Housing Court Decisions April 1999

edited by Colleen F. McGuire, Esq. and Linda Rzesniowiecki, Esq.

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New York Law Journal,
decisions for the week of April 26-30, 1999 (5 cases)

Case Caption:
Arias v. Vasquez
Issues/Legal Principles:
Criteria relevant to a succession rights claim in a nontraditional family relationship are not relevant to an owner occupancy proceeding.
Keywords:
owner occupancy
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Pierre Turner
Date:
April 26, 1999
Citation:
NYLJ, page 28, col 3
Referred Statutes:
RSC 2524.4(a)(2) & 2523.5(b)(1) & 2520.6(o)
Summary:
The landlord brought an owner occupancy proceeding and the lower court dismissed the petition on grounds that the senior citizen was not offered "an equivalent or superior housing accommodation at the same or lower regulated rent in a closely proximate area." Such alternative housing is required to be offered to senior citizens or disabled people in rent stabilized units when the owner wants that unit for their personal use. In this case, the senior citizen was not a tenant or the spouse of a tenant, but rather an unrelated member of tenant's extended family. The criteria employed for determining non-traditional family relationships applicable in succession rights cases are not applicable in owner occupancy proceedings.

Case Caption:
Spense v. Vanderberg
Issues/Legal Principles:
Court denies landlord rent due to absence of certificate of occupancy in basement apartment, but grants landlord a possessory judgment anyway.
Keywords:
certificate of occupancy; judgment of possession
Court:
City Court of Mount Vernon, Westchester County
Judge:
Hon. Seiden
Date:
April 28, 1999
Citation:
NYLJ, page 31, col 1
Referred Statutes:
Multiple Dwelling Law 301 & 302
Summary:
Landlord brought a nonpayment proceeding for rental arrears for three months. The tenant resides in the basement at a weekly rent of $68.00. The owner of the building died in the midst of the proceeding and the current owner was permitted to amend the petition to correctly reflect her status as executrix of the landlord's estate. The certificate of occupancy is for a one-family home and does not cover the basement as residential space. The tenant argued that Multiple Dwelling Law 301 & 302 provides that in the absence of a certificate of occupancy a landlord cannot recover any rent. The court, however, pointed out that "the sanctions available under the MDL section are to be used by a tenant as a shield to protect against unsafe living conditions and not as a sword providing the tenant with unjust enrichment." In other words, even though the statute specifically states that if no certificate of occupancy exists, the landlord is not entitled to collect rent, courts have consistently ruled that this is applicable only if there exist conditions detrimental to the health and safety of the tenant. The case does not specifically state whether there are unhealthy conditions in the basement. In any event, the court denied the landlord's petition to collect past rent because the apartment is illegal. Yet, the court inexplicably also granted the landlord a judgment of possession and stayed the warrant for through April 29, 1999.
Notes
The court had no authority to render a judgment of possession in landlord's favor if it simultaneously denied the landlord a right to collect the rent. The proper result should be that the landlord commence a holdover proceeding against the tenant. The court cannot on its own convert a nonpayment proceeding into a holdover proceeding.

Case Caption:
Matter of Jacreg Realty Corp. v. Kornreich
Issues/Legal Principles:
Civil Court judge wrongly refused to issue the landlord 3 warrants based on the manner in which non-military affidavits were obtained.
Keywords:
warrants; default judgment; military service; mandamus
Court:
Supreme Court, New York County
Judge:
Hon. Wetzel
Date:
April 28, 1999
Citation:
NYLJ, page 27, col 4
Referred Statutes:
RPAPL 701 & 732; 50 USCA 520(1); CPLR 409-a
Summary:
The landlord brought a mandamus proceeding against Civil Court Judge Shirley Kornreich demanding that she enter default judgments in three pending summary proceedings. (A writ of mandamus is sought, for example, when a party wants a government official, such as a judge, to take specific action). The landlord alleged that the judge refused to issue the warrants because the landlord did not make a personal determination as to whether or not the tenants were in military service. The judge endorsed each petition with the words, "Warrant rejectedžif petitioner's agent could speak to the defendant on the telephone re his non-military status, why couldn't defendant be served personally?" The law requires that before a default judgment may be entered the landlord must file an affidavit setting forth facts showing that the defendant is not in military service. The affidavits submitted on the three cases each state that the person who answered the phone said that the defendant was not in military service nor dependent on anyone in the military. Judge Kornreich's position is that a mandamus is inappropriate because the entry of an eviction warrant under these circumstances is a matter of discretion, not a purely ministerial act. The judge also argued that the landlord could conduct a second investigation and refile the warrant with a detailed affidavit which would remedy the grounds for denial, especially since these type of investigations are traditionally conducted by investigators who speak in person to the tenants themselves or the tenants' neighbors.
The landlord argued that the Court of Appeals determined in the case of Brisco v. Braun, 84 NY2d 674 (1994) that once the procedural requirements have been met in a summary proceeding, judgment in favor of a landlord must be granted, and that a mandamus to compel this result is appropriate, if the judgment is not granted. The Court ruled that the judge's insistence that a personal investigation be conducted is not required by the statute. Further the affidavits of service of the petitions upon the tenants were sufficient and satisfactorily complied with the statutory requirements. The Court also found that the judge's proposal that the landlord could re-conduct an investigation begs the question as to whether the landlord is even required to do so. The Court granted the mandamus against Judge Kornreich, which means she must issue the default judgments based on the papers filed by the landlord.

Case Caption:
Matter of Rehwindle v. New York City Loft Board
Issues/Legal Principles:
Civil Court lacks jurisdiction to determine owner's complaince with Loft Board deadlines and therefore Loft Board must retain jurisdiction over the compliance issues.
Keywords:
lofts; non-compliance
Court:
Supreme Court, New York County
Judge:
Hon. Beverly Cohen
Date:
April 28, 1999
Citation:
NYLJ, page 26, col 2
Referred Statutes:
Multiple Dwelling Law 284
Summary:
Three tenants brought this Article 78 proceeding in Supreme Court challenging a decision rendered by the Loft Board. The Loft Board dismissed their application for a finding that the owner had filed to comply with the legalization timetables set forth in the Multiple Dwelling Laws (i.e., a finding of noncompliance). When the Loft Law was enacted in 1982, owners were required to 1) file an alteration application with the Department of Buildings (DOB); 2) obtain an alteration permit from DOB; 3) complete the fire and safety work; and 4) obtain a residential certificate of occupancy from the DOB. Under the 1982 law, owners should have obtained a certificate of occupancy within three years, i.e., by June 1985. If the certificate of occupancy was not obtained by such date, a landlord could not bring a summary nonpayment proceeding against tenants.
In 1992, the Loft Law was amended and the deadlines extended. Landlords were permitted until 1995 to obtain a certificate of occupancy. The amendment also allowed landlords to apply to the Loft Board for extensions of time to comply with the 1992 timetables. In 1996, the Loft Law was again amended and the deadline for obtaining a certificate of occupancy was extended to July, 1999. Extensions of time could also be sought from the Loft Board.
In June 1987, the tenants filed an application with the Loft Board seeking coverage under the Loft Law. In September, 1990 the Loft Board granted the application and determined that the building was an interim multiple dwelling (IMD, i.e., a Loft building). The owner thereupon became subject to the compliance deadlines. The owner never complied with the 1982 timetable, complied with only one step in the 1992 deadlines, and sought extensions on the other steps. In 1995, the Loft Board dismissed with prejudice the owner's application for another extension.
In December 1990, the tenants filed an application with the Loft Board for a finding of non-complaince, but the Loft Board did not act upon the application apparently due to the owner's various requests for extensions. By the time the Loft Board set a hearing date, the 1996 amendments became effective and the tenants were advised that the Loft Board intended to dismiss the tenant's non-compliance application as moot, since the amended law gave the landlord additional time periods for complaince. The Loft Board dismissed the tenant's application for a finding of noncompliance as moot in January, 1997. The Loft Board's decision included the statement that "the dismissal of tenant-initiated noncompliance proceedings has no effect on a tenants' rights vis-a-vis payment of rent." One of the Loft Board members dissented under the theory that the 1996 legislation did not remove the effect of the 1992 timetable and thus did not excuse the owner from complying with the 1992 timetable. The tenants appealed the Loft Board decision as arbitrary and capricious and further asserted that the Loft Board unreasonably delayed processing their application.
The Supreme Court ruled that the Loft Board's decision was arbitrary and capricious. The Court noted that there have been no appellate decisions as to the right of an owner to collect rent which accrued during the period prior to the amendment. Since the 1996 law contains the identical language as the 1992 law, the Court held that case law relevant to the 1992 amendment was applicable, to wit: case law held that the 1992 law permitted the collection of prospective rent, provided that the owner was in compliance with the 1992 law deadlines, but the 1992 law did not excuse the owner's non-compliance for any period prior to the effective date of the 1992 amendment. Under this same reasoning, the 1996 law must be construed in such a manner that it does not retroactively excuse the owner's noncompliance with the 1992 law deadlines. The Loft Board's position was that the tenants could obtain relief from the agency in the event that the owner subsequently fails to comply with the 1996 law deadlines, but any past non- compliance issues related to the 1992 deadlines must be raised in court when and if the tenants are brought to court in a nonpayment proceeding. The Court disagreed, finding that the Loft Board should have retained jurisdiction over the tenants' application. The Court noted that the Civil Housing Court could not effectively adjudicate the issue of whether pre-July 1996 rent is owed in light of the tenants' non-compliance allegations which the Civil Court does not have jurisdiction to entertain. Thus, the Loft Board must hear this matter to determine the ultimate status of the complaince issues.

Case Caption:
Banchik v. Ruggieri
Issues/Legal Principles:
Landlord is denied discovery request to conduct an invasive bladder biopsy on tenant for purposes of determining tenant's "disability" in an owner occupancy proceeding.
Keywords:
discovery; owner occupancy; physical disability; physical examination of tenant
Court:
Civil Housing Court, New York County
Judge:
Hon. Howard Malatzky
Date:
April 28, 1999
Citation:
NYLJ, page 27, col 6
Referred Statutes:
CPLR 408 & 3102
Summary:
The landlords brought an owner occupancy proceeding against the tenant. The tenant asserted that she was exempt from eviction because of a "physical disability." Landlord asked the court for pre-trial discovery to ascertain the nature and extent of tenant's disability. The court granted the landlords the right to depose tenant and her physician and to conduct a physical examination of the tenant to determine the existence and/or extent of the tenant's interstitial cystitis (the claimed disability). The landlords have come back to the court and asked for further discovery in the form of an internal examination and various diagnostic tests, including a cystoscopy and a bladder biopsy. Absent such testing, any diagnosis would be inconclusive and speculative, according to the landlords' expert physician. The tenant vehemently opposes this application because she says that internal pelvic examinations are extremely painful to her and that even increased doses of medication cannot dull the pain of such an exam. She further states that a bladder biopsy necessitates anesthesia which would pose a grave danger to her. The Court noted the reluctance on the part of judges to permit any kind of tests which are painful or potentially dangerous. And therefore the Court sided with the tenant and refused the landlords' request that the tenant submit to an invasive internal examination. The Court observed that the landlords have not proven to the Court's satisfaction that the tests would not be painful.

OLD CASE
Case Caption:
Rossmill Associates v. Curtis
Issues/Legal Principles:
If a stipulation of settlement does not contain a provision for attorney's fees, the right to pursue a claim for fees is deemed waived.
Keywords:
attorney's fees; stipulation
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Ruben Martino
Date:
February 26, 1999
Citation:
NYLJ, page 26, col 2
Referred Statutes:
none cited
Summary:
In a nonpayment proceeding, tenant entered into a stipulation acknowledging owing arrears. On the date the stipulation was signed, tenant tendered the full payment of rent and additional charges. The stipulation provided that upon collection of good funds the proceeding shall be deemed discontinued. There was no provision in the stipulation for the payment of attorney's fees. Therefore landlord's application for such fees was denied by the lower court. The Appellate Term upheld, stating: If the parties intend for an attorney's fees claim to survive execution of a settlement agreement, the claim should be expressly preserved in the agreement.

New York Law Journal,
decisions for the week of April 19-23, 1999 (9 cases)

Case Caption:
In Re Salvador Rosillo v. New York City Loft Board
Issues/Legal Principles:
The Loft Board's determination of the legal rent of a unit covered by the Loft Law is upheld; the prior rent determination of the DHCR is void due to lack of jurisdiction.
Keywords
subject matter jurisdiction
Court:
Supreme Court, Appellate Division, First Department
Judge:
lower court judge: Hon. Richard Lowe III
Date:
April 19, 1999
Citation:
NYLJ, page 27, col 3
Referred Statutes:
CPLR Article 78
Summary:
Tenant filed an overcharge complaint with the DHCR and DHCR determined the legal rent, disregarding the landlord's objections that the DHCR lacked jurisdiction over tenant's unit. Tenant's unit is an interim multiple dwelling unit ("IMD") covered by the Loft Law. Landlord filed a PAR that was dismissed only because it was not timely filed. Later, the Loft Board issued a determination of the legal rent. (Apparently, the Loft Board set a higher legal rent than the DHCR). The tenant filed an Article 78 proceeding in the Supreme Court, New York County, challenging the Loft Board's determination. The Supreme Court upheld the Loft Board's determination and the Appellate Court affirmed. The tenant's unit was, at all times, an IMD unit covered by the Loft Law. The DHCR does not have jurisdiction to set the legal rent for IMD units and, therefore, its rent determination is void. The Loft Board was therefore free to determine the legal rent and its determination was upheld by the Appellate Court.
Notes:
Until the landlord of a building which contains IMD units obtains a residential certificate of occupancy (i.e., legalizes the units), the units remain under the jurisdiction of the Loft Board, which will resolve disputes regarding the rent and other matters. The Rosillo case involved a pre-legalization rent dispute. After the landlord obtains a residential certificate of occupancy, the landlord may apply to the Loft Board for a "final rent order." The Loft Board's order will then determine the rent and order the landlord to register this rent with the DHCR as the initial legal regulated rent. From this point forward, the DHCR - not the Loft Board - has jurisdiction over the unit.

Case Caption:
In Re Serencha Realty Corp. v. DHCR
Issues/Legal Principles:
The DHCR may review rental history more than four years old when it determines rent overcharge applications filed prior to April 1, 1984.
Keywords:
rent overcharge; statute of limitations
Court:
Supreme Court, Appellate Division, First Department
Judge:
lower court judge: Hon. David Saxe
Date:
April 19, 1999
Citation:
NYLJ, page 28, col 1
Referred Statutes:
RSL Section 26-516(a); Section 33 of the RRRA of 1997
Summary:
Tenant filed an overcharge complaint with the DHCR prior to April 1, 1984. DHCR reviewed the rent history, without limiting itself to the four years prior to the filing date of tenant's complaint, and issued an overcharge determination. The landlord filed an Article 78 proceeding with the Supreme Court, arguing that the RRRA of 1997 strictly prohibits a review of rent history more than four years old and the DHCR improperly considered earlier rent history. The Supreme Court held that this prohibition does not apply to rent overcharge applications filed with the DHCR prior to April 1, 1984, and the Appellate Court affirmed.

Case Caption:
Avon Bard Company v. Levine
Issues/Legal Principles:
Apartment remains subject to rent stabilization after the expiration of the J-51 tax abatement because landlord did not include the required notice in the tenant's original lease and lease renewals.
Keywords:
J-51; tax benefit program; expiration of rent stabilization coverage
Court:
Appellate Term, First Department
Judge:
lower court judge: Hon. Douglas E. Hoffman
Date:
April 19, 1999
Citation:
NYLJ, page 28, col 5
Referred Statutes:
RSL Section 2520.11[o][2]; RPL Section 234
Summary:
RSL Section 2520 lists various exceptions to rent stabilization law protection. Some buildings, such as the building at issue in this case, become subject to rent stabilization because the landlord participated in a tax benefit program, such as J-51. The J-51 program gives the landlord a real estate tax abatement for a certain period of time. While the landlord is enjoying the benefits of the tax abatement, the apartments in the building are subject to rent stabilization. Once the tax abatement ends, the landlord may charge market rent, but only if each lease and lease renewal included a notice advising the tenant that the apartment would become destabilized upon the expiration of the tax benefits. RSL Section 2520.11[o][2]. The landlord in this case brought an eviction proceeding against the tenant after the tax abatement ended, claiming that the tenant's apartment was no longer subject to rent stabilization. The Court conducted a trial to determine whether the landlord had given the tenant the required notice. The trial court heard the testimony of landlord's witnesses and found that the landlord did not meet his burden of proof. Although landlord's witnesses claimed to have mailed notice to the tenant, they did not retain any proof of mailing nor did they make any internal record that the mailing was accomplished. The trial court also found that the landlord's testimony was not credible. The trial court therefore dismissed the landlord's holdover petition, on the grounds that the apartment remained subject to rent stabilization. The Appellate Court affirmed, finding no reason to disturb the trial court's credibility findings.

Case Caption:
Tierra West Apartments, LLC v. Bobadilla
Issues/Legal Principles:
A landlord, which is a limited liability company, cannot represent itself in housing court but must be represented by an attorney.
Keywords:
limited liability company; voluntary association; corporation; representation by attorney
Court:
Housing Part of the Civil Court, New York County
Judge:
Hon. Judge Spears
Date:
April 21, 1999
Citation:
NYLJ, page 27, col 2
Referred Statutes:
CPLR Section 321; NYCCCA Sections 1809 and 1809A; Uniform City Court Act Sections 1809 and 1809A; Uniform District Court Act Sections 1809 and 1809A; Uniform Justice Court Act Sections 501 and 1809
Summary:
Landlord, a limited liability company ("LLC"), brought a nonpayment proceeding against tenant. The LLC was represented by one of the members, rather than by an attorney retained by the LLC. The court dismissed the proceeding, on the grounds that an LLC cannot appear "pro se" in housing court, but must retain an attorney to represent the LLC. CPLR Section 321 clearly states that corporations and voluntary associations must appear in all courts (except small claims court) represented by an attorney. Although CPLR Section 321 does not specifically mention LLCs, the Court held that an LLC is a voluntary association within the meaning of CPLR Section 321.

Case Caption:
Kiss v. Castellanos
Issues/Legal Principles:
Nonpayment proceeding is dismissed because the affidavit of service of the notice of petition and petition is defective on its face (i.e., even if the affidavit is true, the facts alleged do not constitute proper service).
Keywords:
nonpayment proceeding; rent demand
Court:
Housing Part of the Civil Court, New York County
Judge:
Hon. Billings
Date:
April 21, 1999
Citation:
NYLJ, page 27, col 3
Referred Statutes:
RPAPL Sections 711, 735 and 741; CPLR Section 3211;
Summary:
Tenant brought a motion to dismiss landlord's nonpayment proceeding on the grounds that the petition does not provide sufficient details about how the rent demand was made and because the affidavit of service of the notice of petition and petition is defective on its face (i.e., even if the affidavit is true, the facts alleged do not constitute proper service). The Court's decision addresses issues concerning the oral rent demand, the written rent demand, and service of the written rent demand. Ultimately, the Court dismissed the proceeding due to the defective affidavit of service. RPAPL Section 735 (1) provides that "(s)ervice of the notice of petition and petition shall be made by personally delivering them to the respondent; or by delivering to and leaving personally with a person of suitable age and discretion who resides or is employed at the property sought to be recovered, a copy of the notice of petition and petition, if upon reasonable application admittance can be obtained and such person found who will receive it; or if admittance cannot be obtained and such person found, by affixing a copy of the notice of petition and petition upon a conspicuous part of the property sought to be recovered or placing a copy under the entrance door of such premises; and in addition, within one day after such delivering to such suitable person or such affixing or placement, by mailing to the respondent both by registered or certified mail, and by regular first class mail...." The affidavit of service in this case alleges that the notice of petition and petition was served on "Joanne Castellanos Tenant respondent...a respondent therein named, by delivering a true copy of each to said respondent personally" at the property sought to be recovered. The Court noted several defects in this allegation. Joanne Castellanos is not the respondent-tenant. Assuming that Joanne Castellanos is a person of suitable age and discretion who received the notice of petition and petition for the respondent-tenant, the affidavit is defective because it does not allege that Joanne Castellanos resides or is employed at the property sought to be recovered. When a person of suitable age and discretion is served instead of the actual respondent, RPAPL Section 735 requires the process server to mail a copy of the notice of petition and petition to the respondent, by first class mail and registered or certified mail. The affidavit does not allege that this was done. The Court dismissed the proceeding, due to the defective affidavit of service.

Case Caption:
725 70th Street Corp. v. Molino
Issues/Legal Principles:
Tenant may stay the issuance of a warrant by tendering the rent due; abatement hearing is required to determine this amount.
Keywords:
warrants; abatement
Court:
Civil Court, Kings County
Judge:
Hon. Peter Wendt
Date:
April 21, 1999
Citation:
NYLJ, page 29, col 5
Referred Statutes:
RPAPL Sections 749(3) and 751(1)
Summary:
A nonpayment proceeding was settled by a stipulation wherein tenant paid landlord over $5,000 in back rent and tenant consented to a final judgment in landlord's favor in the amount of $1,562.16. The stipulation provided that this amount was to be paid in monthly installments of $75.00 in addition to current rent and that any money received from landlord was to be applied to current rent first and then to arrears. When tenant failed to pay the first installment (due January 1999) pursuant to the stipulation, landlord brought a motion requesting the court to issue an order allowing the warrant of eviction to be issued and executed forthwith. In opposition to the motion, the tenant offered $417.61 to the landlord, which she said would satisfy the $75 payments and some of the rent due for January and February, leaving a balance of $567.61 for January and February. Tenant alleged that she is entitled to a significant rent abatement for the months of January and February, because of various conditions in her apartment (including exposed electrical wires, non-working oven and inadequate heat). Tenant argued that a warrant cannot issue for her failure to pay January and February 1999 rent in accordance with the stipulation, until the court considers her abatement claim and conducts a hearing to determine the rent actually due. The Court agreed with tenant and scheduled a hearing date. The Court noted that RPAPL Section 751(1) provides that a tenant may stay the issuance of the warrant by tendering the rent due. However, in this case, the rent due is not clear because of the tenant's claim for abatement. Therefore, the Court cannot issue a warrant until it determines the amount of rent due for January and February 1999. The Court noted that even if a warrant had already issued, the tenant had demonstrated good cause to stay the issuance of the warrant because she was confronted with unwarranted delays at the Department of Social Services ("DSS").

Case Caption:
Perrotty v. Shor
Issues/Legal Principles:
Housing court judge should have granted post-judgment motion for appointment of guardian ad litem, where tenant's conduct at trial and a psychiatric evaluation indicated that tenant suffered from a psychiatric disorder which made her incapable of representing herself at trial.
Keywords:
guardian ad litem; psychiatric disorder; DSS
Court:
Appellate Term, First Department
Judge:
lower court judge: Hon. Arlene Hahn
Date:
April 22, 1999
Citation:
NYLJ, page 28, col 2
Referred Statutes:
CPLR Section 1201
Summary:
Landlord brought a holdover proceeding against tenant on the grounds that tenant would not provide access to her apartment. Although the trial court gave tenant many opportunities to obtain an attorney, she represented herself very inadequately and lost the case. After a judgment of possession had already issued, the Department of Social Services ("DSS") made a motion to vacate, requesting the appointment of a guardian ad litem because of tenant's psychiatric disorder. The trial court summarily denied the motion but the appellate court reversed and remanded to the trial court with directions to appoint a guardian ad litem. The tenant behaved erratically at trial, was unable to coherently examine witnesses and a psychiatric evaluation report showed that she suffered from bipolar disorder and impaired judgment. Under these circumstances, the trial court should have entertained and granted the post-judgment motion for the appointment of a guardian ad litem. A guardian ad litem may actually be able to assist the landlord gain access to the apartment rendering tenant's eviction unwarranted and unnecessary.

Case Caption:
78/79 York Associates v. Rand
Issues/Legal Principles:
Tenant's claim for rent overcharge is not time-barred even though it was asserted more than four years after the tenant began paying the overcharge; tenant may challenge annual apartment rent registration statement which was in effect four years prior to the date tenant asserted the rent overcharge claim.
Keywords:
rent overcharge; four-year statute of limitations
Court:
Appellate Term, First Department
Judge:
lower court judge: Hon. Timmie Erin Elsner
Date:
April 22, 1999
Citation:
NYLJ, page 28, col 2
Referred Statutes:
CPLR Section 213-a; RSL Section 26-516(a)
Summary:
Landlord sued tenant for nonpayment of rent; tenant filed an answer on October 3, 1995 including a counterclaim of rent overcharge. The tenancy began on August 5, 1991 at a monthly rent of $750.00 per month. The legal rent registered by the prior landlord with the DHCR effective April 1991 was $267.45; the legal rent registered in July 1992 (effective April 1992) was $750.00. The tenant alleged that this rent increase was illegal. However, since the rent increase took place more than four years prior to October 3, 1995 (the date of the tenant's counterclaim), the owner argued that the tenant's claim was barred by the four-year statute of limitations set forth in CPLR Section 213-a, as recently amended by the RRRA of 1997. CPLR Section 213-a, as amended by the Rent Regulation Reform Act ("RRRA") of 1997, states as follows: "An action on a residential rent overcharge shall be commenced within four years of the first overcharge alleged and no determination of an overcharge and no award or calculation of an award of the amount of any overcharge may be based upon an overcharge having occurred more than four years before the action is commenced. This section shall preclude examination of the rental history of the housing accommodation prior to the four-year period immediately preceding the commencement of the action." The trial court noted that the rent registration filed with the DHCR effective April 1, 1991 was never amended and remained in effect through March 30, 1992. The trial court found that it could examine this rent history because it is not more than four years old. Thus, the legal regulated registered rent as of October 1991 (four years prior to the tenant's counterclaim) was $267.45. The trial court therefore denied the landlord's motion to strike the tenant's overcharge counterclaim. In addition, the trial court rejected the owner's argument that the tenant's cause of action for overcharge accrued on August 5, 1991 (the date the tenant entered into the lease) and is therefore time-barred four years later. The trial court held that the cause of action for overcharge accrues on each occasion that the tenant pays rent in excess of the legal rent. Therefore, the cause of action accrues on an ongoing basis. The appellate court affirmed the trial court's decision, reiterating that the tenant's overcharge claim does not require examination of rent history that is more than four years old. Amended CPLR Section 213-a or amended RSL Section 26-516(a) does not bar the overcharge claim. The rent registration statement in effect four years prior to October 1995 (the date the tenant asserted an overcharge claim) was the 1991 registration statement which represented that the rent was $267.45. The tenant is entitled to recover any overcharges paid within four years of tenant's October 1995 claim.

Case Caption:
Defeo v. Carmody
Issues/Legal Principles:
Landlord's failure to serve notice of petition and petition within three months of date new dog joined household constituted waiver of no pet clause lease.
Keywords:
pet; holdover
Court:
Mount Vernon City Court, Westchester County
Judge:
Hon. Judge Duffy
Date:
April 23, 1999
Citation:
NYLJ, page 32, col 2
Referred Statutes:
Westchester County Law 8-1988, Chapter 694.11
Summary:
When tenants began residing in apartment, they were keeping four dogs in violation of a no-pet clause in their lease. However, since the landlord did not timely object, the landlord waived its rights to enforce the no-pet clause in the lease. When one of the four dogs died, the tenants replaced it with a new dog during the week of August 25, 1998. Landlord served a notice to cure upon tenants on December 10, 1998 and served a holdover petition on February 5, 1999. The tenants argued (1) that the landlord had already waived its right to object to occupancy of the premises by four dogs (the newest dog was just a replacement) and (2) the landlord did not object to the new dog within three months, as required pursuant to Westchester County Law (which is nearly identical to the New York City Pet Law). The court rejected waiver argument, citing to the Supreme Court, New York County case of Park Holding Co. v. Emicke (1996). Landlord's prior waiver is limited to existing pets in the household and does not extend to pets which tenant may joining the household in the future. In other words, a landlord may object to any new pet a tenant acquires even if landlord did not object to pets tenant acquired previously. However, the court dismissed the landlord's holdover proceeding because the landlord did not commence a proceeding (that is, serve a holdover petition) within three months of late August 1998. Landlord could have timely objected by serving a holdover petition in late November 1998.

New York Law Journal,
decisions for the week of April 12-16, 1999 (8 cases)

Case Caption:
Susan Woody v. Franco
Issues/Legal Principles:
Large amounts of drugs found in Housing Authority tenant's apartment indicated their presence was for sale, thereby justifying the termination of the tenancy.
Keywords:
non-desirability; illegal activity
Court:
Appellate Division, First Department
Judge:
lower court: Hon. Phyllis Gangel-Jacob
Date:
April 12, 1999
Citation:
NYLJ, page 26, col 1
Referred Statutes:
CPLR 7804(g)
Summary:
The tenant of city public housing was charged with non-desirability based on illegal drug activity. At the hearing a police officer testified that he entered the tenant's apartment pursuant to a bench warrant for her son and while there observed a large quantity of narcotics in plain view in a bedroom. The Housing Authority terminated the tenant's tenancy on grounds of non- desirability. The tenant appealed on the basis that her son has permanently left the apartment (an issue which the court determined she presented insufficient proof). The appellate court held that the penalty of termination of tenancy was fair given the large amount of drugs found in the apartment which were obviously intended for sale.

Case Caption:
Kasapidis v. Sanchez
Issues/Legal Principles:
Landlord's wife who cashed rent checks after termination of tenancy had authority to cash the checks and knowingly accepted them, which resulted in a reinstatement of the tenancy and the dismissal of the holdover proceeding.
Keywords:
rent waiver; principle/agent
Court:
Civil Housing Court, Kings County
Judge:
Hon. Delores Thomas
Date:
April 14, 1999
Citation:
NYLJ, page 29, col 5
Referred Statutes:
none cited
Summary:
Landlord brought a holdover proceeding against the tenant on owner occupancy grounds. After the tenancy terminated on August 31, 1998, landlord deposited tenant's DSS (welfare) rent check on September 4th. On September 26th, a second DSS check was deposited. On September 29th, landlord sent DSS a money order for the two rents and a letter stating that the checks were inadvertently deposited. On October 5th a DSS check was sent to the landlord, but the landlord did not inform the court what happened to this check. On October 21st DSS sent another check which landlord returned with an accompanying letter on October 27th. The Court ruled that there was no question that the landlord accepted the rent after the termination of the tenancy which would vitiate the termination notice and reinstate the tenancy. The only question before the Court was whether it was a knowing acceptance or did it fall under the exception of an inadvertent acceptance of the rent which would not vitiate the termination notice. The elements to be looked at for the latter are (1) length of time the checks were retained, (2) whether the checks were cashed, and (3) did the landlord explain the inadvertent acceptance to the tenant. The Court analyzed a number of rent waiver cases, compared their specific facts, and ruled that the landlord's wife who deposited the rent checks was one who had authority to make decisions. She is a co-owner of the building, listed as a co-landlord in the lease, listed as a co-petitioner in a prior holdover proceeding, and listed as the payor on an oil delivery bill to the building. In such circumstances, her authority is present and she made a knowing acceptance of the rent. The Court added that even if the landlord's wife had no authority to make decisions about the building, the landlord placed her in a position that gives her actual or implied powers and therefore as his agent he is bound by her actions. As a result the Court dismissed the petition, which means that the owner must tender the tenant a renewal lease and cannot bring another owner occupancy proceeding until that lease expires.

Case Caption:
310 East 4th Street HDFC v. Kudish
Issues/Legal Principles:
Tenant's lease is invalid since its extension date commenced after the co-op board voted that all agreements between tenant and the prior president were void.
Keywords:
leases
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Eardell Rashford
Date:
April 15, 1999
Citation:
NYLJ, page 29, col 5
Referred Statutes:
none cited
Summary:
Landlord brought a holdover proceeding against tenant. Tenant was given an eight-year lease by the former president of the HDFC. But the Appellate Term ruled that the lease was invalid and not enforceable against the current HDFC landlord. In a related Supreme Court action brought by the currently elected directors and officers of the HDFC, it was adjudged that any action taken by the former president on behalf of the HDFC after April 29, 1992 was declared null and void, including any leases granted to tenant. During the Supreme Court matter, the tenant did not disclose the existence of the eight-year lease which he now claimed granted him possessory rights to the apartment. Even though the lease was executed on February 11, 1992, its purported extension term did not start until July 1, 1992, which was after the date the Supreme Court determined all leases be deemed null and void between this tenant and the prior president. Therefore, the Appellate Term reversed the Housing Court's dismissal of the petition, reinstated the petition and remanded the proceeding for a hearing as to the amount of use and occupancy owed by the tenant.

Case Caption:
Ariel Associates v. Brown
Issues/Legal Principles:
Tenant's prompt cure of a one month sublet, where the rent and security deposit were returned to the subtenant, does not rise to the level of profiteering (which is generally a noncurable offense).
Keywords:
overcharges; sublet; cure
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Marcy Friedman
Date:
April 14, 1999
Citation:
NYLJ, page 26, col 2
Referred Statutes:
none cited
Summary:
The Appellate Term affirmed the lower court's decision which dismissed the holdover proceeding based on an alleged unlawful sublet. The petition was dismissed because the landlord did not serve a notice to cure on the theory that tenant's profiteering is not curable. However, the 1996 summer sublet was short term and did not rise to the level of profiteering as to warrant forfeiture of the tenancy without a notice to cure, according to the Appellate Term. Additionally, in a prior holdover proceeding, the landlord had served a notice to cure. In this proceeding, the tenants had responded by arranging for the subtenants to quickly vacate after only one month's occupancy and by returning their rent and security deposit. The Appellate Term held that the landlord has no standing to complain concerning other remote instances of alleged overcharging, dating back to 1992 which occurred during the ownership of predecessor landlords. The Appellate Term also agreed with the lower court that it was inappropriate to award the tenants attorney's fees in light of their conduct.

Case Caption:
Elghanayan v. George
Issues/Legal Principles:
Landlord who agrees to waive primary residency restrictions against tenant in a negotiated settlement is bound by the agreement because landlords, but not tenants, can voluntary waive such rights.
Keywords:
waiver; estoppel; nonprimary residency
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Donna Mills
Date:
April 15, 1999
Citation:
NYLJ, page 29, col 4
Referred Statutes:
22 NYCRR 2200.15
Summary:
In 1973 the tenant gave up his rent control apartment and relocated to another apartment in the same building which was less desirable. The landlord and tenant entered into an agreement which stated that in consideration for giving up the initial apartment and relocating, the tenant could reside in the second apartment "without time limitation and without restrictions of any kind." In 1996 the landlord brought a nonprimary residency proceeding against the tenant and his wife. They were absent from the apartment for a number of years while he underwent specialized cancer treatment in Europe. The Appellate Term reversed the lower court's decision which granted the landlord a judgment of possession against the tenant. The Appellate Term held that the 1973 agreement "is fully enforceable and precludes the current landlord from evicting tenant for nonprimary residence." The Court noted that the tenant relied on the agreement's terms when he gave up his more desirable apartment. The exchange means that the tenant's apartment "must be viewed as unencumbered by traditional primary residency constraints" (i.e., occupancy more than 180 days per year). The Court held that this case is distinguishable from cases where a tenant agrees to maintain an apartment as their nonprimary residence so that the landlord may charge an unlawful rent. These situations are not permitted by the courts. The Court concluded, "While waivers by tenants of the benefits of rent regulation are prohibited as against public policy, a landlord's voluntary surrender of his rights and remedies as part of a negotiated agreement is not."
Notes: >br>
Disclosure: Colleen McGuire's law firm represented the tenant in this case. This is a great decision for tenants because it firmly establishes the position that tenants cannot waive their rights, but landlords are not constrained from waiving rights granted them under the rent regulation laws. This landlord tried to raise the public policy flag of a housing shortage for why this tenant should not be entitled to engage in nonprimary residency activity, especially since the tenant's rent is only $49.00 per month. However, the landlord was exposed as a hypocrite because 13 of the 18 units in this building have been left vacant and warehoused by the landlord for ten years. Whether the Appellate Term gave any weight to this fact in rendering its decision is not known.

Case Caption:
Elkin v. Roldan (DHCR)
Issues/Legal Principles:
Tenant's 10 day late filing of response to luxury deregulation petition did not justify DHCR's order deregulating this rent stabilized apartment, particularly where the tenant's rent did not exceed the statutory threshold.
Keywords:
luxury deregulation
Court:
Appellate Division, First Department
Judge:
lower court: Hon. William Wetzel
Date:
April 15, 1999
Citation:
NYLJ, page 26, col 2
Referred Statutes:
Rent Regulation Reform Act of 1993; Administrative Code of City of NY 26-504.1 & 504.3; 9 NYCRR 2507.5(d); RSC 2527.5(d)
Summary:
Landlord filed a petition for luxury deregulation against the tenant in 1993 and 1994 and 1995. The law in effect at that time allowed deregulation of a rent stabilized apartment if the rent exceeded $2,000 per month and the tenant's household income for the two prior years exceeded $250,000. In 1997 the law was amended to lower the threshold income to $175,000. Once the petition is filed DHCR sends the tenant an income certification form (ICF) which gives the tenant 60 days to respond. In this case in 1995, the tenant's response was postmarked 10 days after the 60 day period. Her response indicated that she did not earn over $250,000 (similar to her responses to the 1993 and 1994 petitions). Ten months later the DHCR issued an order which deregulated her apartment. Tenant filed a PAR (a DHCR appeal) which was denied and then appealed to the Supreme Court through an Article 78. The judge there reversed and landlord appealed to the Appellate Division.
The Appellate Division upheld the dismissal of the petition. The Court acknowledged that a number of its prior decisions held that a tenant who failed to submit the ICF within the 60 day period lost their regulatory status. However, the Court distinguished this case from the others by the fact that in the other cases those tenants failed to respond at all, whereas here the tenant did respond, albeit tardy. Moreover, the Court found that the DHCR had this tenant's ICF before it rendered its decision. The Court rejected the DHCR's position that it is statutorily bound to deregulate an apartment if the tenant does not respond in the 60 day period. The Appellate Division held that the language of the statute does not mandate such a result for it provides that deregulation must occur only where the tenant "fails to provide the information." The Court held that this "language suggests that only a complete failure to return the Verification Notice, not an untimely return, will result in automatic deregulation." Additionally, under the Rent Stabilization Code the DHCR is authorized by accept late filings upon a showing of good cause. Here the tenant stated that she believed the ICF was filed ten days before the 60-day deadline and apparently office failure accounted for the inadvertent late filing. Since there was only a minimal delay in filing the ICF due to office failure, coupled with a meritorious defense (tenant's income is below the statutory amount), and no prejudice arises to landlord, the Court found the DHCR's decision arbitrary and capricious and upheld the reversal of the deregulation order.

Case Caption:
Lupo v. Masone
Issues/Legal Principles:
Although tenant is not bound to pay rent in the absence of a certificate of occupancy for her apartment, this does not entitle her to a refund of past rent paid.
Keywords:
certificate of occupancy; rent arrears; interference with contract
Court:
Civil Court, Bronx County
Judge:
Hon. Brigantti-Hughes
Date:
April 14, 1999
Citation:
NYLJ, page 28, col 3
Referred Statutes:
Multiple Dwelling Law 302 & 312; CPLR 3212(b)
Summary:
The daughter of the Tenant Plaintiff used to be married to the Defendant Landlord. The couple lived together for 23 years and separated in 1991. From January 1995 to June 1998 plaintiff lived in the defendant's three story apartment building in the basement. The landlord did not have a certificate of occupancy for the basement apartment. Plaintiff claims not to have known this when she moved in. In 1997, defendant contracted to sell the building and contracted to sell it vacant. Defendant asked plaintiff to leave, but she refused and as a result the sale never took place since the seller refused to buy unless the basement apartment was delivered vacant. In 1998, the landlord brought a nonpayment proceeding against plaintiff in Small Claims Court but the case was dismissed when the landlord admitted not having a certificate of occupancy for the basement apartment. Plaintiff then began this Civil Court action seeking a refund on all the back rent she had paid. The court ruled that it is well settled law that a tenant cannot recover back rent paid to the landlord for a period of time when the premises had no certificate of occupancy. The court noted that the tenant represented herself and was not knowledgeable of the law, and that it was reasonable for her to infer that because the Small Claims case was dismissed that she might be entitled to the recoup the back rent. Case law, however, refutes this position. The defendant brought a counterclaim for tortious interference with contract based on the plaintiff's alleged role in the failure to sell the building. The court rejected defendant's claim because he failed to establish several elements of the tort including that plaintiff's action refusing to vacate the basement apartment created the third party's breach of the contract of sale of the property, and proof that her action actually induced the third party to not go through with the sale. The court thus dismissed both parties' claims.

Case Caption:
City of New York v. Cordero
Issues/Legal Principles:
Tenant granted discovery in non-payment proceeding where City Landlord claimed economic infeasibilty of repairs
Keywords:
discovery; non-payment proceeding; repairs
Court:
Supreme Court, Kings County
Judge:
Hon. Sikowitz
Date:
April 14, 1999
Citation:
NYLJ, page 29, col 4
Referred Statutes:
CPLR 408
Summary:
In this non-payment proceeding, Petitioner-Landlord conceded that Tenant's warranty of habitability defense was justifiable and the inspection report confirmed numerous safety violations. However, Petitioner also asserted that to correct said violations was "economically infeasible" to the extent that the estimated cost of correcting the violations exceeded the anticipated market value of the restored structure. Tenant requested leave to conduct discovery from Petitioner to ascertain the extent of the alleged economic infeasibilty of correcting the violations. The Court granted this request to the extent that Tenant was permitted to serve interrogatories on Petitioner (ie: written requests for information) without prejudice to the Tenant's right to request additional discovery if this method did not prove to be sufficient. It is rare for a tenant to be granted the right to conduct discovery in a non-payment proceeding. However, in this case, the Court held that since Petitioner raised the defense of economic infeasibilty, this would "likely have a direct impact on tenant's defense and is likely to clarify disputed facts." Accordingly, tenant was permitted to obtain information regarding the economic infeasibility of correcting the violations since this information was solely within Petitioner's control.

New York Law Journal,
decisions for the week of April 5-9, 1999 (8 cases)

Case Caption:
EMC Mortgage Corp. v. Carr
Issues/Legal Principles:
Tenant cannot now claim rent stabilized status to co-op apartment because she lived with her husband at the time he bought the shares.
Keywords:
foreclosure; co-op; non-purchasing tenant
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Walter B. Strauss
Date:
April 6, 1999
Citation:
NYLJ, page 26, col 1
Referred Statutes:
General Business Law 352-eeee; RPAPL 721(3)
Summary:
Tenant and her husband were rent stabilized tenants in occupancy at the time her husband purchased the apartment during a non-eviction cooperative conversion plan. The wife is now claiming to be a non-purchasing tenant, which would entitle her to remain in the apartment as a rent stabilized tenant. The lower court rejected the wife's position and the Appellate Term upheld, stating that she and her husband were "united in interest at the time of the conversion and cannot now claim a dual status of purchaser [the husband] and non- purchasing tenant [the wife]. The wife took this position because the petitioner corporation foreclosed on her husband's ownership of the shares (for reasons not stated in the case). The petitioner's ownership of the apartment now reduces the wife to a mere occupant with no rights to remain in possession.

Case Caption:
390 West End Associates v. A.P.
Issues/Legal Principles:
Battered wife who fled the apartment for roughly one year due to the abuse does not lose primary residency status for purposes of her succession rights claim.
Keywords:
succession rights; unlawful eviction
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Arthur Birnbaum
Date:
April 6, 1999
Citation:
NYLJ, page 26, col 1
Referred Statutes:
RSC 2523.5; RPAPL 853
Summary:
The wife and son of the departed rent stabilized tenant of record claimed succession rights to the apartment. The wife began residing in the apartment in 1973 when she married her husband. She temporarily vacated the apartment in 1995 because of an abusive relationship with him. The Court held that this was an "excusable absence" which did not interrupt the chain of residency and was an appropriate factor for consideration by the court in its role as factfinder. The son's absence from the apartment was due to his enrollment in school. Under the Rent Stabilization Code a succession rights applicant does not lose their primary residence simply by attending school outside New York City. The tenants were deemed the prevailing parties and awarded attorney's fees. The Appellate Term reversed the lower court's finding that an unlawful eviction took place. The Court held that no eviction took place since the wife had been out of possession for ten months at the time the husband voluntarily surrendered the apartment during the course of a nonpayment proceeding. Punitive damages were therefore not appropriate.
Notes:
This is a very positive decision for battered women. The Appellate Term has made it clear that women who flee their abusers and the marital home will not suffer the loss of their home because of nonprimary residency laws. While not set in concrete, tenants are required to occupy their apartment 180 days per year. A growing body of "excusable absences" allows loopholes in the six-month residency requirement.

Case Caption:
Jocar Realty Co. v. Seliger
Issues/Legal Principles:
A petition must clearly state the grounds upon which a claim is made that the premises are not subject to any rent regulatory laws.
Keywords:
verification; substantial rehabilitation; regulated status
Court:
Civil Court, New York County
Judge:
Hon. Billings
Date:
April 7, 1999
Citation:
NYLJ, page 31, col 1
Referred Statutes:
RPAPL 741; CPLR 3020(d), 3021, 3022, 3025(b)
Summary:
Landlord brought two holdover proceedings against two tenants. The tenants each made a motion to dismiss the petitions and the motions were consolidated since they raised the same issues. The tenants first argue that the petitions are not properly verified. If an attorney verifies a petition, he or she must state the ground of their belief as to their knowledge of the contents of the petition's allegations and why their client is not signing the petition. In this case the attorney stated that the petition's allegations are based upon "the books and records of the Petitioner," but failed to explain why it was not verified by the landlord. A defective verification, however, requires notice of objection to the adverse party and this must be done with "due diligence." Otherwise the objector waives the defect. The first time the tenants raised the verification defect was in their motions brought roughly one month later which prompted the court to hold that the tenants did not exercise due diligence as contemplated by the statute. The court ruled that the tenants therefore waived this defect as a grounds to dismiss the petition.
The tenants also argued that the petition failed to state the correct regulatory status of the premises. The petitions alleged that the premises are not subject to rent regulatory laws because they were vacant after June 30, 1971 and are contained in a building having less than six residential units. The tenants argue, and the landlord concedes, that the building actually contains six residential units. The landlord's position is that when the units became vacant after June 30, 1971 they were substantially rehabilitated, which converted the building from less than six to six units and for which a new certificate of occupancy was issued. (Substantial rehabilitation is an exemption from rent stabilization laws). The landlord sought permission to amend the petition to reflect the accurate reason why the premises are not stabilized (i.e., substantial rehabilitation). If there are six or more units, a building is stabilized, which prompted the Court to note that on first impression the petition appears to contain a misstatement which may be a material defect warranting dismissal. The Court observed that if a petition errs in a statement that is not central to the claim of unregulated status, this is not fatal. But if the petition omits its basis for claiming why the premises are not subject to rent regulation, this is a fatal defect. The Court concluded that the erroneous reference to the number of residential units falls in the second category and is not a fatal defect. The petition correctly stated the premises as unregulated. However, the Court held that without an accurate statement that the building underwent substantial rehabilitation after January 1, 1974 (which is the reason it would be exempt from regulation), the failure to such circumstances renders the petitions fundamentally defective. These omissions are noncurable defects requiring the dismissal of the petitions.

Case Caption:
Parkchester Apartments v. Scott
Issues/Legal Principles:
1997 rent deposit law is not applicable to case commenced prior to the law's October 19, 1997 effective date.
Keywords:
rent deposit; legislative intent
Court:
Appellate Term, First Department
Judge:
lower court: Hon. Sherman
Date:
April 7, 1999
Citation:
NYLJ, page 29, col 1
Referred Statutes:
RPAPL 747-a & 749(3) & 731; CPLR 213-a; RPL 235-a; Rent Regulation Reform Act of 1997 section 39
Summary:
The Appellate Term held that the lower court did not abuse its discretion when it restored the tenant to possession of tenant's 20-year home during a nonpayment proceeding wherein tenant paid all arrears, landlord's legal fees, and eviction costs. The landlord appealed on grounds that the court erred in not allowing landlord to re-let the apartment after the eviction because the judgment was not paid prior to execution of the warrant and the tenant had not deposited the full amount of the judgment with the court, in accord with the recently enacted rent deposit law (RPAPL 747-a). The Court, however, noted that the statute became effective on October 19, 1997 and "shall apply to all proceedings to recover possession of real property in New York City on or after such date." Since the nonpayment proceeding was commenced in June, 1997, and the judgment was obtained on September 15, 1997, the Court ruled that the statute has no application. The Court noted that in enacting the Rent Regulation Reform Act of 1997, the Legislature expressly provided in another section (relating to rent registrations) that it was retroactive. The absence of parallel language in the rent deposit statute means that it was not intended to be applied before its effective date. Justice McCooe wrote a long dissent that argues that statutes governing procedural matters are generally applied retroactively, and that the Legislature gave only limited retroactive effect to this statute by delaying its effective date for 120 days rather than immediately. Since the order (seemingly of eviction) is dated March, 1998 and this was six months after the effective date of the statute, this proceeding should be subject to the rent deposit laws. Justice McCooe also found that there was no "good cause" for restoring this tenant since the tenant consistently breached stipulations of payment of rent schedules.

Case Caption:
McGann v. United States
Issues/Legal Principles:
Tenant's increase in rent due to an increase in social security benefits does not violate tenant's due process constitutional rights.
Keywords:
Section 8; COLA; due process
Court:
United States District Court for the Southern District of New York
Judge:
Hon. Scheindlin
Date:
April 7, 1999
Citation:
NYLJ, page 38, col 1
Referred Statutes:
28 USC 1651; 42 USC 1437f(k) & 401, 415(i)
Summary:
Plaintiff tenant represents himself and lives in a low-income housing complex where he receives Section 8 subsidies. In 1997, his social security income was increased by $48 per year pursuant to a Cost of Living Adjustment ("COLA"), and thereafter the landlord increased his rent by $124.00 per year. Tenant brought a lawsuit against the landlord and the U.S. Government asserting that the landlord's increases are inconsistent with Congressional intent in enacting COLA because Congress had no intent of counting the COLA increase as actual income. The tenant sought a declaratory judgment for the Court to declare whether Congress intended the COLA to result in increased rents in excess of the COLA increase and to determine whether the federal government is responsible and liable to off set any decrease income by the giving of a COLA increase. Tenant also claims that the landlord's rent increase amounts to an improper taking of property in violation of the due process clause of the Fifth Amendment. The Government moved to dismissed the complaint on grounds that the tenant failed to make a due process claim.
With respect to the Fifth Amendment argument, the Court ruled that tenant does not name a proper party for a suit of this nature because such lawsuits must be brought against individual federal agents or employees and not against a federal agency. The claims against the U.S. government are barred by the doctrine of sovereign immunity, and the U.S. did not consent to be sued. The claim against the landlord's alleged violation of due process rights must be dismissed because tenant failed to establish that the landlord acted under federal law. Such a lawsuit cannot be made against private entities, such as the landlord. With respect to the Section 8 increases, the Court held that tenant's rent was calculated according to the procedures outlined in the HUD handbook. Tenant's rent, with the increase, does not exceed 30% of his income. The Court held that tenant's due process allegations do not rise to the level of a substantive due process claim. Congress delegated rule-making authority to HUD and HUD promulgated regulations to define and verify income, and all social security payments are counted as income. The Court found that the regulation complies with the text of the statute and implements the statutory purpose of providing housing assistance to aid low income families. The Court found that nothing in the legislative history of the social security laws indicates a Congressional purpose not to count social security payments as income for Section 8 purposes, including cost of living adjustments. The Court ruled that there is no support for tenant's claim that he has a protected property interest in his Section 8 rent at a fixed amount or in excluding a COLA from his income in determining his Section 8 housing subsidy. Tenant's increase in social security benefits in the form of a COLA must also count as income.

Case Caption:
Matter of Oxford East Associates v. DHCR
Issues/Legal Principles:
Overcharges upheld where landlord neglected to submit all its rental documents despite having ample time to do so.
Keywords:
overcharges; treble damages
Court:
Supreme Court, New York County
Judge:
Hon. Ira Gammerman
Date:
April 7, 1999
Citation:
NYLJ, page 30, col 3
Referred Statutes:
none cited
Summary:
Tenant brought an overcharge complaint against the landlord at the DHCR in 1989. The DHCR notified the landlord to submit additional information, such as, copies of complete leases, riders and ledgers that would substantiate the rent being charged. The landlord sent copies of apartment registrations for the years 1985 to 1989, copies of leases for the tenant and a copy of a Major Capital Improvements Order. The landlord also said that they were still searching for copies of improvements made to the apartment before the tenant took occupancy. About ten months later the DHCR sent the landlord a notice that it would find overcharges and treble damages unless the landlord produced evidence to rebut the wilfulness of the overcharge. Upon receiving this notice, the landlord then sent a rent history chart, invoices and canceled checks relating to apartment improvements. The DHCR issued an order finding $6,263.52 overcharges and treble damages of $18,978.22. The DHCR also determined that the legal rent as of April 1, 1985 was $1,284.00. The landlord filed an appeal (PAR), but lost, and now files this Article 78 proceeding. The landlord claimed that the DHCR failed to credit a 10% vacancy allowance and a rent increase of 6.5% increase of the prior tenant in determining the legal rent. Had this been done, no overcharge would have ensued. The Supreme Court judge also ruled against the landlord. The judge found that the landlord had ample opportunity to submit the prior tenant's leases to prove entitlement to rent increases, but never did so. The landlord's excuse that the records were packed away in files because of its move to a new office was insufficient an excuse. Further, simply submitting annual apartment registration statements do not suffice as evidence of vacancies, lease renewals or rents charged because they are forms unilaterally filled out and filed by the owner and are not necessarily verified by the tenant or the DHCR. Further, the rent history chart submitted by the landlord did not establish that a vacancy existed since it was prepared by the landlord in response to the initial complaint and not made in the regular course of business (i.e., its authenticity was questionable). The court also rejected the landlord's request in the Article 78 to submit further proof that a vacancy occurred, but the court rightly pointed out that new evidence could not be submitted at that stage.

Case Caption:
Spanish Naturopath Society v. Boos
Issues/Legal Principles:
Tenants who did nothing to find alternative housing six months after judgment demonstrated no "good cause" and were denied any further stays on the execution of the warrant of eviction.
Keywords:
stays; warrants
Court:
Civil Court, Richmond County
Judge:
Hon. Straniere
Date:
April 7, 1999
Citation:
NYLJ, page 33, col 1
Referred Statutes:
RPAPL 753 & 749; CPLR 2201; Multiple Dwelling Law 300
Summary:
In a prior August, 1998 decision the Court awarded the landlord a judgment of possession against various tenants, but stayed the issuance of the warrant through February, 1999 so long as the tenants paid use and occupancy. Tenants failed to make payment, and the landlord moved to accelerate the issuance of the warrant of eviction. The issue facing the Court was whether it had authority to stay the execution of the warrant beyond six months. RPAPL 753 permits a court to grant a stay on the execution of a warrant for only six months from the date of a judgment of possession. The tenants ask the Court to extend the stay on equitable grounds. But the Court held that the tenants did not satisfy the statutory grounds for even granting a six-month stay: they have not made sufficient efforts to relocate their bungalows (these are unique housing accommodations), nor have they testified that they need one week, one month or one year in which to relocate. Instead they merely recite the individual problems they have and their limited financial resources seeking to remain in occupancy "seemingly in perpetuity." The Court observed that it was mindful of their problems, but "they sit there, apparently without a plan in place to deal with their impending evictions about which they have known for at least six months." Without even stating how much time they will need, the Court found that they are not acting in good faith.
The Court noted that although a judge may not have statutory authority to extend a six month stay on the issuance of a warrant, RPAPL 749(3) provided a basis for the judge to extend the stay on the execution of the warrant. A warrant remains unexecuted until the marshal delivers possession to the landlord and therefore the court has the power to vacate or stay execution upon good cause shown. Since RPAPL 749 contains no maximum period similar to the six months of RPAPL 753, the Court concluded that the period for granting a stay must be a reasonable period, and that similar criteria necessary to permit a stay in the issuance of the warrant should be considered in establishing what constitutes good cause in relation to the stay of the execution of the warrant. Applying the facts to the tenants' cases, the Court found that there is no basis to extend the execution of the warrant because the tenants in "Pollyanaish" fashion sat back and unreasonably did nothing.

Case Caption:
Doyle v. NYS DHCR
Issues/Legal Principles:
Tenant Association which files a PAR with DHCR on behalf of various tenants must disclose the membership names of the participating tenants.
Keywords:
Tenants Associations; freedom of association; freedom of speech; MCIs
Court:
United States District Court for the Southern District of New York
Judge:
Hon. Koeltl
Date:
April 7, 1999
Citation:
NYLJ, page 37, col 2
Referred Statutes:
Federal Rules of Civil Procedure 24(a), 56; 42 USC 1983, 1988
Summary:
The Stuyvesant Town Tenants Association and various politicians (e.g. Carolyn Maloney) sued the DHCR in federal court to prevent the agency's enforcement of a DHCR rule that requires any tenant association to include a membership list if it files a petition for administrative review ("PAR", which is an appeal of a DHCR decision) challenging a rent increase for a rent stabilized apartment. The Tenants argue that the required disclosure of their membership lists violates theirs rights to freedom of expression and association under the First and Fourteenth Amendments of the U.S. Constitution. The defendants DHCR and intervenor landlord Metropolitan Life moved to dismiss the complaint. The complex consists of 110 buildings and 11,237 apartments. In 1996, Met Life filed 10 applications to the DHCR for an increase in rent due to major capital improvements ("MCI"), which were the installation of new roofs at ten of the buildings. The DHCR granted the increases with the applications. The Tenants Association appealed by way of a PAR. The DHCR rejected the PAR because it did not include the required resolution by the Tenants Association authorizing the filing of the PAR by the association president, and including the Association's current membership list. Further, the defendants argued that the Association should have filed 10 separate PARs instead of a single PAR. The Association did not re-file A PAR or commence an Article 78 action. Instead it filed this federal lawsuit.

The tenants assert that the Association and Met Life have had an adversarial relationship and that many tenants believe that if their names were disclosed the landlord would take retaliation action against them for their membership in the Association. Met Life argued that of 82 past PARs filed by individuals none have resulted in any retaliatory or harassing action against those tenants. They also argued that disclosure of membership names is necessary in this context because the PAR has individual consequences for the individual tenants represented in the PAR, as the PAR results in a stay of the retroactive increase of rent for participating tenants and the landlord needs to know which tenants are thereby affected. DHCR argues that landlord tenant matters have traditionally been dealt with in state courts and the federal court should refrain from involvement. The Court, however, found no reason for abstention, such as if there was an ongoing pending case in the state court. The Court also rejected the argument that the tenants' action was moot because they didn't file an Article 78, pointing out that the tenants were not obliged to do so.

With respect to the disclosure issue, the Court agreed that there is nothing about the DHCR rule that requires the disclosure of individual member names unless individual relief is at issue. The Court, however, found that the tenants failed to show that there is any evidence of a substantial or significant infringement on their freedom of association. They failed to show a history of retaliation nor even a "common sense" practical likelihood of retaliation from the disclosure of membership in the Association or from disclosure of opposition to rent increases. The Court held that the tenants have introduced no evidence that presents "a reasonable probability" that the disclosure requirements will subject its members "to threats, harassment or reprisal from either government officials or private parties." Allegations of future harassment are purely speculative and insufficient to substantiate a substantial infringement on the right of association. The Court held that the disclosure requirement of association membership in the specific context of an association that pursues a PAR is necessary to accomplish compelling state interests and is narrowly tailored to accomplish those interests. Several of the compelling interests noted by the Court include (1) the fact that filing a PAR automatically stays the retroactive portion of the rent for the participating tenants, and DHCR needs to know who is participating in order to know which tenants are entitled to a freeze on the retroactive rent, and (2) there may exist individual relief and individual defenses to the PAR and thus, those individual apartments need to be identified. For these reasons, the Court dismissed the tenants' complaint.