Housing Court Decisions November 2000
Editors: Colleen F. McGuire, Esq., Chief Editor
Robert E. Sokolski, Esq., Catherine Grad, Esq. and David Weinraub, Esq.
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New York Law Journal, decisions for the week of November 27 to
December 1, 2000 (8 cases)
- Case Caption:
- 215-217 West 106 St. Realty Associates v. Franqui
- Issues/Legal Principles:
- Tenant's weekend visits with his girlfriend in New Jersey do not add up to a primary
residence there.
- Keywords:
- nonprimary residence
- Court:
- Civil Housing Court, New York County
- Judge:
- Hon. Peter Wendt
- Date:
- November 28, 2000
- Citation:
- NYLJ, page 26, col 4
- Referred Statutes:
- none cited
- Summary:
- Landlord brought a nonprimary residence proceeding against the rent controlled tenant
on grounds that he transferred his primary residence to New Jersey where his girlfriend lives.
Tenant admitted and testified at trial that he spent most weekends at her apartment, but that he
never moved in. His name is not even on her lease. He does pay for some of her utilities, but
the court noted that in a longterm relationship this is not unusual. He has a bank account in
New Jersey, but the ATM documentation indicate that he only uses it on weekends. The
landlord's witnesses, building employees, testified that they never saw the tenant during the
days, but this is consistent with tenant's testimony that he works during the days and on weekend
days he is at his girlfriend's apartment. Landlord also called a Con Edison employee and
another witness who gave testimony regarding the usage of the refrigerator, but their testimony
was ultimately speculative or inconclusive and therefore not dispositive of whether or not the
tenant resided in the apartment as his primary residence.
The tenant's witnesses included two people from the neighborhood who testified that they
saw him three to four times a week on a regular basis on the street the tenant lived on. All the
tenant's documentation, including tax returns and W-2's, list the apartment as his residence, and
even his New Jersey driver's license lists his New York apartment as his residence. The
landlord asked the court to draw a negative inference from the fact that the tenant's girlfriend
did not come to court to testify. The court, however, found the tenant's testimony credible that
his girlfriend had an unpleasant encounter with the landlord and refused to come to court. Based
on all the foregoing, the court determined that the tenant did indeed occupy the apartment as his
primary residence and dismissed the petition.
- Case Caption:
- Zorn v. Howe
- Issues/Legal Principles:
- Ithaca, New York ordinance allowing evictions for personal noncommercial usage of
drugs is upheld by the Appellate Division, Third Department and is not deemed to preempt state
law.
- Keywords:
- illegal usage; preemption
- Court:
- Appellate Division: Third Department
- Judge:
- lower court: Hon. Sherman
- Date:
- November 29, 2000
- Citation:
- NYLJ, page 25, col 4
- Referred Statutes:
- RPAPL 715; RPL 231(1); City of Ithaca Municipal Code, chapter 177,
- Summary:
- In 1998 the City of Ithaca passed an ordinance which allowed a landlord to evict a tenant
for using or possessing illegal drugs. The landlord brought a proceeding under this statute and
was given a judgment of possession. The tenant appealed and on appeal the City of Ithaca
intervened. The tenant lost on appeal and now appeals to the Appellate Division. The Appellate
Division affirmed the judgment of possession against the tenant.
The tenant argued that the Ithaca Law known as chapter 177 is preempted by State Law,
specifically RPAPL 715 and RPL 231, the statutes covering evictions for unlawful usage of an
apartment. Chapter 177 mirrors these two laws, but the main difference is that Chapter 177
expands the grounds for eviction to include illegal drug use and possession. The tenant
argued that the Legislature chose not to touch private noncommercial usage of drugs. The court
regarded this as a non-issue and saw the real issue as whether chapter 177 directly conflicts with
state law. The court stated that the mere fact that the Legislature chose to address illegal
business activity in RPAPL 715 in no way evidences an intent to preclude a municipality from
exercising its power by similarly addressing illegal private activities. It is only when the State
has indicated a desire or intent to occupy an entire field to the exclusion of local law that the city
is powerless to act. That is not the case here. Further, the tenant has failed to show how
chapter 177 expressly conflicts with any provision of State law. In order to satisfy the
inconsistency prong, it must be shown that the local law permits conduct prohibited by State law,
prohibits conduct specifically permitted by State law or imposes restrictions on rights granted
by the State. The court provided a host of examples from other cases to support the legal theory
that courts consistently uphold local laws that provide details of a topic on which State statutes
remain silent, where the local ordinance supplements, rather than supplants the State Legislation.
The court found that chapter 177 is consistent with the State statutory scheme of grounds
for eviction based on illegal activity. Use and possession of illegal drugs is an illegal activity.
The local ordinance merely supplements the State statute by adding additional grounds for
eviction. Chapter 177 is not inconsistent with RPAPL 715 because it does not impose additional
restrictions on rights granted by the State. Thus, the court concluded that chapter 177 is not
preempted by State law. The court also rejected the tenant's privacy arguments, holding that
"while people have a privacy interest in their homes, they have no corresponding right to violate
the law in the privacy of their homes. The court ruled: "Clearly [the tenant] has no legitimate
privacy interest in the possession or use of illegal drugs in his apartment."
- Notes:
- Generally, under State Law private noncommercial usage of drugs in one's own home
is insufficient grounds to cause the eviction of a tenant so long as no drugs are sold and the
usage is strictly personal. Tenants who do indulge in nonprescription drugs in the privacy of
their homes are not affected by this decision so long as they do not reside in Ithaca, New York
(or under the jurisdiction where chapter 177 applies).
- Case Caption:
- Barnes v. MRG Partners
- Issues/Legal Principles:
- Tenant restored to possession in illegal lock-out where landlord could not prove that
tenant intended to abandon the premises.
- Keywords:
- unlawful eviction; abandonment; mental disability; guardian ad litem
- Court:
- Civil Housing Court, New York County
- Judge:
- Hon. Schachner
- Date:
- November 29, 2000
- Citation:
- NYLJ, page 29, col 3
- Referred Statutes:
- RPAPL 713(10)
- Summary:
- The tenant brought an order to show cause on grounds that the landlord illegally evicted
him from his home at Holland House formerly known as Holland Hotel, a building whose
tenants have a history of homelessness and are recovering from various drugs, alcohol or mental
impairments. The landlord argued that the tenant abandoned the premises and further asked the
court that a guardian ad litem be appointed for the tenant and this was done. At trial, the
evidence indicated that the tenant refused to allow access into his room for several days prior
to April 19, 2000. On that day, the tenant was removed from the premises by the police and
fire marshals and was in an agitated state. His room was allegedly filled with debris. He was
hospitalized for some undisclosed period of time and eventually placed in a supportive care
facility in Kings County on June 22, 2000. He made two attempts in September to return to his
room but agents of the landlord prevented him from doing so. The tenant still has the keys to
his room.
The landlord's witness, a registered psychiatric nurse, through an affidavit alleges that
the tenant is "functionally disabled' due to "severe and persistent mental illness" and that the
tenant is "mentally incompetent to provide for his own interest in these matters." The court
concluded that the landlord's position is inconsistent. If the tenant suffers from the mental
disabilities claimed by the landlord, then the tenant certainly could not have the requisite intent
to abandon the premises (since an abandonment must be done knowingly). The court concluded
that the tenant did not intend to abandon the premises. Indeed, he was removed involuntarily
by the police in handcuffs. Further he never returned the keys, and was denied entry when he
tried to return to his home. The court concluded that although the tenant may suffer from a
mental illness and may be dangerous to himself or even the residents of the building, the
landlord must bring a proper court proceeding to evict him because there is no proof that the
tenant abandoned his home. The court restored the tenant to his apartment immediately.
- Case Caption:
- Chase v. Moncada
- Issues/Legal Principles:
- On technicality, landlords' owner occupancy proceeding is reinstated when it was
dismissed because neither landlord is a certified artist as required by the certificate of occupancy.
- Keywords:
- owner occupancy; certified artists
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Larry Schachner
- Date:
- November 30, 2000
- Citation:
- NYLJ, page 29, col 5
- Referred Statutes:
- RSC 3211(a)(1); CPLR 3211(a)
- Summary:
- Landlords brought an owner occupancy proceeding against the tenants. Tenants asked
the court to dismiss the petition on grounds that the certificate of occupancy requires that "at
least one resident of each dwelling unit must be an artist certified by the N.Y.C. Department
of Cultural Affairs." The lower court ruled that the landlords were not artists so certified and
therefore could not legally occupy the premises. The Appellate Division reversed and reinstated
the eviction proceeding on a technicality. The tenant brought the motion on the legal theory that
the landlords failed to state a cause of action. The Appellate Term noted that the motion was
not converted to a summary judgment motion, and thus the inquiry is whether the pleadings state
a cause of action and not whether there is evidentiary support for the petition. As such, the
landlords properly pleaded a cause of action sounding in owner occupancy. They are entitled
to a hearing on their cause of action. The Appellate Court noted that the certificate of
occupancy requires not that either of the landlords be a certified artist but rather that one of the
residents in the dwelling unit be a certified artist.
- Notes:
- Apparently the Appellate Term's decision means that the landlords must make a good
faith showing at trial that if and when they recover possession a certified artist will also live with
them. One would think that the nonrenewal notice is required to specify on its face the identity
of the artist who will supposedly live in the apartment. Since this notice presumably did not
contain this critical piece of information, it is peculiar why the Appellate Term did not uphold
the dismissal of the petition on this ground.
- Case Caption:
- Gerard v. Supreme Company
- Issues/Legal Principles:
- Landlord claims lack of knowledge of overcharge proceeding brought against prior
landlord, and hence was not liable for overcharges collected by the predecessor where landlord's
purchase of the property came from a judicial foreclosure sale, and no evidence indicates
collusion between the prior and current landlord.
- Keywords:
- rent overcharge; foreclosure
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon. Stanley Parness
- Date:
- November 30, 2000
- Citation:
- NYLJ, page 28, col 5
- Referred Statutes:
- RSC 2526.1(f)(2)
- Summary:
- Tenant's action to recover the rent overcharges collected by a prior landlord was
properly dismissed. The factors supporting the dismissal included the documentary evidence
establishing that defendant-landlord purchased the building at a judicial foreclosure sale,
defendant's representation that it had no notice of the overcharge proceeding at the time of the
purchase, and the fact that defendant immediately credited tenant for its portion of the
overcharges as soon as it learned of them. The court also ruled that the tenant failed to establish
a collusive relationship between the previous landlord and defendant such as would make the
judicial sale exemption to successor liability for rent overcharges inapplicable.
- Case Caption:
- Bedford Apartments Company v. Coutts
- Issues/Legal Principles:
- Petition which incorrectly described the owner as a partnership does not necessitate
dismissal of the petition.
- Keywords:
- jurisdiction; petition; partnership
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Thomas Fitzpatrick
- Date:
- November 30, 2000
- Citation:
- NYLJ, page 29, col 6
- Referred Statutes:
- RPAPL 721(1), 713
- Summary:
- The tenants entered into leases with the landlord Bedford Apartments Company, a trade
name of the trust formed under the will of the original title holder. The Appellate Term upheld
a lower court ruling that Bedford Apartments Company is authorized to maintain the holdover
eviction proceeding. The fact that the petition mistakenly listed the landlord as a partnership is
not a jurisdictional defect so as to cause the dismissal of the petition, since tenant could not have
reasonably been misled as to the owner's authority to commence the litigation.
- Case Caption:
- Torres v. Militana
- Issues/Legal Principles:
- Tenant is denied summary judgment on illegal lock-out proceeding where other tenants
submitted affidavits stating that he had been out of the apartment for six years, so a trial was
needed to determined these discrepancies.
- Keywords:
- illegal lock-out; abandonment
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Laurie Lau
- Date:
- November 30, 2000
- Citation:
- NYLJ, page 29, col 6
- Referred Statutes:
- RPAPL 713(10), 853
- Summary:
- Tenant brought an illegal lock-out proceeding seeking to be restored to possession and
sought treble damages as well. The Appellate Term affirmed the lower court's denial of tenant's
request for summary judgment (i.e., a trial on papers). The court noted that the record raises
triable issues as to whether the tenant abandoned the apartment. Numerous tenants submitted
affidavits stating that the tenant had been out of the apartment for six years and assigned his
lease to his girlfriend as a so-called "roommate." Yet she had left the apartment empty in 1999.
The case was sent back to Housing Court for a trial.
- Case Caption:
- Murray v. Morrison
- Issues/Legal Principles:
- Landlord's failure to serve tenant notice of the initial legal rent by certified mail means
the legal rent has still not been established, and landlord cannot maintain a nonpayment
proceeding until the legal rent is established.
- Keywords:
- Fair Market Rent Appeal; overcharges; rent registration statement; initial legal regulated
rent; service of notice
- Court:
- Civil Housing Court, Kings County
- Judge:
- Hon. Debra Thomas
- Date:
- November 29, 2000
- Citation:
- NYLJ, page 30, col 2
- Referred Statutes:
- RSC 2523.1, 2528.2(d), 2528.3, 2528.4; RSL 26-517(e)
- Summary:
- The tenant seeks to dismiss the nonpayment proceeding against him on grounds that the
legal regulated rent has not been established because the landlord failed to serve a notice of
Initial Rent Registration. The landlord seeks rent arrears in the amount of $46,474 with interest
from August 1, 1994, or rent for the past six years.
This case actually goes back to January 1994 when the landlord started a nonpayment
proceeding and the tenant argued that the landlord overcharged by $642 per month since no
Initial Rent Registration was ever filed for the apartment. Tenant's position was accepted by
Judge Rodriguez in reliance on, for example, DCHR records revealing that the apartment was
not registered until July 25, 1994, i.e., after the nonpayment proceeding had commenced. The
July 25, 1994 retroactive filing was for the 1990 apartment registration and alleged a monthly
rent of $600 as per a lease from December 15, 1989 to December 14, 1990. On December 14,
1990, the landlord filed a 1989 registration statement claiming that for the period from April
1989 the tenant was a Mr. Shaw. The landlord also claimed that the apartment had been
registered in 1987, but Judge Rodriguez found this allegation contrary to the DHCR records.
The landlord also alleged an Initial Rent Registration of January 10, 1991 with the tenant listed
as Ms. Burton but apparently this tenant did not reside in the apartment on that date.
The Rent Stabilization Code provides penalties for an owner's failure to properly and
timely comply with the initial or annual rent registration, including the ability to collect rent
increases. In finding that the landlord failed to comply with proper registration filings, Judge
Rodriguez set the legal rent at the last rent controlled rent of $75.20 per month and subsequently
found that the tenant suffered an overcharge of $25,058 and treble damages of $75,174. The
decision was appealed and the Appellate Term, Second Department reversed and ruled that the
legal regulated rent could not be established until after the tenant filed a Fair Market Rent
Appeal (i.e, meaning after the tenant is properly served the initial rent registration). Hence, the
tenant's rent overcharge claim did not lie because the legal regulated rent had not yet been
established.
In opposing tenant's motion, the landlord claims that she did file an Initial Apartment
Registration with the DHCR and on the same day she mailed a copy of same to Mr. Shaw, the
original tenant, albeit in care of the current tenant, Mr. Morrison. The landlord stated that the
notice was sent by a certificate of mailing, and argued that such mailing was all that was
required. The landlord also argued that the tenant waived his right to file a Fair Market Rent
Appeal because he failed to file within 90 days of the mailing. The landlord also argues that
the legal regulated rent is the lease rent of $642 per month. The court referred to the law that
notice of the intial legal registered rent must be by certified mail, not certificate of mailing.
Moreover, the landlord mailed the notice to the wrong apartment and not directly to tenant.
Since the landlord did not serve the notice by certified mail, even if the landlord properly
registered the premises, the legal rent has therefore not been established since the service of the
notice was not proper. Hence the tenant's 90-day period for filing a Fair Market Rent Appeal
has still not run, and therefore the court dismissed the nonpayment petition because the rent
demanded by the landlord is not the legal rent.
New York Law Journal, decisions for the week of November 20-24,
2000 (7 cases)
- Case Caption:
- 221 West 16th Realty LLC v. DHCR
- Issues/Legal Principles:
- Once building's low-interest federal mortgage was paid off and building was no longer
subject to federal program, the building's status became subject to the rent stabilization laws.
- Keywords:
- rent stabilization status; fair market rent
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon. Harold Tompkins
- Date:
- November 20, 2000
- Citation:
- NYLJ, page 23, col 4
- Referred Statutes:
- RSC 2520.11(c), 2521.1(1); RSL 26-513(a)
- Summary:
- Landlord had a federal low interest mortgage on its building and argued that when the
mortgage was paid off (or the program concluded) in 1987 that the building reverted to its pre-
mortgage rent controlled status. Since the rent controlled tenants already left, the landlord
claims it was therefore entitled to charge the new tenants a fair market rent. The DHCR,
however, ruled that upon the termination of the federal mortgage and the attendant low-income
housing program, the building became subject to rent stabilization. The Rent Stabilization Code
provides that the initial rent stabilized rent is "the rent charged to and paid by the tenant on the
date [the Federal] regulations end." The DHCR decision had to be challenged within 60 days
from the date the rent was set and the period had long since expired at the time the landlord
applied to DHCR for a building-wide rent restructuring.
- Case Caption:
- 446 Realty Co. b. Higbie
- Issues/Legal Principles:
- Exemption of building from rent stabilization based on substantial rehabilitation will not
be permitted where prior landlord engaged in intentional criminal destruction of the building and
harassment and current landlord had knowledge of this situation when it bought the building, and
further current landlord's renovations do not rise to the level of substantial rehabilitation.
- Keywords:
- substantial rehabilitation; harassment; rent stabilization status; certificate of occupancy
- Court:
- Civil Housing Court, New York County
- Judge:
- Hon. Douglas Hoffman
- Date:
- November 20, 2000
- Citation:
- NYLJ, page 28, col 3
- Referred Statutes:
- RSC 2205.1(b), 2206.5, 2523.1, 2528.2(d), 2528.3, 2525.5, 2526.2(c)(2), 2520.11(e),
2522.4(a)(2); Emergency Tenant Protection Act 5(a)(5) [a/k/a McKinney's Unconsolidated Laws
8625(a)(5)]; New York City Administrative Code 26-413, 26-513(b), 26-517(e), 26-516(a), 27-
198.2(d)(4)(a)(iii), 27-375(h), 27-371, 27-215, 27-214(a); Rent & Eviction Regulations 74(c);
Multiple Dwelling Law 301, 302; Penal Law 241.05
- Summary:
- The landlord commenced a nonpayment proceeding against a duplex apartment, newly
renovated for which there is no certificate of occupancy. The court faced a novel issue:
whether a building that is alleged to be substantially rehabilitated primarily to remedy conditions
created by the intentional destruction by the prior landlord of key portions of the buildings (three
buildings were involved in this case) as part of an admitted criminal conspiracy to harass tenants
into vacating the building may qualify for an exemption from the protections of the rent
stabilization laws and code.
This is an 8 unit building on West 19th Street which was, until 1981, fully occupied by
residential tenants. The prior landlord went on a "reign of terror" according to the DHCR to
empty the building of tenants. He installed prostitutes, drug addicts and goons who engaged in
nefarious activities to coerce the tenants to vacate. Thugs hired by the landlord used
sledgehammers to damage building systems and entrance doors to individual apartments. Fires
were set, apartments flooded, and property stolen. An 83-page indictment and conviction was
brought against the former landlord for his activities between October, 1981 and January, 1983.
In 1986 the prior owner pled guilty and received a substantial prison sentence. The DHCR
issued a 43 page decision finding a systematic pattern of harassment by the prior owner. DHCR
issued an order precluding any rent increase until the agency issued an order removing the
finding of harassment. The decision has not ben appeal nor modified. The damage to the
building was significant: windows, floors, boiler, pipes and electrical fixtures suffered major
damage. The current landlord purchased the building in 1987 as the prior landlord was on his
way to jail.
In early 1987, the new landlord reached an extensive written agreement with the
remaining tenants of the three buildings. The agreement contemplated significant repair of the
buildings and transfer of the tenants to the first three floors of 446 West 19th Street. The
agreement provided that the landlord would receive MCI (major capital improvements) increases
in rent for the repairs, but that the MCI increases would not take effect for 5 years. The
landlord made repairs, many of which were disputed at trial, added a fifth floor to the subject
building and combined the fifth floor with the two existing fourth floor apartments to make two
duplex apartments, one of which is the subject of this nonpayment trial. Landlord claimed that
its substantial rehabilitation removed the building from rent stabilization. The fourth floor
duplex (4A) was rented to the current tenant's predecessor and the "first rent" was set at $1,495
per month, far in excess of the prior monthly rent of $138.36. The current tenant paid $1,400
per month from November 1, 1994 through October 31, 1995. When the landlord attempted
to increase the rent to $1,675 per month (in excess of the increases permitted under the Rent
Stabilization Code), the tenant withheld rent on grounds that she is a rent stabilized tenant. The
landlord then brought a nonpayment proceeding.
The court undertook a discussion of "substantial rehabilitation," preliminarily noting that
neither the Rent Stabilization Law or Code expressly defines what work qualifies as substantial
rehabilitation. The DHCR has Operation Bulletin 95-2 which provides guidance on the agency's
criteria for substantial rehabilitation. To qualify under DHCR criteria, a landlord must
completely replace with new systems at least 75% of 17 building-wide and apartment systems,
including plumbing, heating, gas, electrical, windows, etc. The court, however, noted that it
is not bound by the DHCR's criteria because Operation Bulletin 95-2 arose out of a statutory
reading and analysis of the Emergency Tenant Protection Act which entails an accurate
interpretation of legislative intent (as opposed to understanding DHCR's internal operational
practices or evaluation of factual data). The court regarded Operation Bulletin 95-2 as
"instructive."
The court held that the substantial rehabilitation exemption from rent regulated housing
must be viewed in the context of the remedial purposes of the ETPA and RSL to expand
protections of the rent laws and prevent the exaction of unreasonable and oppressive rents.
Although the Appellate Division has ruled that the words substantial rehabilitation must be
accorded their commonly understood meaning, the Appellate Division has also stated that as an
exception to the remedial provisions of the RSL, the exemption must be strictly construed. (In
other words, garden variety renovations cannot be elevated to a substantial rehabilitation standard
so as to exempt a building from rent stabilization status). The court found that an exemption
is not intended to take buildings outside the purview of the rent regulatory laws for mere repairs,
even if substantial, but is intended as a financial incentive to landlords to truly rehabilitate a
building in order to create habitable apartments for residential use. The court did not regard the
renovations in the case at bar as comporting to the intent of the statute.
In a key sentence summarizing the court's conclusion of this situations, the court held:
"If a landlord could eliminate rent regulation through criminal conduct and wanton destruction
of building systems designed to expressly empty the building of regulated tenants to take
advantage of the real estate market and then claim exemption from rent regulation when the
destroyed systems are repaired, obviously enormously increasing the sale value of the building,
the beneficent purpose of this exemption would be turned on its head." The court further held:
"Intentional criminal conduct by a landlord specifically as part of a criminal conspiracy to empty
the building of its tenants and obtain the benefit of a favorable real estate market was not within
the Legislature's contemplation of the beneficent aspects of this legislation. Permitting an
exemption under such circumstances would contradict the policies underlying state and local anti-
harassment laws."
The court recognized that the current landlord did not destroy the building. Nonetheless,
the court concluded that the current landlord is bound by the acts of its predecessor. The court
cited an Appellate Division case which held that once a finding of harassment has been issued
in the form of an order against the landlord, with sanctions imposed, even an innocent
subsequent landlord must come forward with convincing evidence that the predicate for the
harassment order no longer exists, before the findings of harassment may be vacated and
sanctions lifted" and the sanctions are not lifted retroactively. The current landlord was aware
of its predecessor's past. The statute, the court noted, was not created to allow a windfall to
the old or present landlord where criminal destruction accounted for the need for substantial
rehabilitation. The court roundly rejected the landlord's position that the manner in which the
building's destruction occurred is irrelevant.
In any event, the court found that the landlord's repairs fell far short of substantial
rehabilitation. The landlord claimed that it spent two million dollars renovating the 3 buildings,
but was unable to allocate how much was spent on the building involved in this proceeding. No
contract was ever produced specifying the scope and cost of the work. Although the work was
done roughly 9-11 years ago, the court did not allow the landlord to use the lapse of time as an
excuse for its failure to produce documentation of the work claimed to have been done. The
contractor testified that there was a contract (now unable to be produced). Significantly, the
contractor is presently a principle of the corporate landlord. The court was of the opinion that
the contractor-landlord should have retained records if it was later down the road going to claim
exemption, since the documentation would have to back up an exemption claim. Additionally,
the court noted that had the landlord/contractor obtained all the necessary work permits and sign-
offs from government agencies, including a certificate of occupancy, there would have been
reliable verification of the scope and quality of work conducted. The landlord produced very
little documentation of the work it even claimed to have done.
The court believed landlord's testimony that he replaced the roof of the building in
conjunction with the creation of the new penthouse apartments (one of which is the unit subject
to the trial proceeding). The work was performed to enlarge apartments 4A and 4B to create
a first rental for these units and the court ruled that the landlord is entitled to a first rent on this
unit. The rent was raised from $138 to $1,495 even though there is an administrative finding
that the prior tenant vacated as a direct result of harassment. The court raised a serious public
policy issue: "whether it is appropriate to permit a landlord to piggyback work creating two new
top floor units to augment a claim for substantial rehabilitation of the building based upon
installation of a new roof that necessarily was changed when the top floor was added, creating
two new apartments with first rents, especially in the absence of documentary evidence or
credible testimony proving that the roof itself otherwise needed total replacement."
The court made findings of fact and determined those items that were actually renovated
or installed by the landlord and those that were not renovated or installed. The court concluded
that with the exception of the penthouse apartments, the repairs that were done came about due
to the landlord's agreement with the remaining tenants to do various work. This work, the
court found, could qualify for MCI rent increases, and indeed the parties' written agreement
contemplated that the landlord would receive MCIs for this very work. In sum, the court
concluded that the landlord's work did not rise to the level of substantial rehabilitation and
therefore the building was not exempted from rent stabilization. Additionally, the facts indicate
that several of the tenants paid for a significant portion of the repairs or improvements to their
apartments via credits from settlement of their claims for damages. The landlord should not be
able to include the costs of these repairs in its final tally of the total costs of the alleged
substantial rehabilitation.
Since the building is subject to rent stabilization, the court needed to consider how much
rent the tenant should have to pay. No certificate of occupancy was ever obtained after the
work was done, including the creation of the new penthouse units. The landlord's position is
that it didn't know it needed a certificate of occupancy until this case arose and that it had
performed all the work that was necessary in order to get a certificate of occupancy, and that
the Department of Buildings failed in its administrative duty to issue a certificate of occupancy.
The court faulted the landlord, "an experienced builder" for never bothering to ascertain if a
certificate of occupancy was issued or to ensure that the Buildings Department inspected and
signed off concerning the particular work performed. Had the landlord undertaken this process,
the court noted that more documentation would have been available to support the landlord's
claims as to what renovations were done to the building. Much of the work done in this
building occurred prior to any record of the issuance of any permit. A temporary certificate of
occupancy was issued in October, 1999. A Department of Buildings employee testified that had
a sign-off of the work existed, for example, the plumbing work, a certificate of occupancy could
have issued. (Most of the sign-offs were received). But no certificate could issue based on
expired permits and the landlord's permits had expired in 1989 and were not renewed. Also,
a certificate of occupancy could not issue if there were violations of record, and violations
existed even at the time of trial.
A certificate of occupancy is not required for buildings built before 1929, as this building
was, unless substantial alterations occurred, and such alterations did occur here with the creation
of the duplex apartments. Since landlord never obtained a certificate of occupancy, and the
court rejected landlord's contention that the Department of Buildings was at fault in failing to
issue a certificate, the court was required to examine the rent forfeiture provisions of the
Multiple Dwelling Law. The harsh penalties of 100% rent forfeiture for a landlord in the
absence of a certificate of occupancy where one is required will not be enforced unless there are
also conditions which adversely affect the habitability of the structure or render the tenent's
occupancy illegal. The court concluded that this landlord failed to take appropriate steps to have
inspections and sign-offs so that its work could properly be reviewed by the Department of
Buildings, especially where an additionally floor is created on a roof. On the other hand, most
of the branches of the Department of Buildings did sign off on work and a temporary certificate
of occupancy was ultimately issued. Since the Department may not issue a temporary certificate
of occupancy without inspecting the building, the court found that it appears that any
shortcomings in the construction did not warrant denial of a certificate of occupancy and
therefore the court would not invoke at this time the rent forfeiture provisions of the Multiple
Dwelling Law.
The court then set about to determine whether the tenant had overcharges. The court
cited case law for the principle that when a landlord creates an apartment in a space that was
previously non-residential the owner is entitled to charge the first tenant a free market rent which
is subject to a fair market rent appeal, although none has yet been filed. The tenant believes that
the prior tenant (the first rent tenant) paid $1200 per month, as opposed to $1495 as the landlord
claims, although neither party presented proof at trial as to what the first tenant paid. Since the
current tenant has the burden of proof to prove an overcharge, the court took the $1495 sum as
the starting point, and in that regard no overcharges occurred when the lawful guidelines
increases are considered. Once the landlord properly registers the apartment by filing an RR-1
registering the first rent, then the court can make a final calculation based upon the tenant's
overcharge claim. The belated registration will permit the landlord to prospectively charge the
full legal regulated rent for the apartment, defined as the first rent charged this tenant of $1400
per month, plus any lawful increases pursuant to the rent guidelines order. The landlord is not
permitted to retroactively collect rent increases. For the two months sought in the petition, if
the apartment is properly registered the landlord may collect rent based on the initial rent of
$1400 per month. The court gave the landlord 60 days to properly register the apartment.
- Notes:
- There are so few cases on substantial rehabilitation that it is a welcome to receive this
extremely lengthy case. On the other hand, since the multiple holdings of this case are tied to
the specific and unique facts of this case, seemingly the decision's applicability is limited.
- Case Caption:
- 3363 Sedwick LLC v. Medina
- Issues/Legal Principles:
- Tenant not entitled to a notice to cure in a proceeding based on chronic nonpayment of
rent.
- Keywords:
- chronic nonpayment; cure
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Anthony Fiorella
- Date:
- November 21, 2000
- Citation:
- NYLJ, page 26, col 1
- Referred Statutes:
- none cited
- Summary:
- The lower court dismissed the holdover petition based on chronic nonpayment of rent
on grounds that the landlord did not serve a predicate notice to cure. The Appellate Term
reversed, holding that a formal notice to cure was not necessary since the tenant's "cumulative
pattern" of chronic nonpayment "was incapable of cure within ten days."
- Notes:
- It seems as if the Appellate Term is saying that a tenant who chronically does not pay
the rent is not entitled to a notice to cure before a landlord seeks to evict the tenant on this
ground, nor apparently to a post-judgment cure period either. Be aware that if a tenant has valid
grounds for withholding rent, such as consistent warranty of habitability claims, then a
landlord's chronic nonpayment case may not hold water.
- Case Caption:
- Lencar Realty Co. v. Cuthbert
- Issues/Legal Principles:
- Tenant with warranty of habitability claims can recover an abatement for a period when
rent was nonetheless paid.
- Keywords:
- warranty of habitability; abatement; violations; stipulation
- Court:
- Civil Housing Court, Bronx County
- Judge:
- Hon. Brenda Spears
- Date:
- November 22, 2000
- Citation:
- NYLJ, page 33, col 3
- Referred Statutes:
- Real Property Law 235-b
- Summary:
- In this nonpayment proceeding the tenant counterclaimed for an abatement based on
landlord's breach of the warranty of habitability. In a prior nonpayment proceeding, the
landlord entered into a stipulation agreeing to make repairs, three of which included "C"
violations. Pursuant to the stipulation the tenant agreed to pay the rent, and she honored the
stipulation and in fact paid all the rent specified. Landlord, however, did not honor its
obligations under the stipulation which compelled tenant to again withhold rent (resulting in the
current nonpayment proceeding). The court noted that the very conditions cited in the prior
stipulation remain as outstanding violations, including new conditions, such as the gas cut off
in the unit and Con Edison placing a red tag due to a leak. The landlord contends that the
tenant's remedy was to restore the prior case to the calendar rather than begin withholding rent
again. The court rejected this position, holding that the tenant presented the court with a copy
of the prior agreement to show that the enumerated conditions are still outstanding. The
landlord also attempted to show that the tenant denied access to enable the landlord to make the
repairs. But the court noted that landlord's witnesses did not prove this point, and the super
actually seem to contradict this point by testifying to recalling discussions of access dates. The
court concluded, based on the tenant's evidence (including photographs), that tenant was
deprived 70% usage of the apartment for thirteen months and therefore the court awarded the
tenant a 70% abatement of rent amounting to $3,985.07. Even though the tenant only owes one
month's rent amounting to $470.29, the court ruled that the tenant can obtain a refund for rent
already paid. Most likely the tenant will deduct the $3,985.07 from her future rent. The court
ordered the landlord to correct the violations within thirty and ninety days.
- Case Caption:
- Dunbar Partners, LP v. Landon
- Issues/Legal Principles:
- Rent paid for tenant by public assistance which is an overcharge does not entitle tenant
to the recovery for rent overcharges she never paid.
- Keywords:
- overcharges
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon. Louis York
- Date:
- November 24, 2000
- Citation:
- NYLJ, page 28, col 3
- Referred Statutes:
- none cited
- Summary:
- DHCR rendered a decision that the tenant had been overcharged. Tenant obtained a
monetary judgment for the amount of the overcharge. The landlord brought an action in
Supreme Court to vacate the monetary judgment. On landlord's request, the court reduced the
amount of the judgment solely to the extent of tenant's outstanding rent arrears. On landlord's
appeal, the Appellate Division additionally reduced the judgment to the extent that any rent
payments not paid by the tenant personally, but rather paid by New York City Housing
Authority or Human Resources Administration (i.e., public assistance) should be reduced from
tenant's judgment because tenant did not pay the sums. Rather, the city agencies who paid the
rent should be entitled to the overcharge recovery. The Court ruled: "Clearly, rent payments
that defendant [tenant] did not make should not be returned to her."
- Case Caption:
- In Re West Village Associates v. DHCR
- Issues/Legal Principles:
- Landlord cannot submit new evidence on appeal in application for MCI rent increase
based on waterproofing and pointing where contractor's documentation is necessary in the initial
application stage.
- Keywords:
- MCI rent increases; waterproofing; pointing; new evidence
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon. Alice Schlesinger
- Date:
- November 24, 2000
- Citation:
- NYLJ, page 27, col 1
- Referred Statutes:
- RSC 2522.4(a)(2)(i)
- Summary:
- In 1993 the owner was granted an MCI rent increase primarily based on the installation
of windows but which also included repointing. In 1997, the owner filed an application for an
MCI increase based primarily on the installation of a new roof and the owner also checked the
box on the application indicating that "pointing/waterproofing" was one of the installations for
which the increase was sought. In 1998, the Rent Administrator granted the MCI rent increase
for the new roof but denied it for the pointing an waterproofing, indicating that the useful life
for theses items performed pursuant to the 1993 MCI had not yet expired. The owner filed a
PAR stating that the 1991 pointing and waterproofing related to the north side of the building
only while the work relative to the instant MCI application related to the other sides. The
landlord's PAR was denied with the explanation that pointing and waterproofing had already
been performed on the building of which an MCI rent increase was authorized in 1993. Further,
the owner's contractor did not even submit the requisite signed statement and the diagram of the
building complex indicating which exposed sides of the building were found to need pointing.
The landlord filed an Article 78 (i.e., appeal of the PAR) stating that the waterproofing
and pointing was distinct from the prior similar work on the north side of the building. The
landlord argued that the Rent Administrator never asked for additional documentation, nor reject
the application on that ground. Only on the Article 78 did the owner finally submit a
contractor's statement and building diagram, curing the defects cited in the denial of the PAR.
The Supreme Court judge thereupon sent the case back to the DHCR to review the belatedly
submitted documentation. The judge noted that her decision was motivated by "strong policy
grounds in favor of encouraging landlords to keep up the quality of housing stock to the benefit
of everybody."
The Appellate Division reversed and held that the lower court "based its determination
on an improper standard of review and improperly applied that standard to evidence which was
submitted for the first time in an Article 78 proceeding." Rather, an MCI application entails the
DHCR's expertise in evaluating factual data and the lower court should have deferred to the
agency. The landlord has the burden of proving entitlement to an MCI rent increase and if a
landlord does not submit the appropriate documentation to the Rent Administrator, then the
landlord should not be given second chances on appeal (either a PAR appeal or an Article 78).
Under DHCR procedure, a landlord must produce a contractor's statement that the contractor
inspected the premises before and after all the necessary work was performed, and a diagram
indicating the location of the work. The Rent Administrator reasonably denied the landlord's
application in the absence of the contractor's documents. The Appellate Division further found
that the DHCR is under no legal obligation to search its own records to determine if the landlord
had already received an MCI rent increase before for this or any other similar work.
Finally, the landlord challenged the DHCR's definition of what constitutes a "useful
life." The Appellate Division noted that the DHCR interprets this term as meaning "that the
useful life of pointing is not limited to the specific pointing done at the time the MCI increase
is granted but also to any subsequent pointing done at any location in the building within the
useful life of the original work." The Appellate Division did not regard this interpretation as
irrational because to qualify for na MCI rent increase for pointing and waterproofing , te owner
must prove that the work was necessary and comprehensive. If the owner's application is
approved, all the tenants' rents would increase, not just the rents of the tenants in the area where
the work was done. An MCI rent increase will be denied if the work is performed piecemeal
and not completed within a reasonable time. The Court noted that DHCR's position does not
force the owner to do unnecessary work because the owner can always apply for the waiver of
the useful life rule in the appropriate case.
- Case Caption:
- Lilu v. Musser
- Issues/Legal Principles:
- DHCR decision deregulating the building does not apply to specific apartment at issue
in this litigation, even though the building contains less than 6 units.
- Keywords:
- rent stabilization; garden apartment; collateral estoppel
- Court:
- Civil Housing Court, Queens County
- Judge:
- Hon. Ellis Sheila Franke
- Date:
- November 22, 2000
- Citation:
- NYLJ, page 36, col 1
- Referred Statutes:
- RSC 2520.11
- Summary:
- Landlord brought a holdover proceeding against the tenants, aged 86 and 82 years old,
who have lived in the apartment over 20 years. The apartment was built in 1949 as a garden
apartment development, a category of housing which was added to the new Rent Stabilization
Law when the RSL was enacted on May 6, 1969. The definition of a garden apartment was a
"multiple family garden-type maisonette dwelling complex containing six or more dwelling units
having common facilities such as sewer line, water main and heating plant and operated as a unit
under single ownership on May 6, 1969, notwithstanding that certificates of occupancy were
issued for portions thereof as one or two-family dwellings."
In the next ten years, some owners began modifying the garden units by eliminating
shared facilities like common heating plants and selling off individual units consistent with their
certificates of occupancy. In a 1983 decision (involving another case) the DHCR's predecessor
agency took the position that tenants previously part of a garden complex will not lose their rent
stabilization rights if the number of units in a building is reduced to less than 6 units (the
threshold for stabilization status). The board's opinion was appealed in an Article 78 proceeding
and subsequently affirmed by the Supreme Court. In 1986 four of the units in the subject
building were severed from the rest of the garden apartment and a certificate of occupancy was
issued to reflect this. The unit in litigation here was part of the severed four family building.
Before the new certificate of occupancy for the four-family premises was issued in 1986, the
tenant filed a rent overcharge complaint with the DHCR which rendered a decision in 1985
finding an overcharge occurred.
In 1989, the current owner purchased the subject premises and continued to register the
subject apartment (as did the prior owner) with DHCR and offered rent stabilized renewal leases
until July 31, 1999. Thereafter, the landlord refused to offer a renewal lease and instead filed
an application with DHCR to have the subject building declared exempt from rent stabilization
as it contained less than six units, or only four units. The tenants in the subject apartment
responded to this application by providing the DHCR with the crucial information that their
apartment was part of a garden apartment development that was subject to the Rent Stabilization
Law since 1969. In response, DHCR sent an inspector to the subject building who duly reported
that this was a four family building. As a result, DHCR issued an order deregulating the subject
building as it indeed contained less than six housing units. The senior citizen tenants did not file
a Petition for Administrative Review.
The Court stated that this decision was a product of the landlord's omission of significant
background facts. The Court further reasoned that in deregulating the subject apartment, DHCR
simply relied on its inspector's report and overlooked the history of the subject premises.
However, the Court correctly held that it does not have the power to collaterally attack a final
order of DHCR. However, the tenants' attorney argued that an interpretation of DHCR's
decision as deregulating the subject apartment would be in violation of the Rent Stabilization
Law as well as the applicable case law. The Court agreed with this argument and further
determined that although it may not collaterally attack DHCR's order, " [c]learly DHCR has the
power to modify or revoke its own final order where such order 'was the result of illegality,
irregularity in vital matters or fraud.'" Accordingly, the Court interpreted the DHCR
deregulation order as applicable to the subject building as opposed to the tenants' individual
apartment. As a result, the court granted the tenants' motion to dismiss the petition which
prevented the eviction of the tenants.
New York Law Journal, decisions for the week of
November 13-17, 2000 (6 cases)
- Case Caption:
- Haruvi v. Rosen
- Issues/Legal Principles:
- Landlord who loses owner occupancy proceeding, when thereafter
tendering a renewal lease, cannot make the commencement date of the renewal
lease retroactive.
- Keywords:
- owner occupancy; renewal lease
- Court:
- Civil Housing Court, New York County
- Judge:
- Hon. Peter Wendt
- Date:
- November 15, 2000
- Citation:
- NYLJ, page 28, col 3
- Referred Statutes:
- CPLR 3211, 3212; Rent Stabilization Code 2523.5; RPL 234
- Summary:
- Respondents entered possession of the subject apartment pursuant to a
written rent stabilized lease dated May 25, 1975 and have continued in possession
pursuant to lease renewals until landlord served them with a notice of
nonrenewal dated November 27, 1998, based upon owner occupancy. The last
executed renewal lease was dated December 31, 1996 and expired on March 31,
1999. Landlord's owner use proceeding was dismissed with prejudice on July 6,
1999. Subsequently, both parties entered into a stipulation to be bound by the
Appellate Termþs decision in a pending case with the same issue in controversy.
The Appellate Termþs decision affirmed the decision of the Civil Court in the
related case and effectively affirmed the dismissal with prejudice of landlordþs
ownerþs use proceeding. Therefore, landlord, having lost its owner use
proceeding was required to offer tenants a renewal lease.
In January 2000, landlord offered tenants a renewal lease with a term
commencing retroactively to April, 1999. Tenants declined to sign the lease with
an incorrect with a term commencing June 1, 2000. Based upon tenants failure
to execute the renewal lease, landlord served tenants with a notice to cure and
subsequently terminated their tenancy and commenced the within proceeding.
Tenants moved to dismiss the petition and landlord cross-moved for summary
judgment. The Court stated that the Rent Stabilization Code (RSC) 2523.5
governs the procedure for renewing rent stabilized leases and requires that
landlord notify tenant whose lease is expiring, whether or not there is an offer
or a refusal of a lease renewal within a specified period. Specifically not more
than 150 days and not less than 120 days prior to the end of the tenantþs lease
term. If a landlord fails to timely offer a renewal lease RSC 2523.5(c) provides
that, þ...the one/or two-year lease term selected by the tenant shall commence
at the tenantþs option, either (1) on the date a renewal lease would have
commenced had a timely offer been made, or (2) on the first rent payment date
occurring no less than 120 days after the date that the owner does offer the lease
to the tenant.þ The above language of RSC 2523.5(c) is mandatory and the
tenant may choose the date that a renewal lease shall commence according to the
statute.
In this case the tenants, upon receipt of the retroactive renewal lease in
January 2000 informed landlords by their attorneys that they chose to have their
renewal lease commence on June 1, 2000. The Courts have repeatedly upheld
prospective renewal leases in cases where landlords are late in offering renewal
leases, and the Appellate Division, First Department has adopted the general rule
used by the Conciliation and Appeals Board that renewal leases which are
untimely offered should begin prospectively. The Court also addressed the
language of a stipulation entered into by the parties and held that under the
terms of the partiesþ stipulation the landlord has no right to offer a retroactive
renewal lease in apparent disregard of RSC 2523.5(c). The landlords also
argued that the tenantsþ remedy is not to refuse to execute the untimely offered
lease but to execute it and return it with the correct dates of the tenantþs
choosing. The Court held that the tenants did in fact do this through their
attorney and are entitled to have the renewal lease commence on June 1, 2000.
Accordingly, landlordþs proceeding was dismissed with prejudice.
- Case Caption:
- Bromley Co. V. Levine
- Issues/Legal Principles:
- Tenant who deposited all rent owed with the court fails to make a claim
for laches (stale rent) since tenant cannot show prejudice (i.e., inability to pay
the rent).
- Keywords:
- stale rent, laches, warranty of habitability
- Court:
- Civil Housing Court, New York County
- Hon. Alpert
- Date:
- November 15, 2000
- Citation:
- NYLJ, page 24, col 4
- Referred Statutes:
- CPLR 3211, Multiple Dwelling Law 302-a
- Summary:
- Landlord brought nonpayment proceeding seeking to recover 17 months
of rent. Tenant asserted the affirmative defense of laches (a/k/a stale rent).
Landlord moved the Court to strike this defense and tenantþs counterclaim
seeking punitive damages for breach of the warranty of habitability. The parties
were involved in a prior nonpayment proceeding which was settled by þso
orderedþ stipulation dated May 6, 1999 which gave tenant a 100% abatement
through December 1998 and the parties reserved all claims and defenses as to
rent from January 1999 onward. The parties also agreed on a method whereby
landlord could obtain access to complete repairs. Landlordþs attorney claims that
tenant failed to provide landlord with access and moved under the prior index
number for an order directing tenant to grant access. The motion was granted
by order dated January 13, 2000 and landlord subsequently scraped and painted
the subject apartment. Promptly after completing the repairs landlord
commenced the nonpayment proceeding. Tenant claims he has always granted
reasonable access to landlord and that landlord failed for a number of years to
repair the leaks in the apartment and that the roof also needed to be repaired for
which the landlord did not need access to tenantþs apartment.
The Court held that the landlord failed to provide a reasonable excuse for
its delay of more than a year in commencing the nonpayment proceeding.
However, despite landlordþs unreasonable delay, tenant does not have a valid
laches defense. Landlord claims that tenant cannot show that he was in fact
prejudiced by the alleged delay. Tenant interposed a defense pursuant to
MDL302-a and in accordance with the statute had deposited all rent demanded
in the petition with the Commissioner of the Department of Finance. Landlord
alleged that there is no resultant prejudice to tenant since he does not even face
eviction because all the rent has been deposited.
The essential elements of laches are, þunreasonable and inexcusable delay
by the petitioner in undertaking to enforce its rights which result in prejudice to
the opposing party.þ One reason for the þstale rentþ defense is that landlords
in an attempt to evict deliberately delay in commencing a proceeding so that rent
builds up to an extravagant amount and the tenant is unable to pay. The tenant
has the burden of proving the landlordþs ulterior motive. In order for a tenant
to prevail on a claim of laches the tenant must show the delay resulted in actual
prejudice to him or caused him to change his position. Once the tenant has
satisfied the elements of laches the burden shifts to the landlord to provide a
reasonable excuse for the delay. The prejudice necessary is the possibility of a
tenantþs eviction due to an inability to pay the accumulated rent. In this case the
tenant does not face eviction and cannot establish the requisite prejudice, and the
Court dismissed the affirmative defense of laches.
With regard to punitive damages for breach of the warranty of habitability,
a tenant must allege facts indicating that the landlordþs conduct rose to the level
of moral culpability or criminal indifference to civil obligations. In this case
there were several disputed facts and the Court left the decision to a trier of fact
and set the case down for a trial on the issue of punitive damages.
- Case Caption:
- Mazda Realty Associates v. Green
- Issues/Legal Principles:
- Loft tenant who has not yet attained rent stabilization status is not
entitled to a 120-150 nonrenewal notice of lease when landlord sues for
nonprimary residency, but rather just a 30 day termination notice.
- Keywords:nonprimary residence; loft; nonrenewal
notice
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Schlomo S. Hagler
- Date:
- November 16, 2000
- Citation:
- NYLJ, page 28, col 3
- Referred Statutes:
- MDL286[3], 29 RCNY2-01[3][i], 29 RCNY2-01[i][1]
- Summary:
- The lower court ruled that a non-primary residence proceeding against
a protected occupant of an interim multiple dwelling unit was properly
commenced upon a 30 day notice of termination and that the landlord was not
required to serve a 120-150 day notice of nonrenewal. The Appellate Term, First
Department affirmed stating that because the transition from loft law coverage
to Rent Stabilization Law coverage had not yet been completed, tenant was not
a tenant under a rent stabilized lease. Therefore, landlord was not required to
serve a 120-150 day notice of nonrenewal.
The statutory scheme provides for an issuance of a final order issued by the
loft board setting the initial regulated rent after which, þeach residential
occupant qualified for protection pursuant to this article shall be offered a
residential lease subject to the provisions...set forth in the Emergency Tenant
Protection Act of 1974...þ In this case, the loft board has not issued a final rent
order with respect to tenantþs unit. Tenant's payment of permissible Rent
Guidelines Board increases during the transition did not create a rent stabilized
lease or term.
- Notes:
- Rent Stabilized tenants pay guidelines increases. So in this situation, the
tenant is paying the rent increases as if he were a rent stabilized tenant and
giving the landlord the benefit of that status, yet the tenant does not get the
benefit of the status that accrues to other stabilized tenants, which is the lengthy
120-150 day notice period.
- Case Caption:
- In Re Debra Spohnheimer v. N.Y.S. DHCR
- Issues/Legal Principles:
- Court denied tenant's application for interest, attorneyþs fees and treble
damages after she won a rent overcharge claim at the DHCR.
- Keywords:
- DHCR, rent overcharge
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon.Louis York
- Date:
- November 16, 2000
- Citation:
- NYLJ, page 26, col 6
- Referred Statutes:
- CPLR Article 78, RSL 26-512, 26-513, 26-516, RSC 2526.1
- Summary:
- Supreme Court denied tenant's application for attorneyþs fees, interest
and treble damages on her rent overcharge claim that she won at the DHCR.
(Usually DHCR does not on its own award legal fees to the winning party).
The Appellate Court affirmed stating that,þ DHCRþs determination to
process the tenantþs þrent overchargeþ complaint as a fair market rent appeal and
to adjust the legal regulated rent to the fair market rent and to direct the owner
to refund the excess rent but not to impose treble damages, interest and
attorneyþs fees was rationally based upon the record and in accordance with
applicable law.þ
- Case Caption:
- In Re Sherry House Associates v. NYS DHCR
- Issues/Legal Principles:
- Tenant's challenge of rent on new grounds of failure to file an initial
registration statement is rejected as untimely.
- Keywords:
- DHCR, rent overcharge, rollback assessment, initial rent registration
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon.Diane Lebedeff
- Date:
- November 16, 2000
- Citation:
- NYLJ, page 26, col 1
- Referred Statutes:
- 9 NYCRR 2521.1[b][1], RSL 26-516(a) 26-517
- Summary:
- Tenant moved into subject apartment in February 1987 under a 2 year
residential lease with rent at $1800/month. In January 1988 the tenant filed a
rent overcharge complaint alleging that the prior tenant, a group of professional
tenants, paid lower rent. Landlord responded that the prior tenant paid much
higher rent ($22,800). Tenant then submitted documents to show that prior
commercial use was illegal as contrary to the Certificate of Occupancy. Tenant
argued that prior illegal use could not be used as a basis for establishing his
lawful rent and that he should be entitled to a full rental history of the
apartment. The Rent Administrator denied the complaint holding that the prior
occupancy had been registered with DHCR as a commercial unity and that
current tenantþs initial legal regulated rent ($1800) was properly established in
accordance with the RSC.
The tenant filed a PAR in 1991 challenging the denial of his rent
overcharge complaint. Almost 4 years later tenant sought to supplement his
submission in the pending PAR by stating that RSC 2521.1(b) was inapplicable
because landlord never filed a valid (residential) registration with the DHCR. In
1996, DHCR rejected the supplemental submission as untimely and denied
tenantþs PAR ruling that the issue had been long joined before the Rent
Administrator and that included the commercial use of this apartment.
Tenant successfully challenged the ruling by Article 78 proceeding and
upon new hearing, DHCR again ruled that the legal regulated rent was that
agreed to in the 1987 vacancy lease. In a second Article 78 proceeding, tenantþs
new theory was based upon an allegedly invalid initial registration. In 1998
DHCR once again ruled that the initial rent established upon vacancy of the
professional occupancy in 1987 was $1800/month but now also held that because
the current tenant had never been served with a copy of the initial amended
(þRR-1") registration form, the rent had to be considered frozen at that rate of
$1800, retroactively, until landlord completed its registration requirements. This
rollback to 1987 resulted in an overcharge of $46,409.50, including $10,788.88
in interest. No treble damages were awarded.
In the current Article 78, the landlord is challenging DHCRþs latest ruling.
The Court dismissed landlordþs petition noting that the RSL required initial
registration of stabilized apartments and the timely filing if an þinitial or annual
rent registration statementþ and service of the þannual statementþ before a
landlord can collect rent in excess of the previously established legal regulates
rent. The Appellate Division stated that this reasoning is unpersuasive and
DHCRþs latest ruling þirrational.þ
The Court held that the tenant was served with annual rent registration
statements, including an initial statement from the commencement of tenantþs
lease indicating rent of $1800/month which was less than the previous tenant's
rent. The RSL does not require service of an initial registration statement on a
subsequent tenant. Additionally, the Court stated the matter was þlaid to restþ
4 years ago when DHCR rejected tenantþs untimely submission in this regard.
Judgment reversed and landlordþs petition to vacate and annul the rollback
determination granted.
- Case Caption:
- Federal National Mortgage Corp. V. Grossman
- Issues/Legal Principles:
- Tenant who fails to set forth in an affidavit why service of the legal
papers was not proper is not entitled to a traverse hearing (hearing that contests
service).
- Keywords:
- notice to quit, licensees/mortgagors
- Court:
- Civil Housing Court, Kings County
- Judge:
- Hon. Birnbaum
- Date:
- November 15, 2000
- Citation:
- NYLJ, page 31, col 3
- Referred Statutes:
- RPAPL 735(5), CPLR 3212, 3211, 90L-1502G)10)
- Summary:
- Petitioner-Owner brought holdover proceeding and Respondents-
occupants moved for summary judgment seeking to dismiss the petition on the
grounds that the notice to quit is both defective and improperly served. Landlord
cross-moved seeking to dismiss several of the tenantþs affirmative defenses.
Respondents allege that although they possess and occupy all rooms of the
subject building the notice to quit made no mention of the first floor and as such
was misleading and inaccurate. (Petitioner filed second holdover to recover
possession of the first floor). The Court stated that the failure to mention the
first floor is of no consequence to Petitionerþs right to obtain possession of the
dwelling units actually described in the notice to quit.
Respondents also allege that the notice to quit is contradictory in that it
fails to provide Respondents with adequate notice of the grounds upon which the
proceeding is based because it alleges that Respondents are both mortgagors as
well as licensees. The Court stated that no contradiction exists. Respondents
formerly held a mortgage on the subject premises but lost title for defaulting on
the payments and upon foreclosure and sale. Upon transfer to Petitioner, the
respondents ceased to be owners and became licensees. The notice to quit clearly
set forth petitionerþs interest in the premises and explains that respondentsþ
license was to be revoked upon expiration of the ten days as provided in the
notice.
Respondents allege that the notice is also defective given that it was signed
by attorney for petitioner. The Court stated that attorney for Petitioner had
authority pursuant to a limited power of attorney to act in the stead of the owner.
Additionally, a copy of the power of attorney was annexed to the notice of
petition and petition. Finally, Respondents allege improper service. The Court
stated that in order to raise an issue of fact regarding personal service, þthe party
contesting service must submit an affidavit or statement based upon personal
knowledge that he failed to receive the pleadings.þ The Court may not order a
traverse hearing (i.e., a hearing which challenges service) absent a sworn denial
of the receipt of process by the party contesting service (i.e., the tenant) setting
forth the reasons why service was improper. The tenant's papers did not annex
a sworn affidavit of someone with personal knowledge explaining why service
was allegedly not proper. Hence, the court did not allow a traverse hearing.
New York Law Journal, decisions for the week of November 6-10,
2000 (4 cases)
- Case Caption:
- 220 West 98 Realty LLC v. The New York Province of the Society of Jesus
- Issues/Legal Principles:
- Occupants of apartments of Not-for-Profit Corporate Tenant Jesuit Society are allowed
to remain in possession
- Keywords:
- rent stabilization status; corporate tenant; nonprimary residence
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Maria Milin
- Date:
- November 6, 2000
- Citation:
- NYLJ, page 24, col 6
- Referred Statutes:
- none cited
- Summary:
- The landlord brought a holdover proceeding against 16 rent stabilized apartments which
have been leased for approximately 30 years by the tenant The New York Province for the
Society of Jesus for the benefit of its West Side Jesuit Community members. The landlord's
position is that this type of corporate tenant is entitled to a renewal lease only "where the lease
specifies a particular individual as the occupant and no perpetual tenancy is possible." This
position is based on the holding of a case called the Manocherian case. In this case there is no
lease or renewal which designates any individual tenants other than NY Province. The lower
court held for the Jesuits and the Appellate Term affirmed, holding that ordinarily the landlord
would be entitled to a final judgment of possession as a matter of law. However, the Court
noted that the fact pattern in this proceeding is distinguishable.
The Court held that the landlord should be barred from raising the issue of nonprimary
residence since the same relief was sought in the context of a 1988 holdover proceeding where
the petition was dismissed on the ground that landlord had failed to raise a single factual issue
that the premises are not being used as primary residences by the Jesuit community or its
individual members. The landlord did not appeal this order, but rather agreed to recognize the
"present occupants" of 16 apartments whose occupants were identified in the settlement
agreement. The Court also noted that the fact that the settlement agreement in the prior case
affirmatively identifies individual occupants, it thus meets the Manocherian requirement as to
identifiable individuals in occupancy. Tenant claims that 15 of the original listed occupants
continue in possession, while landlord contends that there has been a change in occupancy in at
least 4 of the apartments. The Appellate Term remanded the case back to Civil Court to resolve
these competing claims as to who is no longer occupying one of the 16 apartments in accord
with the 1989 stipulation.
- Case Caption:
- Goldman v. LaFollette Corp.
- Issues/Legal Principles:
- Landlord's nonrenewal notice properly advised corporate tenant of nonprimary
residency allegations.
- Keywords:
- nonprimary residency; corporate tenant; nonrenewal notice
- Court:
- Appellate Term: First Department
- Judge:
- lower court: Hon. Howard Malatzky
- Date:
- November 7, 2000
- Citation:
- NYLJ, page 26, col 1
- Referred Statutes:
- none cited
- Summary:
- The Appellate Term affirmed the Civil Court's holding that the May, 1998 notice of
nonrenewal adequately apprised the corporate tenant of the facts supporting the landlord's
nonprimary residence claim by alleging, inter alia, that the only person designated as an
occupant of the apartment in the underlying lease agreement (a named individual) "does not use
the premises as his primary residence and that another individual [a named individual] has
occupied the premise for about 2 years." This constituted an adequate nonrenewal notice.
- Case Caption:
- 24-26 East 82nd Street Tenants Corp. v. Bell
- Issues/Legal Principles:
- The trial court found that the tenant ignored court orders and stipulations to clean the
excess cluttered apartment and gave the landlord judgment of possession.
- Keywords:
- nuisance
- Court:
- Appellate Term: First Department
- Judge:
- lower court: Hon. Laurie Lau
- Date:
- November 7, 2000
- Citation:
- NYLJ, page 26, col 1
- Referred Statutes:
- none cited
- Summary:
- The Appellate Term found that the tenant had a full and fair evidentiary hearing in a
nuisance proceeding based on excessive debris and garbage which apparently remained in the
apartment in violation of prior stipulations and court orders which directed the tenant to remedy
the condition. The Appellate Term affirmed the Civil Court's judgment in favor of the landlord,
holding that on this record the lower court "properly balanced the rights of the other tenants
whose health and safety were at risk" and declined to grant a further stay of the execution of the
warrant. According to the Appellate Term, the record indicated that the tenant demonstrated
a pattern of intransigence since the commencement of the holdover in December, 1997.
- Case Caption:
- Metropolitan Life Insurance Company v. Ruiz
- Issues/Legal Principles:
- Tenants' housing complex of 11,000 apartments was too big for landlord to have had
constructive notice of tenant's dog in the absence of tenant's failure to identify with specificity
landlord's agents or employees who allegedly knew of tenant's harboring of a dog.
- Keywords:
- pets; waiver; cure
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Faviola Soto
- Date:
- November 6, 2000
- Citation:
- NYLJ, page 24, col 6
- Referred Statutes:
- New York City Administrative Code 27-2009.1; RPAPL 753(4)
- Summary:
- In violation of tenant's lease, tenant harbored a dog in the apartment without the
landlord's permission. Civil Court dismissed the holdover petition upon finding that the lease
restriction was waived because landlord failed to commence summary proceedings within three
months from the time it learned that tenant was openly and notoriously harboring a dog. The
Appellate Term reversed, stating that the landlord or its agents should be charged with
knowledge of the animal from 1994, the date tenant acquired the small dog and allegedly began
walking it in and out of the building on a regular basis. The premises is part of a huge complex
of 11,000 apartments in 110 buildings and tenant's building is located at the outer edge of the
complex adjacent to a public street where she walked the dog. The building has no doorman
or resident superintendent. In a complex of this size, the Appellate Term ruled that tenant's
unsubstantiated assertion that certain unidentified security personnel, or members of the large
maintenance staff (employed by an independent agency) may have casually observed tenant with
her dog from time to time does not support a finding that the owner knew or should have known
of the dog's presence from the outset. The evidence shows that on January 9, 1999 a security
officer checking the building reported a dog barking in tenant's apartment. Landlord's case
administrator responsible for initiating holdover proceedings visited the apartment and confirmed
the presence of the dog. Landlord thereafter promptly enforced its rights, serving the necessary
predicate notices and commencing the holdover proceeding on March 8, 1999. Since tenant
failed to prove by a preponderance of the evidence that landlord waived the applicable no-pet
provision of the lease, the holdover petition should not have been dismissed, according to the
Appellate Term. The court stayed the warrant for ten days to allow the tenant an opportunity
to cure, which would entail removing the dog.
New York Law Journal, decisions for the week of October 30 - November 3, 2000
(0 cases)
No cases were reported this week
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