Housing Court Decisions May 2001
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 May 28 and June
1, 2001 (7 cases)
- Case Caption:
- Cecilia v. Irizarry
- Issues/Legal Principles:
- Prior tenants' agreement in court settlement that building is deregulated on grounds of
substantial rehabilitation is rejected by Appellate Term because no evidentiary determination was
ever had proving system-wide renovations were actually made; Tenant's overcharge claim is
not based on amount of rent paid four years prior to filing complaint, as the amended Code
provisions inconsistently require, but rather Appellate Term holds that the legal regulated rent
must be based on the rent registered four years prior to the last registered rent.
- Keywords:
- substantial rehabilitation; rent registration; overcharges; collateral estoppel
- Court:
- Appellate Term, 2nd and 11th Districts
- Judge:
- lower Court: Hon. G. Wright
- Date:
- May 24, 2001
- Citation:
- NYLJ, page 22, col 4
- Referred Statutes:
- Emergency Tenant Protection Act of 1974; Emergency Housing Rent Control Law
8584(4)(a); Administrative Code of the City of New York 26-504.3(b), 26-403; RSL 26-
511(c)(6), 26-512(e), 26-517(e), 26-516(g); RSC 2520.13; 1997 Rent Regulation Reform Act;
CPLR 213-a
- Summary:
- In 1985 a prior landlord brought holdover proceedings against all the tenants in the
building alleging that the building was exempt from rent stabilization on grounds of substantial
rehabilitation. The proceedings were settled by stipulation wherein the prior landlord agreed to
forego several months rent and give all the tenants four year leases at rent below the legal
registered rents in return for a waiver by all the tenants of their claims to rent stabilized status
and their acknowledgement that the building was decontrolled. In 1986, a new landlord
purchased the building. At the end of the tenants' lease terms in 1990, the landlord brought
holdover proceedings against these tenants. The tenants sought to set aside the prior settlement
stipulations, but the Housing Court denied their application holding that the stipulations
constituted a valid waiver of their rights. In the interim, a new tenant moved into the building
and in July, 1989 applied to the DHCR to compel the landlord to give her a lease. The landlord
opposed her complaint on grounds that the building was substantially rehabilitated and therefore
the landlord was not obliged to give a renewal lease to a non-rent stabilized tenant. The DHCR
held for the landlord by order dated 1995 on grounds that the 1985 court stipulation exempted
the building from DHCR jurisdiction.
The instant action involves another tenant who has sued the current landlord and the
prior landlord who purchased in 1986. The complaint alleges that the registered rent in 1984
was $260 per month, that no further registrations have been filed, that the tenant is subject to
rent stabilization and that the landlord has engaged in overcharging the tenant. The landlord
responded that the tenant is not entitled to rent stabilization coverage by virtue of the 1985 court
stipulation wherein those tenants agreed to decontrol status, the 1990 Housing Court decision
which denied tenants' efforts to vacate the 1985 stipulation, and the 1995 DHCR order. The
lower court granted the landlord summary judgment, but the Appellate Term reversed.
The Appellate Term held that at no time was there ever an evidentiary determination that
the building had indeed undergone a substantial rehabilitation which would otherwise decontrol
the rent stabilized units. Simply because the tenants in 1985 agreed to be destabilized did not
by itself deregulate the building. In fact, the current tenant's lawsuit included affidavits from
the prior tenants which indicated that very little rehabilitation work was undertaken. A new
certificate of occupancy was issued but this was only because a store in the building had been
converted into a residential unit. Otherwise, there was no evidence that the prior landlord had
replaced at least 75% of the building's systems (in accord with a DHCR policy statement). The
court held that the current tenant cannot be bound by a mere stipulation binding prior tenants
who conceded deregulated status. The current tenant was not a party to that stipulation. Had
there been an actual DHCR determination based on an inspection and evidence, then the current
tenant would of course be bound by such a ruling (as would all subsequent tenants). But in the
absence of any finding of fact by a court or the DHCR, and particularly where the evidence
seems to indicate to the contrary of any substantial rehabilitation undertaken, the landlord cannot
claim that the issue has already been litigated. In fact, the Appellate Term held that the 1985
stipulation was a "sham" in its representation that the premises were substantially rehabilitated.
Further, the single tenant's complaint to the DHCR cannot be binding on other tenants since no
building-wide order of exemption was ever made, nor again was their any evidentiary proof of
substantial rehabilitation.
With respect to the tenant's overcharge claim, the Appellate Term rejected the landlords'
argument that the claim was time barred by a four-year statute of limitations. After this
litigation was commenced, the owner belatedly filed rent registration statements for the years
1996 to 1999. The Court held that "for owners who fail to register, the legal regulated rent must
and can only be calculated as it would ordinarily be calculated, i.e., based on the last properly
registered rent and these owners must continue to maintain and produce rental records dating
from before the four-year period. The late filing of the registrations for the four years from
1996 to 1999 cannot operate to give [the landlords] the benefit of a legal regulated rent that is
based on the rent indicated in the annual registration statement filed four years prior to the most
recent registration statement."
The Court noted that the DHCR's amendment to the Rent Stabilization Code changed the
Code's definition of the term "legal regulated rent,"to be defined as the "rent charged on the
base date set forth in subdivision f of this section, plus any subsequent lawful increases and
adjustments [RSC 2520.6(e)]," and defines the "base date" as the "date four years prior to the
date of the filing of the complaint." The Court held that the amended Code definition is
"completely inconsistent" with the definition of "legal regulated rent"" which the Legislature has
provided in the Rent Stabilization Law, which is "the rent indicated in the annual registration
statement filed four years prior to the most recent registration statement . . .plus in each case
any subsequent lawful increases and adjustments." The Court noted that it is not fair to define
the legal regulated rent as whatever it may have been four years prior to when the tenant files
an overcharge complaint. Rather, it should be based on the filed registration statements.
Otherwise, observed the Court, owners who did not duly register are given benefits greater than
or equal to those given to duly registered owners (i.e., higher rents, unregistered).
The Court held that "it has been a cardinal rule of rent stabilization that the legal
regulated rent must be based on the registered rent, not on the charged rent." The Rent
Stabilization Law's definition of a legal regulated rent for the purposes of overcharge is based
on a registration scheme. In contrast, the drafters of the amended Code, in framing a definition
of legal regulated rent that is based on the charged rent, have clearly departed from the statutory
scheme. The Code provision is in such disharmony with the statute that it is designed to
implement that it cannot be followed. Thus, the Appellate Term ruled that it must continue to
hold that the legal regulated rent for owners of units that are not duly registered must be
calculated based on the last properly registered rent.
- Notes:
- This is a very significant case because the Appellate Term has declared that the new
Code amendments regarding "legal regulated rent" promulgated in December, 2000 by the
DHCR are "inconsistent" with the Rent Stabilization Law. This ruling provides fuel to the
lawsuit filed by legal aid lawyers challenging the legality of those amendments. Most of the
2000 amendments were disastrous to tenants' rights. Tenant advocates welcome this decision
which firmly rejects the position that whatever the rent was four years prior to the tenant's
complaint must be deemed the lawful rent, particularly if, as happened in this case, the rent was
never registered in the past four years and even longer (i.e., here, after 1984).
- Case Caption:
- Spaeda v. Bakirtjy
- Issues/Legal Principles:
- Tenant who obtained rent stabilized status one year after moving in due to landlord's
participation in J51 tax abatement program retains rent stabilized status after tax period expires
because landlord failed to notify tenant in each renewal lease the date of the expiration of the
J51 tax abatements.
- Keywords:
- J51 tax abatements; renewal leases
- Court:
- Appellate Term, First Department
- Judge:
- lower Court: Hon. Lucy Billings
- Date:
- May 29, 2001
- Citation:
- NYLJ, page 24, col 5
- Referred Statutes:
- RSL 26-504(c)
- Summary:
- The lower court dismissed a holdover petition for failure to properly plead the rent
stabilized status of the apartment, and the Appellate Term affirmed. The tenant moved into the
apartment in 1980 and became rent stabilized in 1981 because the landlord received tax benefits
under the J51 program. Although the tax benefit period expired in 1985, the tenant retains his
stabilized status nonetheless. This is because the landlord was required to notify the tenant in
each renewal lease the date the J51 benefits expire. Since the landlord did not include the
proper notice in the renewal leases, the tenant retained stabilization status. The court rejected
the landlord's argument that this provision of the law regarding renewal leases did not apply to
this tenant because his tenancy began as a market rent tenant, not a stabilized tenant. The court
held that once he became a stabilized tenant in 1981, he remained protected because the landlord
neglected to notify him of the expiration dates in each renewal lease.
- Case Caption:
- 14 Morningside Avenue v. Murray
- Issues/Legal Principles:
- Landlord should have been given a short adjournment by the trial judge to obtain a
proper multiple dwelling registration statement, rather than dismiss the case.
- Keywords:
- multiple dwelling registration statement
- Court:
- Appellate Term, First Department
- Judge:
- lower Court: Hon. Timmie Elsner
- Date:
- May 31, 2001
- Citation:
- NYLJ, page 19, col 2
- Referred Statutes:
- 22 NYCRR 208.42(g); NYC Administrative Code 27-2097(c)
- Summary:
- Landlord was required to prove that a currently effective registration statement was on
file for the multiple dwelling premises. Since a new registration must be filed annually, it was
not shown that the April 2, 1999 statement offered by landlord was "currently effective" on May
23, 2000, the date of trial. Rather than dismissing the proceeding without prejudice, as the
lower court did, the Appellate Term held that the landlord should have been afforded a
continuance of one half hour, as requested, to cure the defect by getting a proper registration
statement. Apparently, someone was on the way from HDP with a copy of the correct
statement.
- Case Caption:
- Missionary Sisters of the Sacred Heart, Ill. v. DHCR and Croseri
- Issues/Legal Principles:
- Tenant is not entitled to indefinite preferential rent where lease providing for a
preferential rent limits this concession to the term of the lease.
- Keywords:
- preferential rent; contracts
- Court:
- Appellate Division, First Department
- Judge:
- lower Court: Hon. Sheila Abdus-Salaam
- Date:
- May 29, 2001
- Citation:
- NYLJ, page 22, col 1
- Referred Statutes:
- RSC 2521.2(b); RSC 2520.6[f]; RSC 2520.6[g]; RSC 2510; RSC 2507.9
- Summary:
- The landlord entered into a two year rent stabilized lease with the tenant. The legal
rent was $1,448.14 but the tenant was given a preferential rent of $1,379.77. A rider to the
lease indicated that the preferential rent was given only for the two-year term and that the reason
stated was to do the "economically depressed market." At the end of the two years, the landlord
gave a renewal lease, again at a legal rent, but with a lower preferential rent given to the tenant,
and the parties executed an identical rider. A second renewal lease was tendered but it no longer
contained a preferential rent. The tenant refused to execute the renewal lease without this rent
concession. As a result the landlord commenced a DHCR proceeding seeking a determination
of whether the tenant could be charged the legal regulated rent, and the tenant likewise sought
a determination of what constituted the appropriate rent.
The DHCR ruled that the landlord cannot resume the legal rent until the tenant who has
been given the preferential rent moves out. The landlord appealed, and lost on a PAR, and lost
in an Article 78 appeal of the PAR. The Appellate Division, however, reversed and ruled that
the landlord was not bound to keep the rent at a preferential rent for the duration of this tenant's
tenancy. The Appellate Division interpreted the statute, Rent Stabilization Code 2521.2(b) as
not specifying when or whether the landlord may start charging the legal rent and stop offering
a preferential rent. The Court held that the statute was intended as guidance "in those situations
where no written agreement controls and/or where the rent concession is open ended or where
the tenant, and possibly the landlord also, are unaware the rent being charged is not the
maximum allowable." It was not intended, held the Court, to apply in situations where the
parties are aware that the rent charged could be higher but agree to a lower rent for a limited
period of time.
The Appellate Division reasoned that one purpose of the rent laws was to avoid unjust
and oppressive rents, and that an unlimited rent concession does not violate any public policy.
The Court analyzed this situation based on typical contract law, what the parties agreed to. The
Court held that it was very clear that the parties did not intend for an indefinite concession and
that the concession was specifically tied to economic conditions prevailing at the time the lease
was signed and the concession applied to that particular term of the lease. A dissenting judge
pointed to a Code statute which requires that leases be renewed on the same terms and
conditions as expiring leases. For this reason, the dissenting judge would have given the tenant
continued concessions for the duration of his tenancy.
- Case Caption:
- Hirsch v. Borowik
- Issues/Legal Principles:
- Tenant who formerly owned the building and registered her apartment as permanently
exempt on grounds of owner occupancy cannot now claim regulated status and overcharges.
- Keywords:
- overcharges, registration, owner occupancy
- Court:
- Civil Housing Court, New York County
- Judge:
- Hon. Hoffman
- Date:
- May 30, 2001
- Citation:
- NYLJ, page 18, col 6
- Referred Statutes:
- RPAPL 741; CPLR 406, 3211, 3212, 3025(b)
- Summary:
- In 1946 the current tenant bought the building and later moved into the apartment where
she currently resides. In 1984, as owner, she registered the apartment with the DHCR as
permanently exempt from rent regulation due to owner occupancy. The building was sold to the
current owner and the tenant negotiated a lifetime lease at a rent of $3,000 per month with
yearly increases in accord with rent stabilized increases. In 1998, the tenant commenced an
action in Supreme Court seeking a judgment that the apartment is subject to rent stabilization,
and made a claim of overcharges. The Supreme Court dismissed the complaint on grounds that
there was no current controversy since the parties were performing in accordance with their
rights and obligations under the contract of sale which established the tenant's lease terms. The
overcharge claim was dismissed without prejudice pending a DHCR determination on the rent
regulatory status of the apartment.
The landlord commenced a nonpayment proceeding against the tenant who had begun
withholding rent. The tenant made a motion asking that the petition be dismissed for failure to
"identify the state and local laws applicable to the subject premises." As such, the petition fails
to comply with RPAPL 741 requiring the factual basis on which the proceeding is brought.
Specifically, the tenant argues that the apartment is subject to rent stabilization.
The court ruled that the tenant herself registered the apartment as permanently exempt
on owner occupancy grounds. She lived in the apartment for many years and negotiated the
terms of her continued occupancy after the building was sold. In such instances, the court held
that she cannot now claim that the petition fails to properly describe the rent regulatory status
of the apartment. Second, under the terms of her life tenancy agreement, it was described as
a "vacancy lease," and the rent in excess of $2,000 per month established as a "first rent" would
deregulate the apartment under high rent vacancy decontrol laws. Third, the tenants seeks to
challenge the rent more than four years beyond the date when it was initially established. Even
if the apartment were subject to rent stabilization, the right to challenge the rent is not possible
beyond a four year period. Since the petition pleads a lawful rent, the tenant's request to
dismiss the petition was denied by the court.
- Case Caption:
- Alphonse Hotel Corp. v. Fusco
- Issues/Legal Principles:
- Landlord, not tenant, has burden of proof to prove the rental value of a hotel unit in
a case involving whether the hotel unit is subject to rent stabilization.
- Keywords:
- hotel; burden of proof
- Court:
- Appellate Term, First Department
- Judge:
- lower Court: Hon. Faviola Soto
- Date:
- May 30, 2001
- Citation:
- NYLJ, page 18, col 1
- Referred Statutes:
- 22 NYCRR 130-1.1; RSL 26-506(a)
- Summary:
- Landlord brought a nonpayment proceeding and the issue at trial was whether tenant's
hotel unit is subject to rent stabilization coverage. In presenting the issue to the jury, the trial
court framed the inquiry as whether the "rent charged"' for the unit was less than $350 per
month or $88 per week on May 31, 1968. The Appellate Term, however, ruled that this was
a misapprehension of the burden of proof regarding the coverage issue. The evidentiary burden
did not rest with the tenant to establish the rental value of the hotel unit on May 31, 1968, the
statutory base date. Yet, there was insufficient evidence to determine the rental value. The
Appellate Term held that there must be a new trial. The Appellate Term held that it is the
landlord who bears the burden of proof as to the rental value of the unit.
- Case Caption:
- Tursi v. Anderson
- Issues/Legal Principles:
- Prior DHCR proceeding involving wife's succession rights claim does not justify
dismissal of landlord's nonprimary residence case against tenant where tenant's primary
residence was not an issue before the DHCR.
- Keywords:
- collateral estoppel; nonprimary residence; waiver
- Court:
- Appellate Term, First Department
- Judge:
- lower Court: Hon. Peter M. Wendt
- Date:
- May 31, 2001
- Citation:
- NYLJ, page 19, col 4
- Referred Statutes:
- 9 NYCRR 2504.4(d); 2524.4(c)
- Summary:
- Landlord commenced a nonprimary residence proceeding against tenant in May, 2000.
The lower court granted tenant's motion to dismiss the petition on the doctrine of collateral
estoppel based on a prior DHCR order dated October, 1999 directing landlord to offer tenant's
wife a renewal lease. The court also found that the landlord's acceptance of the rent check after
the termination of the tenancy, but prior to the commencement of the proceeding, vitiated the
termination notice. The Appellate Term reversed.
DHCR issued its order in response to a "lease violation complaint" in a proceeding
commenced by tenant's (now former) wife asserting succession rights. The issue of tenant's
nonprimary residence was not raised or decided and he conceded that he had surrendered the
apartment. Since it was not demonstrated that nonprimary residence issues relating to tenant
and/or his wife were litigated or necessarily decided at the DHCR, the Appellate Term held that
the landlord had a full and fair opportunity to litigate those matters in Housing Court.
Therefore, it was improper of the lower court to dismiss the proceeding on collateral estoppel
grounds. Further, the Court held that the landlord did not waive a right to maintain the holdover
proceeding by an inadvertent "acceptance" of rent. Tenant sent a combined check for May and
June, 2000 rent after the April 30, 2000 termination date and prior to the May, 2000
commencement of the proceeding, but the landlord returned the check uncashed, and relatively
quickly (about three weeks later).
New York Law Journal, decisions for the week of May 21-25, 2001
(6 cases)
- Case Caption:
- Lex 33 Associates v. Grasso
- Issues/Legal Principles:
- Housing Court lacks jurisdiction to declare a "sweetheart lease" a nullity.
- Keywords:
- sweetheart lease; jurisdiction
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon. Lorraine Miller
- Date:
- May 21, 2001
- Citation:
- NYLJ, page 23, col 4
- Referred Statutes:
- CPLR 212-a, 3001
- Summary:
- The lower court granted the defendant-tenant's request to transfer this Supreme Court
case to the Housing Court. Appellate Division reversed. The action involves landlord's lawsuit
for a declaratory judgment nullifying the nine-year old "sweetheart lease" initially granted to
the tenant in 1990 by the prior owner (who happened to be the tenant's father). The current
owner refused to renew the rent stabilized lease when it expired, and instead brought this
eviction proceeding in Supreme Court and sought fair market rent of the apartment from the
inception of the tenancy. The Appellate Division held that although Civil Court is generally
preferable for landlord-tenant disputes, it was inappropriate to do so here because Housing Court
cannot declare the lease a nullity, only Supreme Court can do that. Therefore, the lower
court's transfer order was reversed.
- Case Caption:
- In Re Application of Firstmark Development Co. v. DHCR
- Issues/Legal Principles:
- DHCR is required to investigate circumstances of agreement wherein tenant allegedly
waived his overcharge rights.
- Keywords:
- stipulation; waiver; overcharges
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon Emily Goodman
- Date:
- May 21, 2001
- Citation:
- NYLJ, page 24, col 1
- Referred Statutes:
- NYCRR 2526.1, 2520.13
- Summary:
- Tenant moved into a rent stabilized apartment in 1996 as a month to month tenant
without a written lease, and the initial rent was $1700 per month. In 1997 the landlord raised
the rent to $1900 per month. Tenant filed a rent overcharge complaint with the DHCR in
February, 1998 which resulted in a DHCR order that tenant was overcharged by $2,200 and
$6,600 as treble damages. The landlord filed an appeal known as a PAR and claimed that there
was a stipulation between her and the tenant dated March 10, 1998 wherein he agreed to
withdraw his DHCR complaint, and claiming that she never received the agency's requests to
her to respond to the complaint. The tenant argued that the agreement never went into effect.
The agreement the parties signed provided that he would move out of his apartment, and
move into Apartment 5A/5B, units which the landlord intended to combine, and which would
be an unregulated apartment. The agreement provided that the tenant would withdraw his
DHCR overcharge complaint with prejudice and would not commence any claim based on any
DHCR order. In April, 1998, the tenant moved into the unit, signed a three-year lease whose
rent was $2,200 per month. Tenant received the DHCR order and sought to off-set the award
against rent due the landlord. DHCR ruled on the PAR that, pursuant to the Rent Stabilization
Code, an agreement by the tenant to waive the benefit of any provision of the Code is void,
unless DHCR or a court approved the settlement. Since the DHCR nor a court approved the
settlement, then the tenant is entitled to withdraw the complaint despite signing an agreement
to the contrary.
At some point a new owner purchased the building and appealed the DHCR order all the
way to the Appellate Division, who reversed the order. The Court held that the agreement did
go into effect, despite DHCR's finding to the contraryþa finding, noted by the Court, that
DHCR made no effort to investigate. The Court held that it was not unreasonable of the prior
owner to believe that the tenant would (a) withdraw his complaint after they had settled, and (b)
file a copy of the settlement with the DHCR of his withdrawal. The Court also found that the
landlord did not have a "reasonable opportunity to be heard" because she never received copies
of DHCR notices requesting information from her on the overcharge complaint. The record
indicates that she was traveling in Italy during these times and the tenant was picking up her
mail. The Court ruled that since she did not receive the notices, she should be given an
opportunity to refute them at the DHCR.
- Case Caption:
- Armed Realty Co. v. Lomonaco
- Issues/Legal Principles:
- Landlord failed to establish unlawful sublet case against tenant, as court found that
additional occupant was tenant's roommate.
- Keywords:
- sublets; roommates
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Jerald Klein
- Date:
- May 22, 2001
- Citation:
- NYLJ, page 18, col 1
- Referred Statutes:
- RPL 235-f
- Summary:
- The landlord lost an alleged unlawful sublet proceeding brought against the tenant and
appealed to the Appellate Term. The appellate court upheld the decision, stating that the
landlord failed to establish by preponderant evidence that tenant unlawfully sublet the apartment
without landlord's consent. The proof at trial included evidence of rent sharing and tenant's
prior written notice to landlord that he had accepted the roommate. Building personnel testified
as to tenant's diminished presence in the premises, but this merely raised issues of fact for the
trial court to resolve. The trial court expressly credited the testimony of the tenant and the
roommate as to their occupancy agreement and the appellate court refused to substitute its
judgment for the lower court's findings of fact.
- Case Caption:
- Korean American Association of Greater New York v. Katsukawa
- Issues/Legal Principles:
- Landlord who is aware of and permitted tenant to convert the premises located in a loft
building from a commercial to residential apartment must give tenant a rent stabilized lease.
- Keywords:
- rent stabilization status, commercial usage
- Court:
- Civil Court, New York County
- Judge:
- Hon. Saralee Evans
- Date:
- May 23, 2001
- Citation:
- NYLJ, page 20, col 2
- Referred Statutes:
- CPLR 3211(a)(7)
- Summary:
- The landlord brought a commercial holdover proceeding on grounds that tenant's written
lease had expired and she was a mere month to month tenant. The building in which she resides
is a loft building and the tenant argues that she is subject to the rent stabilization laws. The
landlord recognized that part of the building, but not tenant's apartment, is subject to the Loft
Law, and that tenant's unit was not used residentially during the Loft Law window period. The
parties acknowledge that tenant employs a mixed usage of the apartment (commercial and
residential).
In 1995 the tenant and a co-tenant leased the space as an art studio for one year and the
lease specified that living in the premises was not allowed. In 1999, the tenant in this case
signed a separate one year lease for her portion of the loft which was partitioned after she and
the other co-tenant signed the original lease. The words pertaining to exclusive commercial use
did not appear on her own lease. The two tenants made numerous renovations of a residential
nature to the space which the tenants claim the landlords observed on various occasions. They
testified that before the initial lease was signed they told the landlord that they intended to live
in the loft and he responded by asking them not to reveal their intention to his lawyer when they
signed the lease, a claim the landlord denied. The landlords testified that the space did not look
lived-in. Although the landlord acknowledged visiting the premises to take Japanese language
lessons from the tenant, he did not recall seeing a couch or kitchen, nor was he aware any
sleeping took place in the premises. Photographs in evidence indicate that the tenant clearly
lives in the space.
The issue before the court was whether the landlord was aware of and permitted the
residential use. The evidence boiled down to whose testimony was more credible. The court
sided with the tenant, enumerating all the evidence, including the landlord's response to tenant's
letter regarding tenant's installation of a washing machine. Unrebutted testimony also indicates
that the tenant requested permission to use the elevator to move her bed in and the elevator was
provided for this purpose. Since the testimony and evidence indicates that this landlord was
aware that the tenant intended to use and did in fact convert the premises from commercial to
residential usage, the landlord is obligated to provide the tenant a rent stabilized lease. The
court granted the tenant attorney's fees as the prevailing party.
- Case Caption:
- Skeeter v. Clark
- Issues/Legal Principles:
- Landlord who has knowledge of prime tenant's unlawful sublet and overcharging the
subtenant is deemed complicit in an illusory prime tenancy scheme, even though landlord does
not benefit off the scheme.
- Keywords:
- sublet; illusory prime tenant; overcharges
- Court:
- Civil Housing Court
- Judge:
- Hon. Lawrence Schachner
- Date:
- May 23, 2001
- Citation:
- NYLJ, page 20, col 3
- Referred Statutes:
- none cited
- Summary:
- Landlord brought a licensee proceeding against the occupant of the apartment who
responded that she was not a licensee, but rather was the real tenant of record. She argued that
the prime tenants were illusory tenants. The court held a trial wherein it was determined that
the prime tenant did not occupy the apartment as her primary residence and she charged the so-
called subtenant an excess rent above the lawful rent. The judge held that the credible evidence
indicated that the landlord was well aware of the sublet and the overcharge. The subtenant told
the landlord of all this and the mailbox label was changed to the subtenant's name. Despite all
this knowledge, the landlord failed to bring an illegal sublet action against the prime tenant.
Even though the landlord did not benefit from the sublease arrangement (i.e., receive any of the
excess rent), this is not a requirement to a finding of an illusory tenancy.
- Case Caption:
- Hampares v. DHCR
- Issues/Legal Principles:
- Tenant did not waiver overcharge claim pending before DHCR in settling Housing Court
litigation.
- Keywords:
- overcharges; stipulation
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon. William McCooe
- Date:
- May 24, 2001
- Citation:
- NYLJ, page 20, col 4
- Referred Statutes:
- none cited
- Summary:
- The landlord appealed the DHCR's award of overcharges to the tenant all the way to
the Appellate Division. The Appellate Division affirmed the DHCR's decision. The landlord
and tenant entered into a stipulation of settlement in Housing Court. The stipulation did not state
that the tenant would withdraw her pending DHCR complaint. There was no indication in the
stipulation that the rent was being set pursuant to the Rent Stabilization Code. The stipulation
provided that the tenant was granted an offset of rent based on an alleged overcharge and this
provision, the Appellate Division ruled, cannot be construed as a judicial finding that the rent
set in the stipulation was the legal rent. Instead, the DHCR's order set the legal rent.
New York Law Journal, decisions for the week of May 14-18, 2001
(10 cases)
- Case Caption:
- Norotsky v. Katz
- Issues/Legal Principles:
- One owner of a joint ownership was not permitted to terminate tenancy when other
owner gave tenants a lease.
- Keywords:
- tenants in common
- Court:
- Appellate Term, 2nd & 11th Judicial Districts
- Judge:
- lower court: Hon. Ronni Birnbaum
- Date:
- May 15, 2001
- Citation:
- NYLJ, page 20, col 2
- Referred Statutes:
- none cited
- Summary:
- Landlord brought a holdover proceeding to recover the upstairs apartment in a building
owned by the petitioners as tenants in common (a form of joint ownership). The 30 day notice
of termination and petition were signed by one of the owners purportedly on behalf of all three
tenants in common. After service of the notice, another one of the owners served a notice
"revoking" the 30-day notice of termination and instead he executed a two-year lease with the
tenants who are this owner's father and uncle. The Housing Court ruled that the owner who
signed the 30 day notice was not entitled to oust the tenants and take sole possession. The
Appellate Term upheld.
- Case Caption:
- Board of Managers of the Low and Mid Rise Section of the Lincoln Square
Condominium v. Errico
- Issues/Legal Principles:
- Condominium board is not allowed to initiate summary proceeding against tenant on
behalf of the unit owner where power of attorney from unit owner does not specify that board
may initiate summary proceeding on behalf of the owner.
- Keywords:
- pets; condominiums; power of attorney
- Court:
- Civil Housing Court, New York County
- Judge:
- Hon. Maria Milin
- Date:
- May 16, 2001
- Citation:
- NYLJ, page 18, col 5
- Referred Statutes:
- CPLR 3211(a)(3); RPAPL 721
- Summary:
- The board of managers of a condominium acting on behalf of the unit's owner brought
a holdover proceeding against tenant on grounds that tenant is harboring a dog in violation of
the lease. The tenant argued that RPAPL 721 does not allow a condo board to commence a
summary proceeding. The board, however, argues that the unit owner authorized it to bring the
proceeding and the by-laws also authorize such a proceeding. Further, the unit owners gave the
board a power of attorney. The court reviewed prior case law on this and found that a prior
judge did not allow the condo board to proceed against the tenant in lieu of the unit owner. The
landlord, however, said the difference here is that a power of attorney was signed. The court,
however, pointed out that this power of attorney from the unit owner to the condo board does
not specify that the board may initiate summary proceedings. Hence the court dismissed the
proceeding.
- Case Caption:
- Rosen v. Chavis
- Issues/Legal Principles:
- Tenant who failed to show reasonable excuse for why she failed to appear for trial is not
permitted to vacate the default judgment
- Keywords:
- default judgment; reasonable excuse
- Court:
- Civil Housing Court, Richmond County
- Judge:
- Hon. Kenneth Bedford
- Date:
- May 16, 2001
- Citation:
- NYLJ, page 21, col 4
- Referred Statutes:
- CPLR 5015(a)(2) & 317
- Summary:
- In this nonpayment proceeding, a traverse was held and the tenant lost. (A traverse is
a hearing where the tenant challenges service of the legal papers. The court set the matter down
for a trial date and the trial was adjourned on tenant's request. On the adjourned date the tenant
failed to appear and the landlord was given a default judgment. Tenant then sought an order to
show cause to vacate the judgment. In order to vacate a default judgment, the party must show
a reasonable excuse and a meritorious defense. The reasonable excuse alleged by this tenant was
that she was at the Appellate Term waiting for a decision (presumably to appeal the denial of
the traverse) when the default was entered. The court, however, did not find it reasonable that
the tenant chose to go to the Appellate Term rather than appear for trial. The court concluded
that she "willfully caused her own default." Further, the court noted that the tenant waited 22
days before applying for an order to show cause. Absent a reasonable excuse, the court refused
to grant the tenant's motion to vacate the default.
- Case Caption:
- Pickman Realty Corp. v. DHCR
- Issues/Legal Principles:
- Landlord will not receive an MCI rent increase if windows are defectively installed.
- Keywords:
- MCI
- Court:
- Supreme Court, Queens County
- Judge:
- Hon. Polizzi
- Date:
- May 16, 2001
- Citation:
- NYLJ, page 20, col 6
- Referred Statutes:
- 9 NYCRR 2522.4(a)(2)
- Summary:
- There are 73 rent stabilized tenants in this 98-unit building which went co-op. The
managing agent filed an MCI application with the DHCR based upon installation of 1,337
windows at a cost of $505,951. 51 tenants responded to the application, as well as the tenants
association. The Rent Administrator granted an MCI increase of $4.72 per room. Due to a 12
year real property tax abatement, the actual amount of the rent increase was limited to $3.72 per
room for the life of the abatement. A DHCR inspector found that 11 windows were defective
and therefore exempt from the rent increase until such time as the owner corrected these
problems. Three tenants filed an appeal (PAR), as well as a tenant on behalf of the tenant's
association, but the Commissioner denied their appeals. In an Article 78 proceeding, the
Supreme Court judge remanded the matter back to the DHCR finding that the agency had
conducted too small a sampling of apartments in its window inspection.
The DHCR then scheduled inspections of 64 apartments, 20 of which were not inspected
as no access was obtained. Of the 43 units inspected, 37 windows had some kind of defect.
The landlord argued that it was not fair that the second inspection occurred roughly 6-7 years
after the windows were installed. The Commissioner revoked the Rent Administrator's prior
order which had granted the MCI increase basically on grounds that the work was not done in
a workmanlike manner. This prompted the landlord to appeal in an Article 78 to the Supreme
Court, but the court found that a substantial portion of the new windows were defectively
installed and therefore their installation did not constitute an improvement to the building to
justify an MCI rent increase.
- Case Caption:
- 81-41 Pasqua Realty LLC v. Ervolino
- Issues/Legal Principles:
- Occupant who remains in possession pursuant to a settlement agreement which
incorporates the overlease remains bound to the terms of the overlease even after the settlement
period expires, so that the jury waiver clause of the overlease remains in effect.
- Keywords:
- tenancy; jury waiver clause
- Court:
- Civil Court, New York County
- Judge:
- Hon. Rakower
- Date:
- May 16, 2001
- Citation:
- NYLJ, page 18, col 5
- Referred Statutes:
- CPLR 2219(a); RPL 232-c
- Summary:
- The current resident of the apartment used to be the undertenant. He obtained a right
to reside in the apartment as a result of a stipulation of settlement between the landlord, the
overtenant and himself, the undertenant. The settlement agreement apparently incorporated the
terms of the overlease which contained a jury waiver clause. For reasons not clear, the landlord
has now brought the former undertenant to court to evict him. The undertenant, however,
claims that he was not a signatory nor party to the lease so he should not be bound by the jury
waiver clause, and that the stipulation only bound him to the terms of the overlease prior to
December 31, 1999, not thereafter. The court disagreed, finding that the terms of the lease
continued after the stipulation expired because no other agreement was entered into between the
landlord and the undertenant; hence their relationship continued on the same terms and
conditions as during the stipulationþwhich is to say, subject to the lease and its jury waiver
clause.
- Case Caption:
- United Tenants Association, Mutual Housing Association HDFC v. Price
- Issues/Legal Principles:
- Remaining family member of tenant in an HDFC building must apply directly to the city
Department of Housing Preservation and Development (DHPD) for succession rights claim
within thirty days, as Housing Court does not have primary jurisdiction over such a claim.
- Keywords:
- succession rights
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Arlene Hahn
- Date:
- May 18, 2001
- Citation:
- NYLJ, page 18, col 1
- Referred Statutes:
- CPLR 2221(e); 28 RCNY 24-07 & 24-09
- Summary:
- The occupant made a belated succession rights claim, but this is a building subject to
the supervision of the Department of Housing Preservation and Development (DHPD). In that
regard the occupant must apply to DHPD within 30 days after the tenant of record permanently
vacates since DHPD has primary jurisdiction on a succession rights application, not the Housing
Court. (This building appears to be either a TIL building or a low-income cooperative already
converted).
- Case Caption:
- Mickenberg v. Gabriellini
- Issues/Legal Principles:
- Tenant's request to sublet on grounds that he was going to graduate school for two years
in Florida was unreasonably withheld by landlord, and tenant's removal of some household
furnishings was not an indicator that tenant did not intend to return at the expiration of the
sublease.
- Keywords:
- sublet; overcharge
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Peter Wendt
- Date:
- May 18, 2001
- Citation:
- NYLJ, page 18, col 1
- Referred Statutes:
- RPL 226-b; RSC 2525.6(b)
- Summary:
- Tenant sought to sublease the apartment on grounds that he was attending a two-year
graduate study program at a Florida university and he intended to return to New York City to
continue his studies at the Albert Ellis Institute. At that time tenant had resided in the apartment
for 12 years. Landlord denied tenant's sublet request on grounds that "the move isn't really
transitory or temporary in nature." The lower court found the landlord's denial reasonable, but
the Appellate Term reversed, holding that the lower court's ruling was against the weight of the
evidence and in derogation of the sublet statute's remedial purpose to permit bona fide sublets
of apartments when they are not in use during a period of housing shortage.
Tenant moved out certain readily movable household furnishings from the apartment and
the landlord argued that this indicated he did not intend to return to the apartment. But the
Appellate Term held that this was "hardly inconsistent with an intent to reoccupy at the
expiration of the sublease." Nor, the Court ruled, was tenant's so-called failure to provide
"documentary proof" that the relocation to Florida "is in any way temporary" a valid reason for
rejection where no request for such documentation had been made in the additional information
(questionnaire) sought by the landlord. At trial tenant confirmed that he spent most of his life
in the apartment and considered New York City his home. Landlord suggested that the proposed
subtenant would permanently remain in the apartment, but the Appellate Term found this a mere
speculation and lacking an objective basis.
The Appellate Term held that the "intent to return" requirement of a sublet request
should not be "construed so closely that it all but swallows up the right to sublet liberally
granted to tenants by the statute." The Court further held that the proposed rent of the sublease,
$536.52 per month, in excess of the legal rent $510.98, is not violative of the Rent Stabilization
Code's overcharging provision in these circumstances, and particularly where the landlord made
no reference or objection to the sublease rent when he rejected tenant's request. In short, the
Appellate Term concluded that permission to sublet was unreasonably withheld by the landlord,
and the petition was dismissed.
- Case Caption:
- The Jewish Theological Seminary of American v. Roy
- Issues/Legal Principles:
- Charitable or educational institution must renew tenant's lease where tenant commenced
occupancy at a time when the institution did not own the building.
- Keywords:
- not-for-profit; piercing corporate veil; renewal notice
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Laurie Lau
- Date:
- May 18, 2001
- Citation:
- NYLJ, page 18, col 1
- Referred Statutes:
- RSL 26-511(c)(9)(c)(i)
- Summary:
- The rent law allows a charitable or educational institution to not renew a tenant's rent
stabilized lease if the tenant initial tenancy commenced after the owner acquired the property.
In other words, if the tenant is already living in a building that is later bought by a not-for-profit
institution, the owner cannot then seek to evict the such a tenant. The law specifies the
ownership of the building, not the land per se. In this case, the landlord Seminary was trying
to argue that since it owned the land, although not the building, before the tenant move in, the
Seminary was justified in refusing to renew the tenant's lease. The Seminary sold the building
to a for-profit stock corporation which transferred title back to the Seminary in 1982. Tenant
moved in when the premises were owned by the for-profit owner. The lower court and the
Appellate Term rejected the Seminary's attempt to characterize itself as the true owner of the
building all along on the doctrine known as piercing the corporate veil. Such a legal theory is
an equitable claim typically employed by a third party where abuse of the corporate form has
resulted in a wrong or fraud requiring the intervention of the court. The for-profit owner,
however, is an independent entity and in any event, the Seminary's attempt to unite its
ownership with the for-profit's ownership of the building constitutes an unwarranted application
of the piercing doctrine.
- Case Caption:
- Katz 737 Corp. v. Bernstein
- Issues/Legal Principles:
- Landlord who agrees to deregulate apartment on terms where tenant is given renewal
options consistent with rent stabilization guidelines increases cannot thereafter attempt to make
the tenant pay $8,000.00 in rent (far in excess of guidelines increases).
- Keywords:
- luxury deregulation; stipulations
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Jean Schneider
- Date:
- May 18, 2001
- Citation:
- NYLJ, page 18, col 2
- Referred Statutes:
- RSC 2520.11(n), 2520.13, 2525.3(b)
- Summary:
- In a previous Supreme Court action in or about 1987, the apartment became exempt "by
virtue of the fact that the apartment is not and will not be occupied by [tenant] as his primary
residence." It is not disputed that tenant lived outside the city, rented the apartment for
professional purposes only, and agreed to a market rent of $2,600. The agreement, however,
allowed the tenant to sign renewal leases at tenant's option on terms whose rent increases
mirrored rent stabilization guidelines increases.
Despite such Supreme Court action, the landlord obtained an order from the DHCR in
1998 deregulating the apartment based on luxury deregulation (i.e., the rent exceeds $2,000 per
month and tenant earns in excess of $175,000). Thereafter, landlord brought a holdover
proceeding based on the order of deregulation and tenant's refusal to execute a renewal lease at
the "fair market" rent of $8,000 per month. The Housing Court dismissed the petition since the
rights of the parties are governed by the arms-length transaction and lease they freely negotiated
in 1987. The apartment was exempted at that time upon its rental for professional purpose.
Hence there was no basis for landlord to apply to DHCR for an order of "deregulation"
predicated upon this tenant's income. The deregulation order is not entitled to preclusive effect
in this proceeding since it is clear that DHCR did not make any substantive determination as to
coverage; rather the default order, by its boilerplate terms, presumed that the tenant was
protected by rent stabilization in circumstances where it is clear that the agency was not
cognizant of the specific lease arrangement governing the use of the premises. Landlord is
bound, not by the DHCR order, but rather by the 1987 lease whose terms allowed rent increases
to mirror rent stabilization guidelines. Therefore, the landlord was unjustified in seeking an
$8,000 per month rent.
- Case Caption:
- 223 Chelsea Associates LLC v. Dobler
- Issues/Legal Principles:
- Building which ceases to be regulated by federal HUD rules returns to local rent
regulation status.
- Keywords:
- HUD leases; substantial rehabilitation; legal fees
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Maria Milin
- Date:
- May 18, 2001
- Citation:
- NYLJ, page 18, col 2
- Referred Statutes:
- RSC 2520.11(c); RPL 234
- Summary:
- The holdover proceedings were erroneously brought against the tenants on grounds that
the apartments became exempt from regulation upon satisfaction of the federal mortgage and
termination of tenants' HUD leases. The building was substantially rehabilitated in 1967 with
the assistance of federal funds conditioned upon the former owner's participation in a low-
income housing program. The adjoining building underwent the same rehabilitation and was
placed under rent stabilization upon the termination of federal regulation. Likewise in this case,
once the federal regulation ceased, the building returned to local rent regulation. The provision
in the HUD leases carries over into the existing statutory tenancy. Since the tenants prevailed
in these proceedings, they are entitled to legal fees.
New York Law Journal, decisions for the week of May 7-11, 2001 (6
cases)
- Case Caption:
- Parchester Preservation Co. LP v. Siegel
- Issues/Legal Principles:
- An agent may not sign a termination notice terminating a rent controlled tenancy; only
the landlord may sign such notice.
- Keywords:
- termination notice; agent
- Court:
- Civil Housing Court, Bronx County
- Judge:
- Hon. Pierre Turner
- Date:
- May 9, 2001
- Citation:
- NYLJ, page 21, col 6
- Referred Statutes:
- RPL 232-a; 9 NYCRR 2204.3(a)
- Summary:
- The landlord commenced a holdover proceeding against the rent controlled tenant, and
the tenant argued that the notice terminating the tenancy was defective. The notice was signed
by the vice-president of the corporate owner. The rent control laws state that the landlord must
sign the termination notice. The court ruled that since only the landlord is authorized to sign
a notice terminating a rent controlled tenant, the case must be dismissed because the landlord's
agent (the vice-president of the corporate owner) signed the notice.
- Case Caption:
- New York City Housing Authority v. Woody
- Issues/Legal Principles:
- Public housing tenant who is found non-desirable based on her son's harboring drugs
in the premises is not entitled to a permanent stay of the warrant even though the son no longer
lives in the apartment.
- Keywords:
- illegal usage; non-desirability; post-judgment cure
- Court:
- Civil Housing Court, Kings County
- Judge:
- Hon Thomas
- Date:
- May 9, 2001
- Citation:
- NYLJ, page 24, col 6
- Referred Statutes:
- CPLR 3042(c), 2201, 7804(g); Civil Court Act 212; RPAPL 753(4), 747-a
- Summary:
- Tenant's apartment was raided by the police pursuant to a bench warrant, and the police
found four ounces of cocaine wrapped up for sale. The tenant claimed it belonged to her son
and she led the police to an apartment where her son was visiting and he was arrested, but
ultimately not convicted. The Housing Authority brought non-desirability charges against the
tenant on grounds of the narcotics, but she claimed that she was unaware that her son kept
cocaine in the apartment and that he only stayed in the apartment a couple of nights a month.
The hearing office disbelieved the tenant, and his decision to terminate her tenancy was upheld
on appeal, all the way to the Court of Appeals.
Once the appeals process ended, the tenant was taken to Housing Court where the
landlord sought a warrant of eviction. The tenant requested a permanent stay of eviction from
the court on grounds that her son has not lived in the apartment all this time and that the event
happened way back in 1994 with no further incidents or arrests associated with her apartment.
In other words, she claims she cured the problem. The court looked to prior cases to rule that
the tenant was not entitled to a permanent stay because proceedings for nondesireability brought
by the New York City Housing Authority were not based on a claim that the tenant breached
a provision of the lease, but rather were premised on a thirty day notice terminating the tenant's
month to month tenancy. Since good cause existed to evict the tenant, there was no basis for
allowing a permanent cure (which rent stabilized tenants with leases do receive under RPAPL
753(4) for breach of lease offenses).
- Case Caption:
- Damasco v. Berger
- Issues/Legal Principles:
- Landlord may not commence an owner occupancy proceeding against loft tenant during
the initial term of a rent stabilized lease which is an abbreviated lease term.
- Keywords:
- owner occupancy; loft; rent stabilization; nonrenewal of lease
- Court:
- Civil Housing Court, New York County
- Judge:
- Hon. Maria Milin
- Date:
- May 9, 2001
- Citation:
- NYLJ, page 21, col 3
- Referred Statutes:
- RSC 2524.4, 2522.5(a)(1); 29 Rules of the City of New York 2-01(m)(3)(ii); Multiple
Dwelling Law 286(3)
- Summary:
- The landlord brought a holdover proceeding against the tenant on grounds of owner
occupancy. Initially the building was an Interim Multiple Dwelling covered by the Loft Law.
The owner claims to have legalized it by obtaining a certificate of occupancy and the Loft Board
issued a final rent order on December 13, 1999 which set the initial rent stabilized rent and
directed the owner to offer the tenants leases. In January 2000, the landlord served the tenant
with a notice of non-renewal of lease on grounds of owner occupancy.
The tenant defended on grounds that the apartment is a recently legalized loft and the
first stabilized lease was only for five months from January to May, 2000. Although the Loft
Board allows abbreviated leases for the initial term of Rent Stabilization, the regulations provide
that "no notice or proceeding by the owner to recover the unit pursuant to Section 2524.4 of the
Rent Stabilization Code may be commenced during this initial abbreviated lease term." Thus,
the tenant argues that the owner occupancy proceeding must be dismissed because it occurred
during the initial term of the abbreviated lease. The tenant cited to a number of Loft Board
regulations in support of his position.
Landlord argued that once the Loft Board legalizes a unit, the apartment is no longer
subject to any Loft Board Regulations, but rather comes under the rubric of the Rent
Stabilization Law and Code. Further, the landlord argues that the tenant received the benefit
of a full lease term, not an abbreviated lease term. This argument is based on the fact that the
landlord notified tenant of an increase in rent, and this rent was set by the Loft Board and the
tenant did not challenge it. Since the tenant did not respond, the Loft Board deemed the tenant
to have elected a one year renewal lease term governed by the rent guidelines board increases
for June, 1998 to May, 1999 and the landlord became entitled to a new increase from June, 1999
to May, 2000. The final Loft Board order, however (setting the stabilized rent), did not occur
until December, 1999.
The issue before the court involved the standard for determining what qualifies as the
initial lease term in cases where loft units are merged into the rent stabilization system. Tenant
argues that there is no initial abbreviated lease term prior to the setting of the legal regulated
rent, which did not occur here until December, 1999. Since the lease was not offered until
January, 2000, this is the initial lease term. The guidelines rent increases are merely a benefit
the landlord receives pending the declaration of full stabilized status by the Loft Board. Since
tenants do not receive any rent stabilization benefits during this limbo period, it cannot be said
that simply because guidelines rent increases are granted the owner, that this corresponds with
an initial lease term.
The court sided with the tenant's argument, relying in particular on an Appellate Term
case which held that an owner need not serve a 120-150 day nonrenewal notice to a loft tenant
on nonprimary residency grounds if the notice is served before the unit has come into the rent
stabilization system. The court held that the initial abbreviated lease term is from the date the
initial regulated rent is set to the expiration of the initial rent stabilization lease. Since in this
case, the initial regulated rent was set in December, 1999 and the initial lease expired in May,
2000, the tenant only had the benefit of a five-month lease term. The landlord cannot maintain
a holdover proceeding during the abbreviated lease term, pursuant to Loft Law rules. Hence
the court dismissed the owner occupancy proceeding.
- Notes:
- The court did not directly address the landlord's argument that once the loft unit comes
into the rent stabilization system, that the Loft Laws no longer apply. Since it is the Loft Board
Regulations, not the Rent Stabilization Code, which has the restriction against holdover
proceedings during the abbreviated lease term period, the court indirectly held that both the
Regulations and the Code apply.
- Case Caption:
- 45th Street Associates v. Spence
- Issues/Legal Principles:
- Tenant who did not challenge landlord's entitlement to legal fees waives the right to
challenge the issue on appeal.
- Keywords:
- attorneys fees; nonprimary residence; overcharges
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Thomas Fitzpatrick
- Date:
- May 10, 2001
- Citation:
- NYLJ, page 20, col 3
- Referred Statutes:
- none cited
- Summary:
- The landlord was awarded legal fees and a hearing was held on this issue. The tenant
failed to contest landlord's entitlement to recover attorneys fees at the hearing, hence the issue
was waived, and tenant cannot raise the issue on appeal. Tenant did not occupy her apartment
as her primary residence and thus landlord was entitled to legal fees. Landlord also sought legal
fees for a prior appeal which involved the same proceeding. The tenant was precluded from
raising a claim for interest on a 1989 overcharge order in this holdover proceeding. The lower
court's decision in favor of the landlord on all issues was upheld by the Appellate Term.
- Case Caption:
- Alexi v. 50 King Street Co.
- Issues/Legal Principles:
- Tenant not entitled to legal fees when proceeding is readily discontinued by landlord
before the case is determined on its merits.
- Keywords:
- attorneys fees
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Paul Feinman
- Date:
- May 10, 2001
- Citation:
- NYLJ, page 20, col 2
- Referred Statutes:
- none cited
- Summary:
- In the underlying proceeding there was no determination on the merits of landlord's
holdover proceeding. The landlord discontinued the proceeding as of right (i.e., judge's
permission not necessary) shortly after the proceeding was commenced and before tenant's
attorney had appeared or served an answer. Thus, the tenant's Small Claims complaint for legal
fees was premature because in general legal fees are appropriate in landlord-tenant matters only
when a court's decision constitutes the ultimate outcome of the matter. Apparently, the landlord
later brought another holdover proceeding and prevailed on the merits after trial. The case does
not specify the allegations of the holdover proceeding.
- Case Caption:
- Fasan v. LaVilla
- Issues/Legal Principles:
- Tenant who elects not to pay ongoing rent during holdover proceeding cannot raise
laches (i.e., stale rent) as a defense when the holdover is dismissed and landlord quickly brings
a nonpayment proceeding to collect the rent arrears.
- Keywords:
- laches
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Julia Rodriguez
- Date:
- May 10, 2001
- Citation:
- NYLJ, page 20, col 3
- Referred Statutes:
- none cited
- Summary:
- Tenant raised the defense of laches (i.e., stale rent) in this nonpayment proceeding.
The rent sued for accumulated during the pendency of a prior holdover which was ultimately
dismissed after trial. Tenant elected not to pay use and occupancy (i.e., rent) during the
proceeding, except on those occasions she was ordered to do so by the court. Although the
landlord had asked for use and occupancy during that proceeding, the lower court denied the
requests, but this did not mean that the landlord was precluded from seeking payment of those
arrears subsequent to the determination of the holdover. The nonpayment proceeding was
commenced immediately after the holdover's dismissal and tenant failed to demonstrate legal
prejudice from any delay that may have occurred. Thus, the lower court granted landlord's
summary judgment motion seeking all arrears and this was affirmed on appeal.
New York Law Journal, decisions for the week of April 30 to May 4,
2001 (3 cases)
- Case Caption:
- Sima Realty LLC v. Philips
- Issues/Legal Principles:
- Landlord cannot collect rent (use and occupancy) pending ejectment action where tenant
claims that the premises are a multiple dwelling and no residential certificate of occupancy
exists.
- Keywords:
- certificate of occupancy; multiple dwelling
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon. Edward Lehner
- Date:
- April 30, 2001
- Citation:
- NYLJ, page 22, col 5
- Referred Statutes:
- Multiple Dwelling Law 2, 4(7), 302(1)(b)
- Summary:
- Landlord went to Supreme Court in an ejectment action to evict the tenants on grounds
that the premises had no certificate of occupancy and is presumptively unsafe. The Multiple
Dwelling Law was enacted to protect tenants of multiple dwellings against unsafe living
conditions, not to provide a vehicle for landlords to evict tenants on the grounds that the
premises are unsafe. The Appellate Division held that to the extent the policy underlying the
Multiple Dwelling Law is at all pertinent, its tendency would be to compel the landlord's
expeditious conversion of the premises to residential use. The Appellate Division upheld the
lower court's denial of the landlord's request for unpaid rent because factual issues exist as to
whether the landlord knowingly countenanced the tenant's residential usage, and whether the
building is in fact a multiple dwelling (i.e., three or more residential units). If these facts be
true, then the landlord may very well not be entitled to collect any rent in the absence of a
residential certificate of occupancy, pursuant to Multiple Dwelling Law 302(1)(b). The lower
court properly required the tenant to deposit the unpaid rent with the clerk of court.
- Case Caption:
- Chatsworth Realty Corp. v. Kaltinick
- Issues/Legal Principles:
- Tenant who replaced defective kitchen cabinets and sink is not found to be in violation
of "no alterations" clause of lease.
- Keywords:
- illegal alterations
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Laurie Lau
- Date:
- May 2, 2001
- Citation:
- NYLJ, page 21, col 3
- Referred Statutes:
- none cited
- Summary:
- Landlord brought a holdover proceeding against tenant on grounds that tenant had,
without landlord's consent, made illegal alterations to the apartment, to wit: replacement of the
defective kitchen cabinets and sink. The lower court, however, observed that landlord had
refused a related request for repairs and held that the tenant did not breach the "no alterations"
clause of the lease. The Appellate Term affirmed.
- Notes:
- Very few of the facts came out in this appellate decision, so it is hard to determine why
the lower court held for the tenant. The decision seems to imply that since landlord refused
tenant's "related request for repairs," this landlord would likewise have refused a direct request
to replace the kitchen cabinets and sink. Tenants, however, are advised to be very careful in
replacing any fixtures without landlord's consent or a documented history of requests.
- Case Caption:
- Weinreb Management v. DHCR
- Issues/Legal Principles:
- MCI application may not be granted if rent impairing conditions exist in the building at
the time the application is filed, and rent impairing conditions are not necessarily confined to
"immediately hazardous violations."
- Keywords:
- MCIs; reduction in services; violations
- Court:
- Supreme Court, New York County
- Judge:
- Hon. Richard Braun
- Date:
- May 2, 2001
- Citation:
- NYLJ, page 21, col 5
- Referred Statutes:
- 9 NYCRR 2522.4(13); Administrative Code of the City of New York 27-2004(1), 27-
2115(d); Multiple Dwelling Law 4(3), 302(a)(2)
- Summary:
- Landlord filed an application to the DHCR for an MCI ("major capital improvements")
increase in rent based on the installation of a new water tank and oil tank. The DHCR denied
the application based on a building-wide reduction in services order pending. Landlord,
however, asked for reconsideration on grounds that the order was not pending, and was in fact
no longer in effect. DHCR denied reconsideration on grounds that a pending C violation existed
for peeling lead paint in the premises. The landlord filed a PAR (appeal) stating that the peeling
paint is not an immediately hazardous violation. A denial of an MCI based on violations,
landlord argues, is intended only for rent impairing violations. Additionally, the physical
condition which led to the violations had actually been corrected before the MCI application was
filed, although the violations were not removed from city records. The DHCR Commissioner
denied landlord's PAR and landlord filed an Article 78 in Supreme Court.
The Supreme Court judge rejected landlord's distinction that "immediately hazardous
violations" are the only type of violations which are rent impairing and thus subject to preclusion
of an MCI order. In fact, B violations may also be deemed "rent impairing" by Housing
Preservation and Development (HPD) and HPD did in fact declare a B violation in this very
building as rent impairing as it involved inadequate hot water in the building. The landlord
argued that it applied to HPD to get the violation removed, but the court observed that this was
not done until the PAR was filed, in other words long after the MCI application was filed. The
court would not consider evidence about the removal of the violations because an Article 78 is
limited to the record that was before the DHCR, and this would be new evidence not reviewed
by the DHCR. The court rejected landlord's appeal of the denial of its MCI application.
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