSC 2522.4(a), 2526.1(a)(1)
- Summary:
- The landlord appealed the DHCR's decision that the landlord had wilfully overcharged
the tenant. The Appellate Division upheld the decision finding that the landlord had imposed
a rent increase which improperly included the costs for repairs and other work which did not
qualify under the Code.
- Case Caption:
- Ferrante v. 55 Spring Street Associates
- Issues/Legal Principles:
- Overcharge claims may include unlawful payment of broker's fee.
- Keywords:
- overcharges; broker's fees
- Court:
- Civil Court, New York County
- Judge:
- Hon. Debra James
- Date:
- May 14, 1997
- Citation:
- NYLJ, page 29, col. 4
- Referred Statutes:
- RSC 2521.2(a), 2526.1(a)(1)
- Summary:
- Tenant commenced an action in Civil Court for a judgment based on rental overcharges.
The tenant produced a copy of a DHCR order pertinent to the prior tenant which found that the
prior owner had initially registered the rent at an excessive rental. The new owner charged the
tenant a rental based on the unlawful amount. The owner argued that over four years had
elapsed from the date the prior owner charged the wrongful rent and therefore the tenant's claim
could not be heard (since there is a four-year limitation on collecting overcharges). The judge
disagreed, stating that the four-year period begins running from the date of the DHCR
determination which was 1995. The tenant also claimed that he had paid the owner or its
employee an illegal broker's fee or finder's fee of $4,276.70 for the apartment. The owner
argued that this could not be subject to an overcharge claim, but the judge ruled that the law
defines rent, for the purpose of an overcharge claim, to include payments of a fee or rental
commissions. The court set the matter down for a hearing on whether the owner's actions were
willful.
- Case Caption:
- 430 Realty Co. v. Baird
- Issues/Legal Principles:
- Two tenants on lease not entitled to have a roommate if both tenants reside in the
apartment.
- Keywords:
- roommates
- Court:
- Civil Court, New York County
- Judge:
- Hon. Donna Mills
- Date:
- May 14, 1997
- Citation:
- NYLJ, page 29, col 5
- Referred Statutes:
- RPL 235-f;
- Summary:
- The tenants, husband and wife, lease a room in their apartment to a subtenant for $800
per month. The landlord brought a holdover claiming that the tenants violated the roommate
law. Where there are two tenants on a lease, the law permits occupancy by the tenants (and
their immediate family members) and occupants so long as the total number of tenants (exclusive
of family members) does not exceed the number of tenants on the lease. The court interpreted
the law with respect to multiple lease holding tenants as permitting an additional occupant (i.e.,
roommate) only where one of the named tenants was not in occupancy. In other words, the
roommate would act as a replacement of the absent tenant. The court granted summary
judgment to the landlord, but gave the tenants ten days to cure the violation, which means the
roommate must leave in 10 days.
- Case Caption:
- 4 East 28th St. Corp. v. Tandjigora
- Issues/Legal Principles:
- To justify 1/40th increase of rent for improvements, landlord must prove improvements
are not maintenance, decoration or repairs, and must prove the cost of each item.
- Keywords:
- overcharges; improvements
- Court:
- Civil Court, New York County
- Judge:
- Hon. Richard Braun
- Date:
- May 14, 1997
- Citation:
- NYLJ, page 29, col 6
- Referred Statutes:
- RSC 2520.6(j), 2520.11(g), 2522.4(a)(1) & (4), 2528.4; RSL 26-517(e)
- Summary:
- In a nonpayment proceeding involving a hotel tenant who is stabilized, the tenant alleged
that the landlord overcharged him based on claimed improvements. The court found that
landlord's increase of the rent by 1/40th was not proven. The court ruled that it was landlord's
burden of proof to justify the increase by submission of documents which demonstrate that each
item was an improvement, not maintenance, decoration or repairs and proof of the cost of each
item. The court directed a trial on the amount of the overcharges.
- Case Caption:
- Eastlite Corp. v. Barth
- Issues/Legal Principles:
- Nonprimary residency holdover cannot be stayed pending Loft Board's decision on
landlord's compliance with Loft Law timetable.
- Keywords:
- lofts; nonprimary residency; disclosure
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Margaret Taylor
- Date:
- May 16, 1997
- Citation:
- NYLJ, page 25, col 2
- Referred Statutes:
- MDL 286(2)(i)
- Summary:
- Civil Court granted tenant's motion to stay a nonprimary residency holdover proceeding
pending resolution of issues pending before the loft board. The Appellate Term reversed,
holding that a stay was not warranted since nonprimary residency cases involving lofts may be
litigated in Civil Court. Although noncompliance with the Loft Law's legalization timetable may
affect the amount of rent the tenant must pay, this issue pending before the Loft Board did not
warrant staying the entire holdover case. The Appellate Term also granted landlord's application
for discovery on the tenant.
New York Law Journal, decisions for the week of May 5-9, 1997 (8 cases)
- Case Caption:
- Community Housing Improvement Program v. DHCR
- Issues/Legal Principles:
- DHCR's method of calculating rent increases is deemed improper.
- Keywords:
- MBR rent increases
- Court:
- Appellate Division, Third Department
- Judge:
- lower court: Hon. Cobb
- Date:
- May 7, 1997
- Citation:
- NYLJ, page 25, col 3
- Referred Statutes:
- Administrative Code 26-401 (a) & 26-405(a) (3), (4) & (5); RPTL Article 12 & 12-A
& 1802; 9 NYCRR 2201.4(d), 2202.8(a)(4)
- Summary:
- In 1970, the City enacted Local Law #30 which allowed landlords of rent controlled units
to receive rent increases based on a maximum base rent system (MBR) established for each
apartment every two years. The MBRs are based on a mathematical formula whose factors
include the capital value of the property. The MBRs were designed to allow landlords an 8.5%
return on capital investment based on the assessed value of the buildings for real estate tax
purposes after equalization. Regardless of the formula used, in no event can landlords recover
more than 7.5% on MBR rent increases. The petitioners in this lawsuit were owners of rent
controlled units in New York City and industry trade organizations representing property owners
throughout New York City. The petitioners argued that in calculating the MBRs DHCR has
improperly relied on RPTL Article 12 as opposed to Article 12-A. If Article 12 were used the
assessed valuation would be based on all property in the City. Instead DHCR has used Article
12-A based on multi-unit residential property which DHCR claims more accurately measures the
value of apartment buildings. The landlords argued that DHCR's calculations result in a formula
designed to keep rents artificially low. The DHCR argued that if Article 12 were used it would
create an absurd result, increasing the MBR for 1996-97 by 32.5% instead of the normal 3%
which would lead to evictions of elderly tenants. The Appellate Division held that usage of
Article 12 was mandated by the statute's language; however, Article 12 could not override
statutory caps on all increases of 7.5%. The Court also noted that senior citizens are protected
by SCRIE benefits. The Court further noted that the legislative history of the rent controlled
laws revealed that the MBR was set up not only to protect tenants against oppressive rents, but
also to allow landlords to collect sufficient rent "to encourage and promote the improvement and
rehabilitation" of rent controlled units.
- Notes:
- In 1996 and 1997 the DHCR limited landlords to 3% for MBR rent increases on rent
controlled apartments. The Appellate Division, Third Department's decision would allow a
different formula whereby landlords would be entitled to a rent increase of 32.5%. Actual rent
increases are capped by 7.5% which means that all rent controlled landlords would get to receive
the maximum increase available (i.e., 7.5%). Following the decision, a DHCR spokesperson
said that roughly half of rent controlled tenants are already paying the maximum 7.5% increase
each year anyway. It is not stated why the landlords' attorneys, the New York City law firm
of Borah, Goldstein, Altschuler & Schwartz, chose to litigate this matter in the Third
Department. Presumably they chose the Third Department (located upstate) because the First
Department (located in New York County) might very well have ruled against their client's
interpretation of the law. This is known as forum shopping for the most favorable court. The
Third Department's statement that the rent controlled laws also protect landlords is specious,
since it is highly doubtful that by receiving the maximum MBR of 7.5% as opposed to 3% in
rent increases that these landlords would rush to "improve and rehabilitate" the rent controlled
units they own.
- Case Caption:
- AC Investments v. Males
- Issues/Legal Principles:
- Tenant's 55-year dentistry practice in apartment requires trial to determine if premises
are substantially used for commercial purposes.
- Keywords:
- illegal business usage; waiver
- Court:
- Civil Court, New York County
- Judge:
- Hon. Donna Mills
- Date:
- May 7, 1997
- Citation:
- NYLJ, page 30, col. 6
- Referred Statutes:
- RPL 231(2); Rent and Evictions Regulations 2204(a)(3); CPLR 3211(b) & 1001
- Summary:
- The tenant is an 87 year old rent controlled tenant who has lived in the 6-room apartment
for 55 years and practiced dentistry there throughout his tenancy. The landlord brought a
holdover against him on grounds of illegal commercial usage. The tenant moved to dismiss the
petition based on the fact that prior landlords consented to his dentistry practice and one of the
landlords was even his patient and had allowed him to put up signs advertising his dentistry.
The tenant also argued that the landlord had accepted his rent all these years knowing of his
dentistry practice and therefore waived the alleged violation of the certificate of occupancy which
does not zone the apartment for commercial usage. The court rejected the argument that the
landlord had voluntarily waived a right to evict on this ground because the last lease contained
a no waiver clause which the court held to be enforceable. However, the court ruled that there
was a question of fact requiring a trial as to whether the premises were being used for
commercial purposes "in a substantially commercial sense."
- Case Caption:
- Sharp v. Norwood
- Issues/Legal Principles:
- Landlord's chronic non-payment holdover based on nuisance dismissed where no evidence
exists that tenant interfered with the use or enjoyment of the property
- Keywords:
- chronic non-payment; nuisance
- Court:
- Court of Appeals
- Judge:
- lower court: Arthur Scott (Civil Court)
- Date:
- May 9, 1997
- Citation:
- NYLJ, page 28, col. 3
- Referred Statutes:
- RPAPL 711(1); 9 NYCRR 2204.2(a)(2); CPLR 5601(b)(2)(i)
- Summary:
- Landlord was the co-operative owner of the shares to the rent controlled tenant's
apartment. The landlord brought a holdover proceeding on grounds that the tenant's chronic
tardiness in paying the rent constituted a nuisance. The Civil Court dismissed the petition on
grounds that the landlord failed to state a claim for nuisance. The Appellate Term reversed,
holding that chronic late payment and nonpayment of rent may constitute a nuisance "if not
adequately explained by the tenant." The Appellate Term sent it back to Civil Court for trial
and after trial the Civil Court dismissed the petition again on grounds that the landlord did not
prove that the tenant's conduct rose to the level of nuisance behavior. The Appellate Term
affirmed (with one dissent). The Appellate Division also affirmed the Civil Court order (with
two justices dissenting). The Court of Appeals affirmed with an important clarification of the
issue. It held that repeated nonpayment proceedings might constitute a substantial violation of
the tenancy, but they did not in and of themselves constitute a nuisance. Since the landlord
could not establish that the tenant's conduct substantially interfered with the use or enjoyment
of landlord's property (the standard for proving nuisance), the Court of Appeals ruled that the
holdover petition was properly dismissed. The Court, however, noted that it was not asked to
render a ruling on whether chronic late payment or nonpayment of rent, when combined with
"aggravating circumstances," could ever support an eviction based on nuisance within the
meaning of the rent controlled laws, and thus it did not address that distinct issue.
- Case Caption:
- GSL Enterprises v. Lopez
- Issues/Legal Principles:
- Respondent denied succession rights for failing to show financial and emotion
interdependence as a nontraditional family member with the tenant of record.
- Keywords:
- succession rights
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon. Arlene Hahn
- Date:
- May 5, 1997
- Citation:
- NYLJ, page 27, col 4
- Referred Statutes:
- 9 NYCRR 2204.6(d)(2) & (3)
- Summary:
- The respondent failed to prove the emotional and financial commitment and
interdependence between himself and the tenant of record so as to establish succession rights to
the rent controlled apartment as a nontraditional family member. The respondent merely
testified that he and the deceased tenant shared expenses, held some credit cards jointly and
vacationed together on some five occasions over their 11-year relationship and that he helped
care for the tenant during his illness. The Appellate Term upheld the lower court ruling, noting
that there was no testimony from friends, neighbors or family members to corroborate that the
respondent had a family-type relationship with the tenant, as opposed to being a close friend or
roommate. The Appellate Division likewise upheld the ruling, noting that there was no
documentation in the record in the respondent's behalf. In fact, the tenant named his sister in
his will and gave her a power of attorney.
- Case Caption:
- S E & K Corp. v. DHCR
- Issues/Legal Principles:
- Landlord's alleged inexperience or claim of unavailable records from prior owner fails
to rebut tenant's claim of willful overcharge.
- Keywords:
- overcharges; willfulness
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon. Ira Gammerman
- Date:
- May 5, 1997
- Citation:
- NYLJ, page 27, col 5
- Referred Statutes:
- 9 NYCRR 2526.1(a)(1)
- Summary:
- The Supreme Court dismissed the landlord's Article 78 petition appealing the DHCR's
determination that the landlord failed to show by a preponderance of evidence that the
overcharges were not willful. The Appellate Division rejected landlord's argument that its
inexperience caused it to be misled by the advice of the prior owner that a fair market rent could
be charged for the apartment upon vacatur by the prior tenant. The court noted that even had
the landlord been entitled to charge a fair market rent, the rent it did initially charge still was
an overcharge of the fair market rent. Nor did the Appellate Term accept the landlord's
allegation that the full rental history was allegedly unavailable at the time the landlord took title
to the building.
- Case Caption:
- City of New York v. Scott
- Issues/Legal Principles:
- Respondent entitled to litigate succession rights defense in holdover where the City of
New York landlord failed to provide him due process at the agency hearings.
- Keywords:
- HPD succession rights
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon. Carl Callender
- Date:
- May 5, 1997
- Citation:
- NYLJ, page 27, col 1
- Referred Statutes:
- CPLR 1018
- Summary:
- The City sought to evict the respondent from an apartment he lived in with his mother,
the tenant of record, from 1985. She died in 1991. The City denied the respondent's application
to succeed to the apartment on grounds that he had engaged in "unacceptable activity" of drug
trafficking in the vicinity of the premises. The decision, however provided no details of the
allegations. The respondent lost his administrative appeal, but the City did not advise him that
he could appeal the decision in an Article 78 to the Supreme Court. Thereafter the City brought
a licensee holdover proceeding against him. The Civil Court and the Appellate Term held that
the respondent received no meaningful opportunity at the agency level to confront the evidence
of his alleged drug trafficking, no notice by HPD as to how it came to this determination, and
no advice in informing him that he could appeal. Absent such due process the Appellate
Division held that he could litigate his succession rights claim in the Civil Court holdover
proceeding. The Court also noted that the respondent made a prima facie showing of entitlement
to the apartment under the City's Successor Tenant's policy.
- Case Caption:
- Ammon v. DHCR
- Issues/Legal Principles:
- Tenant's right to challenge rent stabilization rental allowed despite prior waiving of
potential rent controlled rights.
- Keywords:
- waiver of Rent Stabilization rights; succession rights; res judicata
- Court:
- Supreme Court, New York County
- Judge:
- Hon. Franklin Weissberg
- Date:
- May 9, 1997
- Citation:
- NYLJ, page 29, col 4
- Referred Statutes:
- 9 NYCRR 2520.13
- Summary:
- The petitioner-tenant lived in the rent controlled unit with the now deceased tenant of
record who died in 1988. In a 1988 holdover proceeding brought by her landlord she argued
that she possessed succession rights as a common law spouse. The parties negotiated a
settlement wherein the landlord named her the tenant of record, but the apartment was converted
from a rent controlled unit to a rent stabilized unit and her monthly rent increased from $696.51
to $1,000. In 1989, the Court of Appeals held that remaining family members were entitled to
succession rights. See Braschi v. Stahl Associates, 74 N.Y.2d 201 (1989). Based
on the Braschi decision, the tenant started paying the lower rent. The landlord brought a
nonpayment proceeding and Judge Wendt held that the Rent Stabilized lease was enforceable
because the holdover settlement was a fair and reasonable compromise entered into without
duress. (It is doubtful the tenant would have settled had she litigated her case after the Braschi
decision came down.) In 1992, the tenant filed a Fair Market Rent Appeal with the DHCR
claiming that the initial rent of her apartment exceeded the permissible stabilization rent. The
landlord responded that the complaint must be dismissed because the judge already ruled that
the lease was enforceable and she must be bound by Judge Wendt's decision. The DHCR ruled
that the landlord was only entitled to a 25% rental increase and the tenant's rent was set at
$899.34. On a PAR appeal, the DHCR decided that the tenant had knowingly waived her right
to have her initial rent calculated pursuant to the stabilization guidelines because she had settled
her case and that by the doctrines of res judicata and collateral estoppel she must be bound by
Judge Wendt's decision. The tenant appealed by way of an Article 78 to the Supreme Court.
The Court found that to hold the tenant to Judge Wendt's decision it must be shown that her
DHCR complaint sought the same relief as sought during the nonpayment proceeding. The
DHCR complaint objected to the initial stabilized rent of the apartment. The Court noted that
there was no indication that this issue was put before Judge Wendt. Although she objected to
the amount of her rent and questioned the validity of the holdover settlement (which converted
her apartment from controlled to stabilization), her objections before Judge Wendt were with
reference only to her Braschi rights, and were not a challenge of the rent stabilization rent. In
essence, the Court found that Judge Wendt merely determined whether she had waived her right
to litigate succession rights, not whether she could challenge the stabilization rent. The Court
ruled that she could not waive her right to challenge the initial stabilized rent where she never
made such a challenge prior thereto.
- Case Caption:
- Gutman v. August
- Issues/Legal Principles:
- Keywords:
- overcharges; statute of limitations
- Court:
- Civil Court, Kings County
- Judge:
- Hon. Baynes
- Date:
- May 7, 1997
- Citation:
- NYLJ, page 32, col. 6
- Referred Statutes:
- RSC 26-517, 26-5116, 2520.3; RSL 26-516(a)(1) & (g) & 517(e); 9 NYCRR
2526.1(a)(3)
- Summary:
- In a nonpayment proceeding, both parties agreed that the landlord had overcharged the
tenant. She leased the apartment in 1984 at a rent of $250, although the prior tenant's rent was
only $135. By 1994, the tenant was paying $315 per month. The landlord failed to file annual
registration statements with the DHCR during her tenancy. The landlord argued that it had now
registered the apartment and a "statute of limitations" precluded the tenant from calculating or
collecting rents beyond a four-year period from the landlord's most recent registration. The
tenant argued that the landlord's most recent annual registration was based upon unlawful rent
increases and thereby it cannot be deemed to have been "duly registered" pursuant to RSL 26-
516 & RSL 26-517, the latter of which holds that where an apartment is "duly registered" a
landlord is not obligated to retain or produce records beyond four years. The tenant argued that
RSL 517 is not applicable to this landlord since it failed to file duly or "proper" registrations
and the rent recently registered was based on unlawful increases going back to the initial
unlawful rent in 1984. The court noted that 26-516 in fact refers to three different four-year
periods. 26-516(a)(i) and 26-516(g) refer to a four-year period prior to the most recent
registration statement. 26-516(a)(2) refers to both a four-year period from the first alleged
overcharge and a four-year period preceding the time the overcharge complaint was filed. The
3 four-year periods do not necessarily coincide. As a further confusion, 26-517(e) bars all
overcharge claims without reference to any four-year period where a late registration containing
no unlawful rent increases has been filed. This must be distinguished by situations where the
most recent annual registration statement contains unlawful increases. In the first instance, the
law bars overcharge claims without respect to any four year period, even if the registration
statement is filed late. In the latter instance, there is a window spanning from four years prior
to the date of the overcharge complaint and continuing through the date of the owner's most
recent filing. In this case the tenant filed her overcharge complaint on October 29, 1996 as a
counterclaim to the nonpayment proceeding. The landlord's most recent registration statement
was filed in June of 1996. The applicable four-year period would be four years prior to October
29, 1996 through June, 1996 (a period of three years and 9 months). The Court ruled that the
tenant could calculate the overcharges (as opposed to collecting overcharges) as far back as
necessary even relying on her own or DHCR's records if the landlord did not keep its own
records beyond four years. The court stated it would be prudent for a landlord to keep records
beyond four years and that the statute does not bar a tenant from producing any records. The
court rejected the tenant's argument that the landlord's failure to file annual statements
constituted willfulness in and of itself as a matter of law. The court held that this act alone did
not constitute willfulness or fraud per se so as to impose treble damages. The court set the
matter down for a trial (a) to calculate tenant's legal rent, (b) to determine her overcharge
damages from four years prior to October 29, 1996 through June, 1996, and (c) for a
determination as to whether or not the overcharge was wilful.
- Notes:
- The issue raised in this case is one of the most difficult ones to understand in Housing
Law, primarily because the laws are so tediously convoluted. This judge made an admirable
effort to make sense out of the conflicting laws and the opinion is worth reading. The judge
came to the same conclusion as another case currently pending on appeal at the Appellate
Division, Hart-Zafra v. Pilkes, NYLJ, April 12, 1996, 25:3 (Appellate Term, First
Department). The Appellate Term upheld the principle that a tenant may go beyond four years
to calculate the lawful rent, but is, of course, limited to a four-year period from the time the
complaint is filed in the collection of any overcharges. The Appellate Division's determination
of this issue is expected soon since it was submitted for appeal last year.
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