Housing Court Decisions October 2001
Editors: Colleen F. McGuire, Esq., Chief Editor
and Robert E. Sokolski, Esq.
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Significant Cases
African American Realty Co. v. Bebenek
Papaleo v. Gentle
Matter of Regal Homes, Inc. v. New York State DHCR
625 West End, Inc. v. Howard
Salaj v. Welsh
New York Law Journal, decisions for the week of October 29 to
November 2, 2001 (6 cases)
- Case Caption:
- Ramlie v. Soufer Family LLC
- Issues/Legal Principles:
- Landlord's failure to register a decontrolled apartment as rent stabilized no longer
results in the first rent being the last rent controlled rent; rather tenant may file a Fair Market
Rent Appeal, but an examination of the rent cannot exceed four years from the date the
complaint was filed.
- Keywords:
- overcharge; Fair Market Rent Appeal
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon. Edward Lehner
- Date:
- October 29, 2001
- Citation:
- NYLJ, page 26, col 1
- Referred Statutes:
- RSL 26-517(e); RSC 2521.1(a)(1)
- Summary:
- The DHCR registrations were improperly filed by the prior owner and the court
regarded them as clerical errors. They incorrectly indicated that the prior tenant was rent
stabilized rather than rent controlled. The Appellate Division noted the errors and held that the
current tenant was clearly the first rent stabilized tenant of the apartment. As such, tenant's
claim for overcharge was improper and the DHCR should convert her claim into a Fair Market
Rent Appeal since the tenant is in fact challenging the first rent stabilized rent. The Appellate
Division further held that Smitten v. 56 MacDougal St. Co. is no longer good case
law. That case held that a landlord's failure to register an apartment as rent stabilized results
in an initial legal regulated rent equal to the last rent under rent control. The new laws provide
that whatever the rent was four years prior to the filing of tenant's complaint for overcharges
is the legal rent, subject to tenant's Fair Market Rent Appeal.
- Case Caption:
- Salaj v. Welsh
- Issues/Legal Principles:
- Co-owner of building cannot evict tenant on owner occupancy grounds where other co-
owner had previously obtained another unit in the building after serving that tenant a nonrenewal
of lease notice which led to that tenant's surrender.
- Keywords:
- owner occupancy; joint ownership
- Court:
- Civil Housing Court, Queens County
- Judge:
- Hon. Bruce Kramer
- Date:
- October 31, 2001
- Citation:
- NYLJ, page 22, col 1
- Referred Statutes:
- RSC 2524.4(a)(3); Consolidated Laws of New York 94 & 321
- Summary:
- Landlords brought an owner occupancy proceeding against the rent stabilized tenant.
The building is owned by two individuals. The tenant argued after trial that one of the owners
(Adem Salaj) had previously recovered an apartment for his own use and therefore the other
owner (Mina Salaj) is barred from evicting the tenant since the rent stabilization code only
permits one of the individual owners of a building to "recover possession" of one or more
apartments for personal use. The nonrenewal of lease notice served on the tenant states that
Mina Salaj seeks the apartment for her own personal use. She signed the notice as a co-owner
"individually and as agent for Adem Salaj." The court observed that it was clear that Mina Salaj
sent the notice on her own behalf. The petition was brought in both owners' names.
The landlords purchased the building in 1998. Adem took occupancy of unit 3R in
August 1999. His daughter, Mina, states that she needs the tenant's apartment for herself, her
husband and their two children because they are paying rent in a two family house and would
rather live in the subject building. At trial the tenant produced a copy of a non-renewal notice
that Adem sent to the prior tenant of 3R, Bonnie McGovern. He signed the notice as owner and
as agent for Mina Salaj. The notice sought to recover the apartment for Adem and his wife.
Tenant McGovern initially resisted moving. During that period another apartment, unit 3L,
became available. 3L was renovated and the owners rented it for $700 a month. Adem testified
that 3L was not available for use at the time he sought 3R. He also testified that he did not
intend to take all of the apartments in this 6-family building for his family. Adem claims that
he did not "recover" 3R because he took possession without having to obtain a judgment because
Ms. McGovern vacated the unit before the case went to litigation. The owner's attorney cited
a previous case where that court ruled that the owner did not "recover" the apartment because
the matter never reached a final judgment. Adem asserts that he merely took occupancy of a
vacant apartment, and therefore his occupancy would not be a bar to Mina's right to recover the
apartment for herself.
The court ruled that Adem's nonrenewal notice to Ms. McGovern clearly stated that
Adem sought to recover her aparmtent for his own personal use. He declined to renew her lease
on that ground. Ms. McGovern resisted. The court held: "There was no evidence to suggest
that she [Ms. McGovern] would have voluntarily vacated the subject premises had it not been
for the actions of Adem Salaj in sending the predicate notice and telling her that she needed to
vacate." Hence, it cannot be disputed that Adem "recovered" Ms. McGovern's apartment based
on common usage of the word "recover." The court rejected the notion that a judgment is the
only way a "recovery" of an apartment occurs. Hence, the court concluded that since one of
the landlords (Adam) had already obtained an apartment for personal use, the other landlord
(Mina) could not evict this tenant. The court dismissed the petition.
- Case Caption:
- Goldstein v. Bush
- Issues/Legal Principles:
- Landlord's notices which fail to include language informing the Section 8 tenant that her
subsidy could be lost if she fails to respond to the notice's recertification date precludes landlord
from suspending tenant's subsidy and charging tenant a market rent.
- Keywords:
- Section 8, notices
- Court:
- Civil Housing Court, Kings County
- Judge:
- Hon. Birnbaum
- Date:
- October 31, 2001
- Citation:
- NYLJ, page 21, col 3
- Referred Statutes:
- none cited
- Summary:
- Tenant is in the Section 8 program under the federal Housing Urban and Development
("HUD"). Landlord commenced a nonpayment proceeding, but the tenant defaulted. Thereafter
the tenant did an order to show cause to vacate the default judgment, which was granted upon
tenant's agreement to pay all the rent arrears owed. Thereafter tenant obtained counsel and her
attorney sought to restore the case to the calendar on the ground that the arrears are incorrect
because HUD procedures were not followed.
The only arrears in question are for the period of August through December 2000.
During this period of time the tenant's rent subsidy was suspended. Once a tenant has been
approved for Section 8 assistance, HUD requires an annual review of the tenant's income to
ensure that the tenant pays rents commensurate with their ability to pay. This tenant's annual
recertification date is August 1. To implement a timely recertification, notice must be given to
the tenant which must, according to HUD procedures, be served between 75 and 90 days before
recertification is to be effective. If the tenant fails to respond, the owner must send a follow-up
request/notice, and if necessary, a third and final notice.
According to HUD rules, the second and third notices must state that if the tenant fails
to respond to the owner by the specified cutoff date, the owner may suspend Section 8 payments
and obtain a market rent. In this case, tenant was sent form notices dated May 1, 2000, June
14, 2000 and July 3, 2000. All the notices were identical, except for the dates of the
recertification appointment. The second and third notices did not include language to apprise
the tenant that a failure to respond would result in a loss of the subsidy on the cut-off date
(which in this case would have been July 10, 2000).
The court observed that the HUD handbook uses the word "must" in describing owner's
obligations with respect to notices. Since the notices did not inform tenant of any cutoff date
to submit her recertification documents nor apprised her of the penalty of losing her subsidy if
she should fail to comply by that date, the rent should not have been raised to a market rent.
The owner was not entitled to suspend the tenant's Section 8 subsidy since the notices did not
comply with HUD rules. Therefore the court dismissed the petition.
- Case Caption:
- TOA Construction Co. Inc. v. Tsitsires
- Issues/Legal Principles:
- Corporation which is not authorized to do business in New York when nonrenewal
notice is served, but proper authorization is obtained by the time the petition is served entitles
the landlord to proceed with the case and the petition will not be dismissed.
- Keywords:
- nonprimary residence; corporate authorization
- Court:
- Civil Housing Court, New York County
- Judge:
- Hon. Douglas Hoffman
- Date:
- October 31, 2001
- Citation:
- NYLJ, page 19, col 1
- Referred Statutes:
- CPLR 3015(b) & 103(b) & 402; Business Corporation Law 1312(a)
- Summary:
- Landlord brought a nonprimary residency proceeding against the tenant and the tenant
made a demand for a bill of particulars regarding the landlord's corporate status. When the
landlord did not respond to the bill of particulars, the tenant made a motion to the court to
compel the information. Landlord in turn asked the court to allow it to amend the petition to
reflect landlord's authorization to conduct business in New York.
Tenant argues that the petition uses the abbreviation "Inc." in its caption but the petition
neither states that the owner is a corporation nor specifies the state, country or government of
origin of such corporation. The CPLR requires that if a party is a corporation the complaint (or
petition) must state so and where known the complaint must specify the state, country or
government by or under whose laws the corporation was created.
The court held that a misstatement of a landlord's organizational form in a nonrenewal
notice does not create a jurisdictional defect. The landlord's corporate form was correctly
stated, but at the time the notice of nonrenewal was served the owner had not obtained proper
authorization to conduct business in New York State. Thereafter when the petition was served,
the owner obtained proper authorization. The court held that where a plaintiff (i.e., landlord)
sued in the name of a dissolved corporation which had been officially revived by the time of
commencement of trial, the argument that the corporation lacks capacity to sue has no merit.
The appropriate remedy is to allow the corporation to cure the defect. The court noted that this
landlord had already cured. Therefore the court refused to dismiss the petition.
- Case Caption:
- Matter of Hertz v. DHCR
- Issues/Legal Principles:
- Shareholder of 5 rent controlled units is denied rent increase based on economic
hardship.
- Keywords:
- hardship rent increase; rent control; cooperatives
- Court:
- Supreme Court, New York County
- Judge:
- Hon. Yates
- Date:
- October 31, 2001
- Citation:
- NYLJ, page 18, col 4
- Referred Statutes:
- Rent and Evictions Regulations 2200.2(h) & 2202.8 & 2202.2(h); Emergency Tenant
Protection Act 6(5); CPLR 7803(3)
- Summary:
- In 1984 sixty apartments located in three buildings underwent a cooperative conversion.
Landlord purchased 20 units, 15 of which have been sold. Landlord holds ownership in 5 units
whose tenants are rent controlled. Landlord has applied to DHCR for a rent increase on grounds
that the income derived from the apartments is less than the operating expenses and therefore
the owner is entitled to a hardship increase. Landlord receives a gross yearly income from the
five apartments of $6,874.32 and pays maintenance to the corporation in the amount of
$22,618.80.
DHCR determined that landlord's hardship increase was not warranted. In examining
the financial records for the "test year," DHCR found that the buildings received income of
$265,577.28 and had net expenses of $179,045.11, showing a net return of $86,532.17 for the
entire "building" (i.e., the coop corporation), and this latter sum exceeded 8-1/2 percent of the
capital value of the corporation. Rental increases based on hardship are permitted where the net
return is less than 8-1/2 percent. Landlord filed a PAR (an administrative appeal) arguing that
DHCR's methodology was not a fair valuation of costs and expenses.
Landlord did not object to the adjustments made to the claimed expenses, but took issue
with DHCR's pro-rating the expenses of the entire building to the five apartments owned by
landlord and comparing them with the income received from those five apartments. Rather,
landlord alleges that its actual annual income (rent for the five apartments) is $6,874.00. The
total expenses for the building after adjustments by DHCR was $179,045.11. Since landlord
owns five out of sixty apartments, it claims a pro-rata share of expenses as 1/12th of
$179,045.11, or approximately $14,920.43. Using this methodology, landlord argues that its
expenses exceeded its income by $8,046.11 on an annual basis and therefore it is entitled to a
hardship increase. Landlord argues that DHCR's methodology would mean that no shareholder
would ever be able to qualify for a hardship rent increase since the gross income for the
corporation as a whole, including maintenance fees, is attributed to his proportionate share of
the corporation. Landlord argues that it shares in 1/12th of the corporation but does not share
in 1/12th of the income of the corporation, and that a shareholder's personal net income, derived
from the rents in question, is what should be measured, not the net income of the building as
a whole.
The court noted the definition of landlord in the rent control laws regarding "hardship"
applications and concluded that a cooperative shareholder satisfies this definition. But the court
noted that the increase is permitted on the ground that the "current maximum gross building
rental . . does not equal [expenses plus] a return of 8-1/2 percent on capital value . . ." Thus,
by the terms of its regulations, DHCR focuses its concern on the income and expenses of a
building as a whole and not on the income and loss statement of a particular shareholder.
DHCR takes the position that the hardship provision is designed to protect the economic health
of rental buildings in order to ensure that rent controls do not deplete the housing stock. While
DHCR concedes that this landlord's income from the five units does not equal its individual
expenses, DHCR's regulations are designed to protect the building and not to guarantee a profit
to any individual investor.
The landlord argues that the regulations should be read to protect landlords against an
unlawful "taking" of their property, i.e., their right to a constitutionally adequate return on their
holdings. Hence, according to the landlord, it is arbitrary and capricious for DHCR to count
income the landlord does not personally receive in measuring whether the landlord receives an
8-1/2 percent return on capital value.
The court cited prior case law which held that hardship applications were denied to
shareholders of rent stabilized apartments, but the issue has never been addressed for rent
control units. The denial for owners of rent stabilized units was due to the language in the rent
stabilization law that the hardship statute applied only to "owners of buildings." Here, the
provision relating to hardship in the rent control laws applies to landlords in general, and as
noted, shareholders fit the definition of landlord in the hardship provision of the rent control
laws. Hence, the landlord argues that the inclusion of cooperative shareholders as landlords
eligible for hardship relief from rent control necessarily implies that the shareholder's income,
not the building's income, is the appropriate measure of hardship. (The court noted in an aside
that the landlord does not look to the entire building when measuring expenses as it does when
measuring income).
The court viewed the issue before it as "whether the regulation, which by its terms
measures hardship by weighing the income of a building and not the income of each individual
landlord, is irrational." The court held that although the statute permits cooperative shareholders
to apply for rent increases on rent controlled apartments, it is not arbitrary or capricious for
DHCR to limit those increases to those circumstances where the economic health of the building,
and consequently the housing stock in general, is at risk. Such an approach fulfills the purpose
of the hardship provision. The landlord argued that this interpretation means shareholders will
never get a hardship increase, but the DHCR disputed this and responded with several examples
where hardship increases were granted to shareholders. In these cases, shareholders will win
a hardship increase only when the cooperative as a whole is in financial peril.
In upholding DHCR's denial of the hardship application, the court also noted that "a
narrow snapshot" of current income is unfair because it does not take into account the entire
economic situation, including all the money made from prior sales and anticipated investment
value of the unsold shares. The court held: "Anyone who buys 20 rent stabilized and rent
controlled units in a cooperative building is thinking not only of income, but of investment value
as well. Petitioner [landlord] bought the units knowing full well that the income would be, for
some period of time, limited. Nonetheless, an economic determination was made that the
investment was worthwhile notwithstanding the rent limits. This is not a case of hardship
befalling an owner which affects the economic prosperity or survival of the housing units in
question."
- Case Caption:
- ATM One v. Landaverde
- Issues/Legal Principles:
- Notice to cure and notice to terminate are deemed served when tenant receives them,
not when landlord mails them.
- Keywords:
- notice to cure; service
- Court:
- Appellate Term, 9th & 10th Judicial Districts
- Judge:
- lower court: Hon. Janowitz
- Date:
- November 1, 2001
- Citation:
- NYLJ, page 23, col 2
- Referred Statutes:
- CPLR 2103; Emergency Tenant Protection Regulations 2504.1
- Summary:
- Landlord served a 10 day notice to cure and the lower court ruled that an additional 5
days is added to the period when the notice is served by mail. The Appellate Term reversed on
grounds that the five-day additional time period does not apply to a notice to cure. The Court,
however, held that notices to cure and to terminate are "deemed given upon delivery, not upon
mailing." In other words, the date of receipt by the tenant is the date the ten day period
commences. In this case, the tenant received the notice to cure when only nine days were left
on the cure period. Therefore, the notice was deemed defective and insufficient to serve as a
predicate for terminating the lease."
New York Law Journal, decisions for the week of October 22-26, 2001
(3 cases)
- Case Caption:
- 625 West End, Inc. v. Howard
- Issues/Legal Principles:
- Landlord who installs tenant in illegal basement cannot evict tenant but must first attempt
to obtain an amended certificate of occupancy from the Department of Buildings; only if the
Department denies the application can landlord then seek the tenant's eviction.
- Keywords:
- illegal occupancy; certificate of occupancy
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Julia Rodriguez
- Date:
- October 26, 2001
- Citation:
- NYLJ, page 19, col 1
- Referred Statutes:
- RSC 2524.3(c); Multiple Dwelling Law 300(6)
- Summary:
- Landlord commenced a holdover proceeding based on the tenant's "wrongful acts," to
wit: tenant's occupancy of the apartment "is illegal because of the requirements of law and the
owner is subject to civil or criminal penalties therefore." Tenant rented a duplex apartment for
residential use on the first floor and basement of the building premises from landlord's
predecessor in 1993. The current landlord now claims that the certificate of occupancy permits
only a doctor's office on the first story and use of the cellar for a boiler room. Landlord relies
on Multiple Dwelling Law 300(6) which does not allow a cellar or basement to be used as a
residence unless a permit for such occupancy has been issued by the Department of Buildings.
The lower court dismissed the proceeding as premature. The lower court held that there
is no proof that any violation has been placed against the premises or that landlord is actually
subject to civil or criminal penalties. Tenant has not made unauthorized alterations and has
utilized the premises as intended by the parties. The Appellate Term upheld and added, "Even
assuming the existence of a violation, landlord would be required to demonstrate that the
certificate of occupancy is incapable of amendment, or that it would be unduly burdensome to
amend it. Moreover, the Court held, that any violation of the Multiple Dwelling Law with
respect to occupancy of the basement is not a basis for eviction at this juncture in the absence
of any application to the Department of Buildings for a permit or the Department's rejection of
plans for legalization. This is not a case where a violation has been issued and the Department
has rejected a building application to cure the violation.
- Notes:
- This case is a very important ruling for tenants who occupy "illegal" apartments.
Landlords who install tenants in apartments that are not residentially listed on the certificate of
occupancy take the position that the tenant has to be evicted because the apartment is illegal.
Tenants, however, argue that since the tenant did not alter the apartment and the landlord
installed the tenant, it is landlord's duty to legalize the premises. The Appellate Term has sided
with the tenant's argument. The landlord would be allowed to evict the tenant only if it would
be impossible to legalize the apartment, such as for example, where the basement ceiling must
be a certain height but it is physically impossible to elevate the ceiling. In such circumstances,
the certificate of occupancy is incapable of amendment. The Appellate Term also allowed
landlords an "out" if it would be "unduly burdensome" to alter the certificate of occupancy.
Does that mean financially burdensome? Does it mean the work would burden other tenants?
Tenants would be advised to hire an expert (architect or engineer) to give an opinion as to what
constitutes "unduly burdensome" in their situation.
- Case Caption:
- Aybar v. Tsionkas
- Issues/Legal Principles:
- DHPD ordered to correct immediately hazardous conditions when landlord is unwilling
or unable to do so.
- Keywords:
- mold; mildew; immediately hazardous conditions; Emergency Repair Program
- Court:
- Civil Housing Court, Kings County
- Judge:
- Hon. Sikowitz
- Date:
- October 24, 2001
- Citation:
- NYLJ, page 23, col 1
- Referred Statutes:
- CPLR 5015; NYC Charter and Admin Code, Housing Maintenance Code, section 27-
2127(a)-(g), 27-2002; NYCCCA 110(c)
- Summary:
- Tenant commenced an HP action seeking an order directing the landlord and/or the City
of New York to correct certain conditions in her apartment. An inspection of the apartment by
the Department of Housing Preservation and Development (DHPD) revealed 23 violations of the
Housing Maintenance Code, including hazardous and immediately hazardous conditions. The
parties (i.e. tenant, landlord and DHPD) entered into a consent order wherein the landlord
agreed to correct the violations by a specified date. The landlord failed to correct the
conditions, including mold and mildew on the walls, windows and window sills throughout the
apartment. As a result, the tenant moved for a contempt order against the landlord for the
imposition of civil penalties and for an order directing DHPD to correct all immediately
hazardous violations. While DHPD was considering whether their agency would voluntarily
undertake the repairs pursuant to their Emergency Repair Program (ERP), the agency did not
submit opposition papers to the tenant's motion. The court issued an order directing DHPD to
correct the hazardous violations on their default. Subsequently, DHPD made the instant motion
to vacate their default. In order to vacate a default, the moving party must show a reasonable
excuse for their default and a meritorious defense. The court held that DHPD failed to establish
a reasonable excuse for their default since their failure was not to appear, but to serve opposition
papers that they were given ample opportunity to do. Moreover, on one of the return dates of
the motion, the court noted that DHPD did not request time to serve opposition papers. With
respect to their meritorious defense, DHPD argued that undertaking the repairs is discretionary
and that the agency is not obligated to perform same. Further, DHPD argued that the court did
not have the power to issue such an order. The court further held that DHPD failed to set forth
a meritorious defense to the relief requested by the tenant. The court held that when a landlord
is incapable or unwilling to correct immediately hazardous violations, then pursuant to the
Housing Maintenance Code DHPD's ERP steps in and remedies these conditions. After
undertaking the repair, DHPD reduces the repairs to a dollar amount and is able to place a lien
on the building. Finally, the court held that pursuant to section 110(c) of the New York City
Civil Court Act, it has the power to issue an order employing the services of the ERP in cases
where immediately hazardous conditions exist. In the instant case, the mold and mildew was
not only a dangerous condition in and of itself but it exacerbated the asthma of tenant's two
young children.
- Case Caption:
- Matter of Smuller v. New York State Division of Housing and Community
Renewal
- Issues/Legal Principles:
- Succession rights denied in the absence of co-occupancy with the tenant of record for
the full two year period prior to permanent vacatur.
- Keywords:
- succession rights; family member; co-occupancy
- Court:
- Supreme Court, Queens County
- Judge:
- Hon. Thomas
- Date:
- October 24, 2001
- Citation:
- NYLJ, page 23, col 3
- Referred Statutes:
- RSC 2523.5(b), 2522.7, 2520.6, 2500.2(h)
- Summary:
- Petitioner seeks a judgment vacating DHCR's decision denying her complaint that the
landlord failed to offer her a renewal lease. The petitioner in this case is not the tenant of
record, rather she is the granddaughter of the tenant of record who is seeking succession rights.
Petitioner moved in with her ailing tenant-grandmother 19 months prior to her death. At the
time of the tenant's death, petitioner was still residing at the subject apartment. The landlords
refused to offer petitioner a renewal lease and in fact served her with a notice of nonrenewal.
In response, petitioner filed a complaint with DHCR alleging that the landlord failed to offer her
a renewal lease. The Court upheld DHCR's denial of this complaint primarily because petitioner
was not entitled to succession rights insofar as she was unable to show that she resided with her
grandmother for the full two year period prior to her death. The court further held that DHCR
properly held that succession rights is limited to family members who evidenced a more
permanent co-occupancy in the subject apartment (i.e. the full two year period).
New York Law Journal, decisions for the week of
October 15-19, 2001
(6 cases)
- Case Caption:
- 89 East 3rd Street Tenants Association v. Lamotta
- Issues/Legal Principles:
- fill in
- Keywords:
- nonprimary residence; ongoing physical nexus; income tax
returns
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Shlomo S. Hagler
- Date:
- October 16, 2001
- Citation:
- NYLJ, page 18, col 1
- Referred Statutes:
- none cited
- Summary:
- The trial court held that the tenant does not maintain the
subject apartment as his primary
residence. The court based its decision on evidence that the
tenant maintains an alternate
residence on the same street where he operates a pizzeria.
Moreover, the tenant maintained
telephone service at the alternate address and listed this
address on his driver's license and motor
vehicle registration. The evidence further reflected that the
tenant's cousin lived at the subject
premises and in fact maintained telephone service there.
Finally, the trial court drew a negative
inference from the fact that the tenant failed to produce his tax
returns for the relevant time
period, holding that where one files taxes is one of the factors
for determining primary
residence. The appellate term upheld the trial court's finding
of nonprimary residence.
- Case Caption:
- Matter of Regal Homes, Inc. v. New York State Division of
Housing and
Community Renewal
- Issues/Legal Principles:
- There is no time limit for DHCR to reopen and reconsider
proceeding for irregularity
in a vital matter.
- Keywords:
- reconsideration; reopening DHCR proceeding; Article 78
- Court:
- Appellate Division, Second Department
- Judge:
- lower court: Hon. Cammer
- Date:
- October 17, 2001
- Citation:
- NYLJ, page 20, col 5
- Referred Statutes:
- none cited
- Summary:
- The subject appeal sought to overturn the Supreme Court's
denial of an Article 78
petition which sought to overturn the DHCR's denial of the
landlord's petition for administrative
review (PAR) and affirmation of the Rent Administator's order,
which upon reconsideration
revoked a prior order and ultimately found that the subject
premises was rent controlled. The
landlord argued that the DHCR violated its own Policy Statement
91-5 by reconsidering the Rent
Administrator's decision more than 95 days after it was issued.
The Appellate Division held that
the Policy Statement does not limit the time within which the
DHCR may reopen a proceeding
for "irregularity in a vital matter." The Court further held
that DHCR's decision that its original
decision was incorrect was in fact an irregularity in a vital
matter, therefore authorizing the
agency to reopen the proceeding. Finally, the Court held that
DHCR's decision finding that the
subject premises is subject to rent control is not arbitrary and
capricious and has a rational basis
in the record.
- Case Caption:
- Prince v. Bisson
- Issues/Legal Principles:
- Court found after trial that tenant did not utilize the
subject apartment as her primary
residence.
- Keywords:
- nonprimary residence; illegal sublet; profiteering
- Court:
- Civil Housing Court, Kings County
- Judge:
- Hon. Julia Rodriguez
- Date:
- October 17, 2001
- Citation:
- NYLJ, page 23, col 5
- Referred Statutes:
- Loft Board Regulation 2-08(j)(1)(i); 29 RCNY
2-09(c)(4)(ii),(E)
- Summary:
- Landlord commenced a nonprimary residence proceeding to
recover rent stabilized loft
apartment. The court looked to the evidence which reflected that
the Tenant purchased a car and
obtained a car loan in Kingston, NY which is near her alternate
residence in Woodstock.
Further, the evidence reflected that she registered and insured
the car to a post office box that
she obtained in the Woodstock area. Morover, the evidence
reflected that the tenant placed an
advertisement for employment in a local newspaper. Finally, the
court emphasized that the tenant
engaged in profiteering when she rented the subject premises to
two and later three people. The
tenant defended, claiming her tax forms, driver's license and
passport were listed to the subject
premises and that she commuted to Woodstock as the car ride was
two hours and twenty
minutes. The court held that the tenant did not utilize the
subject apartment as her primary
residence and awarded the landlord possession of the apartment.
- Case Caption:
- Negron v. Goldman
- Issues/Legal Principles:
- Landlord's motion to vacate default is denied where two
prior decision foreclose
landlord's claim of a meritorious defense.
- Keywords:
- defaults; overcharge; meritorious defense
- Court:
- Civil Court, New York County
- Judge:
- Hon. Lucy Billings
- Date:
- October 17, 2001
- Citation:
- NYLJ, page 18, col 5
- Referred Statutes:
- CPLR 5015(a)(1), (5), 213-a, 3216, 3212(b), (e), 2221(e)(2),
2005; 22 NYCRR 130-1.1;
9 NYCRR 2526.1(d)
- Summary:
- Tenant commenced an overcharge case against the landlord in
Civil Court wherein the
landlord was found liable. A trial was scheduled for the
assessment of damages. The landlord
appealed and the Appellate Term modified by limiting the tenant's
recoveries to four years prior
to the commencement of the overcharge action. After some time,
tenant moved to restore the
overcharge action in Civil Court for the assessment of damages
and the landlord failed to timely
oppose tenant's motion for restoration, which was granted upon
the landlord's default. Landlord
sought to vacate its default, but the Civil Court refused to
grant such relief. The Civil Court
held that the landlord failed to present a meritorious defense as
the prior Civil Court and
Appellate Term decisions foreclosed the landlord's denial of
liability for overcharge. The Court
also sanctioned the landlord $360.00 for tenant's attorney's fees
expended at the court
appearance in which landlord defaulted.
- Case Caption:
- 111 on 11 Realty Corp. v. Norton
- Issues/Legal Principles:
- Commercial building converted to residential multiple
dwelling with landlord's
knowledge is subject to rent stabilization and multiple dwelling
registration requirements despite
violation of certificate of occupancy.
- Keywords:
- certificate of occupancy; multiple dwelling registration;
conversion
- Court:
- Civil Housing Court, Kings County
- Judge:
- Hon. Baily-Schiffman
- Date:
- October 17, 2001
- Citation:
- NYLJ, page 24, col 1
- Referred Statutes:
- MDL 325, 4(7), 301, 302; RPAPL 741; NYCAC 26-501; ETPA 8622,
8625; RRRA
26-504.2
- Summary:
- Landlord leased tenant the entire fourth floor of a
Williamsburg commercial building by
use of a commercial lease agreement but had knowledge of and gave
permission for tenant's
conversion of the commercial space to four residential units. In
fact, the landlord's employees
assisted with the conversion and the transportation of
residential fixtures to the fourth floor.
Subsequently, the landlord sold the building and the new landlord
attempted to evict the tenant
based upon expiration of the commercial lease agreement. The
court dismissed the petition
holding that the building was a de facto multiple dwelling and
that the petitioner failed to file a
multiple dwelling registration statement and obtain a certificate
of occupancy for the residential
units. The court found that there were three residential spaces
on the second floor, one on the
fifth floor and four on the fourth floor, all of which the new
landlord knew or should have
known existed. The court rejected the petitioner's claim that a
rent of over $2,000.00 for the
fourth floor exempted the units from stabilization, finding that
such exemption only applies to
a "legal regulated rent" and landlord failed completely to
register the unit with DHCR. The
court also noted that rent stabilization would apply to the
building despite its commercial zoning,
particularly where the landlord failed to present evidence that a
residential certificate of
occupancy could not be obtained in a neighborhood that the court
recognized was being
converted from commercial to residential use. Finally, the court
rejected landlord's claims for
use and occupancy based upon landlord's failure to register the
building or obtain a certificate
of occupancy, and ordered that use and occupancy paid by the
tenant without prejudice during
the course of the proceedings be returned.
- Case Caption:
- Koroma v. Kempster
- Issues/Legal Principles:
- HPD ordered to take steps to enforce vacate order.
- Keywords:
- security deposit; basement apartments; habitability; vacate
order
- Court:
- Civil Court, Richmond County
- Judge:
- Hon. Straniere
- Date:
- October 17, 2001
- Citation:
- NYLJ, page 25, col 3
- Referred Statutes:
- CCA 110(c), 203(n), 203(o); NYCAC 27-2139, 27-2140, 27-2002;
MDL 302-a,
309(1)(a), (e), (f), 302(2); 25 RCNY 91
- Summary:
- This case was initially commenced in Small Claims Court
wherein the plaintiff-tenant was suing
for the return of his security deposit. At trial, it was
revealed that the plaintiff named the
incorrect party as the owner of the subject premises and the
court gave the plaintiff the
opportunity to add the correct owner as a party to the small
claims action. As a result of the
testimony, it became apparent that the plaintiff leased an
illegal basement apartment and the court
ordered an inspection by the Department of Housing Preservation
and Development (HPD).
HPD's inspection revealed that the subject building (which was
combined with the adjoining
building) contained four illegal apartments. The HPD inspector
issued violations and vacate
orders against these apartments, noting that the apartments were
unfit for human habitation. The
case was transferred to Civil Court for a hearing on the illegal
occupancies.
The landlord claimed that he hired an architect to legalize
the apartments. However, the
apartments needed to be vacant in order to achieve this goal.
The landlord conceded that
although the apartments were illegal, the tenants failed to
vacate as a result of the vacate order.
The landlord testified that he spoke to HPD as well as the
Department of Buildings, both of
whom refused to enforce the vacate order. The court noted that
this left the landlord unable to
legalize the subject apartments since the tenants refused to
voluntarily vacate and the landlord was unable to collect
rent and/or use and occupancy because of the illegal status. The
court ordered the tenants of all
illegal units appear in this action. Subsequently, three of the
four units were vacated, leaving
one tenant in occupancy of an illegal unit.
HPD failed to provide the court with a policy statement with
respect to when it will
enforce and vacate an apartment it deems to be unfit for human
habitation. The court noted that
the vacate order obligates the landlord to remove the violation.
However, if the landlord was
to commence a summary proceeding, the resolution would exceed the
violation cure period set
forth in the vacate order. This would subject the landlord to
additional monetary penalties.
Further, the court recognized that many housing court judges will
not permit a landlord to bring
summary proceeding when an illegal apartment is involved and
instead would require an action
in ejectment, thereby further delaying the process. Accordingly,
the court ordered HPD to
exercise its authority to take whatever steps are necessary to
vacate the premises.
New York Law Journal, decisions for the week of October 8-12, 2001
(3 cases)
- Case Caption:
- Papaleo v. Gentle
- Issues/Legal Principles:
- Landlord's nonpayment proceeding should have been dismissed because landlord is not
entitled to collect rent on an apartment for which there is no certificate of occupancy.
- Keywords:
- certificate of occupancy
- Court:
- Appellate Term, 9th & 10th Judicial Districts
- Judge:
- lower court: Hon. Liebowitz
- Date:
- October 9, 2001
- Citation:
- NYLJ, page 26, col 4
- Referred Statutes:
- RPAPL 711(1) & (2), Multiple Dwelling Law 301, 302
- Summary:
- Landlord received a final judgment of possession in this nonpayment proceeding which
was converted into a holdover proceeding. The tenant sought to vacate the final judgment and
have the petition dismissed. The lower court denied, but the Appellate Term reversed and
granted Tenant's request. The Appellate Term held that since the landlord waived the rent
arrears due to the lack of a certificate of occupancy (since its absence meant that landlord could
not collect any rent anyway), the nonpayment proceeding should have been dismissed from the
beginning. This is so because a nonpayment proceeding is predicated on the default of rent but
this tenant owed no rent due to the absence of a certificate of occupancy. Since the proceeding
should not have gone forward from the beginning, landlord should not have been allowed to
evict the tenant via a nonpayment proceeding. Since there was no termination of the tenancy,
the landlord should not have been allowed to convert the nonpayment proceeding into a holdover
proceeding.
- Case Caption:
- 610 West 136th Street Tenants Assoc. v. Romero
- Issues/Legal Principles:
- Landlord is not required to serve petition in Spanish even though landlord knows tenant
does not speak English.
- Keywords:
- unlawful sublet; nuisance; sufficiency of facts; Spanish interpretation
- Court:
- Civil Housing Court, New York County
- Judge:
- Hon. Timmie Elsner
- Date:
- October 9, 2001
- Citation:
- NYLJ, page 20, col 6
- Referred Statutes:
- Judiciary Law 218, 386, 387
- Summary:
- The landlord is the net lessee of the building as a member of the Tenant Interim Lease
("TIL") program. This program allows low income tenants to purchase the building and operate
akin to a co-op. Thus, the "landlord" is really all the tenants. Tenant has been living in the
apartment since the building entered the TIL program, at least since 1978 when he arrived from
Cuba. Tenant claims that he neither reads nor speaks English and the landlord is aware that he
only speaks Spanish.
Landlord commenced this proceeding on nuisance grounds alleging that the tenant had
sublet the apartment to three men who have verbally and physically abused the tenants on
numerous occasions, causing the police to be summoned to the building on numerous occasions.
The tenant claims that the predicate notices and petition should, in addition to English, be served
in Spanish since that is the only language he speaks and landlord knows this. The court
observed that the tenant cited no case law or statutory authority for his position that the failure
to serve the petition in Spanish required the petition's dismissal. The Judiciary Law allows for
court interpreters, but it has not been extended to require landlords to serve their legal pleadings
in another language. The court denied the tenant's request to dismiss on this ground.
The tenant also raised the issue that the termination notice did not specify with
particularity the allegations forming the basis of the proceeding, and therefore the petition should
be dismissed. The court again disagreed with the tenant, holding that a termination notice does
not have to be particularly detailed since the tenant can always served a Demand for a Bill of
Particulars in order to ascertain more information about the allegations. Finally the court ruled
that the landlord was not required to serve a notice to cure in a nuisance proceeding.
- Case Caption:
- Ken May Corporation v. John Doe
- Issues/Legal Principles:
- Daughter fails to succeed to mother's rent control apartment as she has house in
Brooklyn and important documents tying her to the Brooklyn address.
- Keywords:
- succession rights
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Timmie Elsner
- Date:
- October 10, 2001
- Citation:
- NYLJ, page 18, col 1
- Referred Statutes:
- New York City Rent and Eviction Regulations
- Summary:
- The respondent failed to affirmatively establish her right to succeed to the rent controlled
apartment when her mother, the tenant of record, died. Whether the relevant two-year period
to determine respondent's rights is measured from the time the mother was hospitalized in
December, 1997 or her death in December, 1998, the record is devoid of proof that the
respondent resided with her mother as her primary residence. The lower court's decision against
respondent was upheld by the Appellate Term who noted that the evidence shows that respondent
and her husband jointly own a house in Brooklyn and her tax returns, banking records and
Medicare statements refer to that address. The tenant in the adjoining apartment testified that
she did not see respondent at the apartment on a regular basis until after the mother's death.
New York Law Journal, decisions for the week of October 1-5, 2001
(7 cases)
- Case Caption:
- 335 East 70th Realty Inc. v. Sara A.M.
- Issues/Legal Principles:
- Disabled daughter of deceased tenant proves one-year of co-occupancy with father,
thereby winning her succession rights claim to the apartment.
- Keywords:
- succession rights; disability
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Maria Milin
- Date:
- October 2, 2001
- Citation:
- NYLJ, page 18, col 1
- Referred Statutes:
- 9 NYCRR 2204.6(d)
- Summary:
- The respondent is the disabled daughter of the deceased rent controlled tenant. She
claimed succession rights to the apartment, and won in the lower court, and won on appeal as
well. Since she is disabled, she only had to show that for one year she resided with her father
prior to his death. The trial revealed that the respondent returned to the United States in April
1996 and moved in with her father to obtain better treatment for her illness. She traveled out
of the country on three occasions for visits with relatives and spent weekends at her mother's
home in East Hampton. The court ruled that her temporary absences did not sever her primary
ties to the New York apartment which was her only residence. She had voluminous
documentary evidence which proved her substantial nexus to the apartment for one year
immediately prior to her father's death.
- Case Caption:
- Low v. Cullen
- Issues/Legal Principles:
- Loft apartment is deemed exempt from rent stabilization by virtue of a prior settlement
where the fixtures were sold.
- Keywords:
- interim multiple dwelling; illusory prime tenant; month-to-month tenant; Loft Law; sale
of fixtures
- Court:
- Civil Housing Court, New York County
- Judge:
- Hon. Douglas Hoffman
- Date:
- October 3, 2001
- Citation:
- NYLJ, page 20, col 1
- Referred Statutes:
- MDL 286(3),(6),(12); RSC 2520.11(q); 29 RCNY 2-10(c)(2); 29 NYCRR 2-10(b)
- Summary:
- In the instant case, there was no dispute that the subject building became an interim
multiple dwelling with ten residential units. Pursuant to the Article 7C of the Multiple Dwelling
Law (i.e. the "Loft Law"), the building was later converted to a multiple dwelling. The issue
before the Court was whether or not the subject apartment (third floor, rear) was subject to rent
stabilization. In this proceeding, Petitioner claims that it is terminating Respondent's month-to-
month tenancy and Respondent asserts that her landlord is an illusory prime tenant and that she
should be deemed the rent stabilized tenant of the subject apartment. Petitioner claimed that his
predecessor in interest (i.e. the former landlord) settled a prior Supreme Court case with the
tenant's predecessor in interest (i.e. the current landlord) and sublessees by purchasing the prior
tenant's fixtures and rights (for more than six times the value of same). In exchange, the
landlord obtained an explicit sale of improvements as well as a cancellation of the sublease then
in effect, as well as cancellation of the overlease. Thereby the subject apartment was removed
from rent regulation. The Court noted that the Supreme Court accepted this settlement and that
all sides were represented by counsel. Respondent attacked the consideration given in this
agreement. However, the Court held that it was bound by the "four corners of the agreement"
and refused to speculate as to whether or not sufficient consideration was given and ultimately
agreed with the landlord's position, granting him a judgment of possession.
- Case Caption:
- Resto v. Sunset Housing Associates
- Issues/Legal Principles:
- Son of Section 8 tenant who died cannot succeed to his mother's apartment since he did
not reside with her prior to her death and once he became a legal adult he elected to remain in
foster care during the relevant time period.
- Keywords:
- Section 8; succession rights; illegal lock-out; continued occupancy
- Court:
- Civil Housing Court, Kings County
- Judge:
- Hon. Wright
- Date:
- October 3, 2001
- Citation:
- NYLJ, page 22, col 2
- Referred Statutes:
- 24 CFR 982.551; 9 NYCRR 2523.5
- Summary:
- The Petitioner is the son of the tenant of record who died in August, 2001. He brought
an illegal lock-out when the landlord's changed the apartment's locks. The petitioner's mother
received Section 8 benefits because the apartment is in a Section 8 housing project. Petitioner
is 21 years old but hasn't lived in the apartment since he was 15 years old. He was sent to a
foster home in that period. The record reflected that until petitioner's mother's health took a
turn for the worse, establishing petitioner in his own apartment was clearly the goal. Over the
summer petitioner was spending some weekends with his mother, but did not begin any
prolonged, day in and day out occupancy, until shortly before her death. The court was faced
with examining the nature of petitioner's occupancy at the time of his mother's death.
The family receiving Section 8 benefits from the government must supply information
as to its composition and advise when the composition changes. The mother did this in 1986
when she said that her son no longer lived in the apartment. The law provides that a family
receiving benefits must promptly advise as to the absence of a family member. Absence of
course is not removal, however on her own, petitioner's mother advised that her son no longer
lived in the apartment. The Court held that since there was no actual residence at the subject
apartment by petitioner, nor was there continuity of residence, he would not be entitled to
succession rights. The Court further noted that when petitioner turned 18 years old, he became
a legal adult and nonetheless elected to remain in foster care. Accordingly, the Court further
found that there was no expectation of support from his mother nor a serious intent to return to
the apartment until perhaps when it became apparent that he could make a claim for the
apartment. Since the Court found that petitioner could not establish a succession rights claim,
it refused to restore him to the subject apartment, holding that doing so would subject him to
a holdover proceeding that he would not be able to win. However, the Court allowed petitioner
limited access to the apartment to retrieve any belongings that he may have there.
- Case Caption:
- In re 1781 Riverside, LLC v. New York State DHCR and Abreu
- Issues/Legal Principles:
- DHCR properly converted tenant's overcharge complaint into a Fair Market Rent
Appeal.
- Keywords:
- overcharge; fair market rent appeals; article 78; statute of limitations; comparability data
- Court:
- Appellate Division, First Department
- Judge:
- lower court: Hon. William McCooe
- Date:
- October 4, 2001
- Citation:
- NYLJ, page 18, col 2
- Referred Statutes:
- none cited
- Summary:
- The Appellate Division affirmed DHCR's order establishing a fair market rent for the
subject apartment. Accordingly, the appellate court dismissed the underlying Article 78
proceeding which sought to annul DHCR's denial of petitioner's administrative appeal of the
agency's underlying decision. The Court held that the Supreme Court properly found that the
DHCR decision was not arbitrary and capricious insofar as it held that the tenant's overcharge
complaint was properly converted into a Fair Market Rent Appeal (FMRA). Further, the Court
noted that DHCR properly limited its examination of the subject apartment's rental history to
four years prior to the tenant's initial rent challenge. Finally, the Court rejected petitioner's
argument that DHCR did not afford a sufficient opportunity for the landlord to submit
comparability data.
- Case Caption:
- Fairfax Mgt. Corp. v. Taveras
- Issues/Legal Principles:
- Jury waiver clause in original lease binds successor tenant.
- Keywords:
- renewal lease; jury waiver; succession rights
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Brenda Spears
- Date:
- October 5, 2001
- Citation:
- NYLJ, page 18, col 1
- Referred Statutes:
- none cited
- Summary:
- Reversing the trial court, the Appellate Term granted landlord's motion to strike tenant's
jury demand. The court held that the original lease (in tenant's deceased husband's name)
contained an enforceable jury waiver clause. Further, the court held that since the respondent
(as a successor tenant) later signed successive renewals of this lease, the tenancy was renewed
on the same terms and conditions of the former tenant's original lease.
- Case Caption:
- African American Realty Co. v. Bebenek
- Issues/Legal Principles:
- Guarantor of tenant's lease who does not appear in court cannot be subject to a monetary
judgment.
- Keywords:
- consent judgment; stipulations; guarantor
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Timmie Erin Elsner
- Date:
- October 5, 2001
- Citation:
- NYLJ, page 18, col 1
- Referred Statutes:
- none cited
- Summary:
- In this case, appellant's son (the tenant of record) appeared in court and signed a
stipulation of settlement settling a holdover proceeding which was so-ordered by the trial court.
In this stipulation, appellant's son consented to a money judgment. The Appellate Court vacated
a consent money judgment entered against appellant since appellant did not appear in court, was
not mentioned in the stipulation and was not a party to the lease. Instead, she was a guarantor
on her son's lease. Accordingly, the Court reversed the trial court holding that appellant cannot
be bound by the consent judgment. Moreover, in the absence of proper service, any default in
the underlying holdover proceeding could not form the basis for entry of a money judgment.
- Case Caption:
- New York University v. Eckstein
- Issues/Legal Principles:
- Tenant who is given rent stabilization rights pursuant to a stipulation loses this right
when the stipulation allows the landlord to evict on one or more specified grounds of the Rent
Stabilization Code, and landlord university seeks the apartment for educational purposes.
- Keywords:
- institutional use; breach of stipulation
- Court:
- Appellate Term, First Department
- Judge:
- lower court: Hon. Larry S. Schachner
- Date:
- October 5, 2001
- Citation:
- NYLJ, page 18, col 1
- Referred Statutes:
- RSC 2524.4[b]
- Summary:
- In November, 1995, the parties entered into a so-ordered stipulation of settlement
wherein the landlord was to issue an initial rent stabilized lease. The landlord complied with this
portion of the stipulation. The parties further agreed that in the event any court or agency
thereafter found that the subject apartment did not qualify for rent stabilization coverage, then
petitioner would still be unable to refuse a renewal lease except on the following grounds: (1)
an alleged breach of a substantial obligation of tenancy, (2) nonpayment of rent, or (3) for one
or more of the specified grounds listed in the Rent Stabilization Code. Pursuant to the RSC, the
landlord subsequently commenced the instant holdover proceeding based upon its intent to utilize
the premises in connection with its educational purposes (i.e. institutional use). The tenant
defended this proceeding, claiming that the landlord was in breach of the November, 1995
stipulation of settlement. The Appellate Term affirmed the trial court, striking the tenant's
affirmative defenses. The Court held that the stipulation was expressly drafted subject to
tenant's obligations under the Rent Stabilization Code and referenced the specified grounds for
non-renewal, one of which is institutional use. The Court further held that the stipulation was
the result of extensive negotiations between the parties, who were represented by counsel.
Finally, the Court held that tenant's remaining arguments (i.e. jurisdictional defenses and jury
demand) were also without merit and must likewise be stricken from tenant's answer.
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