Housing Court Decisions January 1998

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Case Caption:

Brantley v. Riley

Issues/Legal Principles:

Sanctions imposed on landlord for falsely signing non-military affidavit which led to tenant's eviction.

Keywords:

sanctions; non-military affidavit

Court:

Civil Housing Court, Kings County

Judge:

Hon. Callender

Date:

January 27, 1997

Citation:

NYLJ, page 32, col 5

Referred Statutes:

Uniform Rules of the Trial Court 130-1

Summary:

In a post eviction hearing, the landlord admitted that he signed a false non-military affidavit and the court set a hearing to determine if the landlord should be sanctioned for his misconduct. The court noted that the landlord's affidavit was the basis of a default judgment that resulted in the issuance of a warrant and eviction of the tenant. The court found through the landlord's testimony that he had ample time to review the affidavit for accuracy and that no one pressured him to sign it The court also found that the landlord offered no justification for why he signed the false document and that the landlord further admitted that the information was false. The landlord's attorney argued that it was a di minimus error and that his 77-year old client's age should be a factor for consideration to not impose sanctions. The Court rejected the landlord's position and imposed costs against him in the form of reimbursement for the tenant's reasonable attorney's fees incurred in moving to vacate the default judgment which arose out of a result of the landlord's improper actions.

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Case Caption:

Gayle v. Hines

Issues/Legal Principles:

Petition based on drug usage is dismissed for failure to plead sufficient activity by the tenants.

Keywords:

illegal usage

Court:

Civil Housing Court, Queens County

Judge:

Hon. B. Greenbaum

Date:

January 28, 1998

Citation:

NYLJ, page 29, col 5

Referred Statutes:

none cited

Summary:

Pursuant to a demand by the Queens District Attorney, landlord brought a holdover against the tenants on grounds of alleged illegal use of premises for narcotics trafficking. Tenant Hines was arrested for possession of heroin in front of the building, the top floor of a two-family house. The tenants are month to month tenants. The tenants sought to dismiss the petition on grounds that the sale did not occur on or in the premises, although the arrest report stated that it occurred in front of the building, and the court held that the front area is a sufficient basis to evict the tenants. The tenants also sought dismissal because the police never entered her apartment. The court noted that the landlord's legal papers failed to show the outcome of the criminal case, whether there was a conviction or not. The court noted that in this type of proceeding the landlord must present a scintilla of proof that the apartment and/or its immediate vicinity was being used for illegal purposes and that there were other observations or attempts at sale or possession of narcotics on other occasions. In other words, a single incident will not suffice. As to the other tenant, the petition failed to allege any unlawful conduct whatsoever. The court dismissed the petition for lack of sufficient allegations.

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Case Caption:

Prosnitz v. Augustus

Issues/Legal Principles:

Receiver has no authority to seek eviction of condominium unit owner in Housing Court

Keywords:

condominiums; jurisdiction

Court:

Civil Housing Court, Bronx County

Judge:

Hon. Anthony Fiorella

Date:

January 28, 1998

Citation:

NYLJ, page 28, col 3

Referred Statutes:

RPAPL 713

Summary:

The petitioner, a court appointed Receiver, brought a holdover against the fee owners of a condominium unit for unpaid common charges: the condo owner had not paid any maintenance (the equivalent of rent) for almost 8 years. The receiver was appointed in a Supreme Court action to foreclose a lien for unpaid common charges against the owners of the unit. The order of appointment authorized the Receiver to take all legal action necessary to protect the unit, including eviction proceedings against the tenants or other persons in occupancy. The respondent, fee owner of the unit, made a motion arguing that Housing Court is not the proper forum to seek an eviction of a condo unit owner because there is no landlord/tenant relationship between the parties. The court noted that title to the unit was still vested in the condo owner. The court parsed RPAPL 713, the statute that authorizes evictions where no landlord-tenant relationship exists, but noted that the statute made no provisions to allow an eviction under these particular circumstances. The court granted the motion because the Receiver lacked standing to maintain a summary eviction proceeding for non-payment of common charges by a condo unit owner.

Notes:

The Receiver's recourse is to bring an action for ejectment in Supreme Court.

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Case Caption:

Donnelly v. Greene

Issues/Legal Principles:

Tenant cannot resurrect late signing of renewal lease to challenge the time period in which landlord commenced an owner occupancy proceeding; tenant must seek court's permission to obtain documents from landlord and not subpoena landlord's bank.

Keywords:

owner occupancy

Court:

Civil Court, New York County

Judge:

Hon. Martin Shulman

Date:

January 28, 1998

Citation:

NYLJ, page 26, col 6

Referred Statutes:

CPLR 3212; RSC 2524.4(a) & 2523.5(a); 22 NYCRR 208.42(g); MDL 325(1); Administrative Code D26-41.21(b); RPAPL 743

Summary:

Landlord commenced a holdover against tenant Greene to recover the apartment on grounds of owner occupancy. On or about August 19, 1996, Greene was served a notice of non- renewal of the lease. Greene's tenancy was to expire on December 31, 1996. Greene argued that the prior landlord had failed to timely renew his lease and therefore the lease unlawfully had commenced on January 1, 1995 and the current landlord's non-renewal notice was thus untimely. The landlord argued that Greene never filed a complaint on this issue to the DHCR to "reform" the untimely served lease, and should be estopped from arguing the issue at this belated point. The Court sided with the landlord, holding that the signed renewal lease was binding on the tenant and he cannot now with the benefit of hindsight seek to invalidate it simply for purposes of defeating the holdover proceeding. The court dismissed various affirmative defenses and counterclaims claimed by the tenant, including that the landlord violated Fair Credit Reporting Acts by seeking consumer reports on the tenant. The court ruled that this counterclaim was not intricately related to the holdover's issue of owner occupancy. The court also quashed subpoenas brought by tenant's counsel seeking landlord's bank records regarding mortgage payments and other information. The court held that the documents were sought without properly obtaining the court's permission (i.e., a motion for discovery of such documents).

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Case Caption:

H.O. Realty Corp. v. Fernandez

Issues/Legal Principles:

Nonprimary residency proceeding dismissed for notice's failure to set forth "facts" about tenant's lack of connections to her apartment.

Keywords:

non-primary residency

Court:

Civil Housing Court, New York County

Judge:

Hon. Acosta

Date:

January 28, 1998

Citation:

NYLJ, page 27, col 3

Referred Statutes:

RSC 2524.2(b) & 2524.3; RPAPL 741

Summary:

Landlord brought a holdover proceeding against the rent controlled tenant on grounds of nonprimary residency. The termination notice stated "Tenant is married to a German national and maintains a home in Germany." Tenant moved to dismiss the petition on grounds that the notice of termination fails to set forth sufficient facts. The court agreed with the tenant, holding that the facts alleged do not at all tend to establish the ground for the holdover, i.e., that tenant does not occupy the apartment as her primary residency. The court said the notice's language fails to address the critical question of whether the tenant maintains an "ongoing, substantial, physical nexus" with the apartment, and due to its insufficiency of facts, the court dismissed the petition.

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Case Caption:

WSLSJ & I Weinreb v. Bogoch

Issues/Legal Principles:

Landlord who did not substantially repair leaks as agreed in a stipulation was not entitled to rent monies placed in escrow until complying with the stipulation.

Keywords:

stipulations; escrowed rent

Court:

Appellate Term, 1st Dept.

Judge:

lower court: Hon. Jack Dubinsky

Date:

January 29, 1998

Citation:

NYLJ, page 28, col 2

Referred Statutes:

none cited

Summary:

The landlord and tenant entered into a stipulation wherein the tenant's deposit of the rent into escrow was to be released only upon substantial completion of specified repairs, including leaks. There was no proof that the leaks were repaired and landlord failed to submit an engineers report attesting to substantial completion of the work. As a result, the appellate court reversed the lower court's ruling that the escrow monies be released to the landlord.

Notes:

Presumably the tenants sought a stay of the lower court's order from releasing the escrow monies. Presumably the monies remained in escrow during the course of the appeal of the order to release them. Withholding of rent is the best way for tenants to be assured that the repairs will be completely remedied. The lower court judge tried to take away the tenant's leverage by its order to release the monies. Fortunately, the appellate term reversed the judge's decision.

Case Caption:

In re: Raphael Bazbaz v. State of New York Division of Housing and Community Renewal

Issues/Legal Principles:

The DHCR's order of high income / high rent deregulation after tenant's default was rationally based upon the provisions of the rent stabilization law and code.

Keywords:

high income / high rent deregulation

Court:

Supreme Court, Appellate Division, First Department

Judge:

lower court judge: Hon. Louis York

Date:

January 20, 1998

Citation:

NYLJ, page 27, col 3

Referred Statutes:

Rent Stabilization Code Section 26-504.3(c)

Summary:

Landlord filed a petition for high rent / high income deregulation with the DHCR. The DHCR sent a notice to the tenant requiring the tenant to verify his income, but the tenant did not respond within the requisite period of time. Therefore, the DHCR issued an order deregulating the tenant's apartment. The tenant brought an Article 78 petition in the Supreme Court seeking to overturn the DHCR's order deregulating tenant's apartment. The Supreme Court granted the tenant's petition and remanded the proceeding to the DHCR for further proceedings. The Appellate Division, First Department reversed, thereby upholding the DHCR's order of rent deregulation. The court held that the Rent Stabilization Law and Code required the DHCR to deregulate if the tenant failed to respond to DHCR's request to verify income within the required period. In further support of its decision, the Court cited to Application of Nick v. DHCR, NYLJ, p. 27, col. 5 (App Div, 1st Dept. 11/28/97), where the court previously decided that the high rent / high income provisions of the rent stabilization law and code do not violate due process or equal protection of the laws, even where an order of deregulation is issued due to a tenant's default.

Notes:

For a summary of Application of Nick, see our summary of housing court cases, week of November 24, 1997.

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Case Caption:

In Re Application of Louis Evans v. Ruben Franco

Issues/Legal Principles:

The New York City Housing Authority (NYCHA) must conduct a hearing to determine whether alleged family member can succeed to deceased tenant's Section 8 rent subsidy; deceased tenant's failure to list alleged family member on annual forms is only one factor to consider.

Keywords:

Section 8; rent subsidy; succession rights

Court:

Supreme Court, Appellate Division, First Department

Judge:

lower court judge: Hon. Ira Gammerman

Date:

January 20, 1998

Citation:

NYLJ, page 26, col 5

Referred Statutes:

42 USC Section 1437f; 24 CFR Section 982.151; 24 CFR Section 982.302; 24 CFR Section 982.305; 24 CFR Section 5.403; 24 CFR Section 882.118

Summary:

Louis Evans claims that he lived with Esther Silver (deceased) in an intimate long-term relationship, and therefore the New York City Housing Authority (NYCHA) should grant him succession rights to Silver's Section 8 benefits. Section 8 is a federal program which grants rent subsidies to qualifying low income tenants. According to Section 8 rules, a deceased tenant's "family member" can succeed to a tenant's Section 8 subsidy, instead of starting at the bottom of a long waiting list. Section 8 rules also require the NYCHA to examine the income and family composition of Section 8 tenants on an annual basis. Silver failed to list Evans as a family member on any of these forms. Therefore, when Evans applied to the NYCHA for succession rights (the right to succeed to Silver's Section 8 rent subsidy), the NYCHA denied his application. The Supreme Court ordered the NYCHA to reinstate Evans' Section 8 rent subsidy, because Silver's failure to list Evans on the annual forms filed with NYCHA is only one of many factors to consider in determining succession rights. The Appellate Division, First Department reversed, finding that the Supreme Court should not have ordered the NYCHA to restore Evans' Section 8 benefits. The appellate court ordered that the case be remanded to the NYCHA for a hearing about whether Evans resided with the deceased tenant on a long-term basis and had a family relationship with the deceased tenant.

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Case Caption:

In Re Application of Marc Cohen v. The Department of Housing Preservation and Development

Issues/Legal Principles:

The agency's decision barring tenant's application for succession rights to an apartment is upheld, because tenant did not challenge the decision on a timely basis.

Keywords:

statute of limitations; Article 78; proof of mailing; presumption of receipt

Court:

Supreme Court, Appellate Division, First Department

Judge:

lower court judge: Hon. Bernard Fried

Date:

January 20, 1998

Citation:

NYLJ, page 27, col 5

Referred Statutes:

none cited

Summary:

The Department of Housing Preservation and Development (DHPD), a middle income housing corporation, denied tenant's application for succession rights to an apartment. Tenant filed an Article 78 proceeding in the Supreme Court, but failed to file within the time period set forth in the statute of limitations. DHPD proved that it mailed its decision to the tenant and presented proof of mailing to the court; tenant failed to rebut the presumption of receipt raised by the proof of mailing. The Supreme Court dismissed tenant's Article 78 proceeding for untimeliness, and the Appellate Division, First Department affirmed.

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Case Caption:

River York Holding, Inc. v. Bigman

Issues/Legal Principles:

The rent deposit law does not authorize the court to order the tenant to deposit rent arrears into court; the court is only authorized rent which becomes due after the proceeding is initiated.

Keywords:

rent deposit law

Court:

Appellate Term, 1st Dept.

Judge:

lower court judge: Hon. Anne Katz

Date:

January 20, 1998

Citation:

NYLJ, page 29, col 5

Referred Statutes:

RPAPL Section 745(2)

Summary:

In 1996, pursuant to the former Rent Deposit Law, the trial judge issued an order granting the tenant's request for an adjournment of a nonpayment proceeding on the condition that tenant deposit all outstanding arrears with the court. When tenant failed to comply with this order, the trial judge summarily granted a final judgment of possession without a trial. The Appellate Term, First Department reversed the trial court's decision and vacated the final judgment of possession. The trial judge's decision was incorrect because the former Rent Deposit Law did not authorize the court to order a deposit of all rent arrears. The former Rent Deposit Law only authorized the court to condition a second adjournment upon depositing " . . . all sums as they become due for future rent and use and occupancy." The trial judge also acted incorrectly by granting a final judgment of possession without a trial. If the tenant failed to deposit all future rent with the court, the trial judge should have directed the parties to proceed to trial immediately, rather than grant a final judgment of possession without a trial.

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Case Caption:

Miller v. Milewicz

Issues/Legal Principles:

A partnership cannot bring a holdover proceeding alleging that the apartment is needed for the personal use of the owner or a family member of the owner.

Keywords:

holdover proceeding; owner occupancy

Court:

Civil Court, New York County

Judge:

Hon. Kornreich

Date:

January 21, 1998

Citation:

NYLJ, page 27, col 3

Referred Statutes:

none cited

Summary:

Stuart Miller, an individual, brought a holdover (eviction) proceeding against tenant, alleging that he needed the rent stabilized apartment for the personal use of a family member, namely his son. Tenant brought a motion for summary judgment seeking dismissal of the petition on the basis that the owner is not Stuart Miller, but a partnership known as 47 Jane Street Realty Company. Tenant presented various documents (his lease, lease renewal and rent checks) all of which indicated that 47 Jane Street Realty Company (a partnership) was the owner. Stuart Miller merely presented the court with a copy of a Deed, issued eight years ago, which names Stuart Miller as the grantee (owner). Miller did not explain why the tenant's lease named the partnership as the landlord instead of Miller. The court therefore granted the tenant's summary judgment motion and dismissed the petition, because Miller did not "lay bare his proof" in response to tenant's summary judgment motion.

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Case Caption:

Matter of 87-10 51st Avenue Owners' Corp. v. New York State division of Housing and Community Renewal

Issues/Legal Principles:

An Article 78 proceeding must be brought within sixty days of the date when the DHCR's decision was mailed to the parties.

Keywords:

statute of limitations; Article 78 proceeding; freedom of information law request; service of Article 78 petition and notice of petition

Court:

Supreme Court, Queens County

Judge:

Hon. LeVine

Date:

January 21, 1998

Citation:

NYLJ, page 30, col 5

Referred Statutes:

CPLR Section 7804(f); CPLR Section 3211(a)(2) and (5); Rent Stabilization Law Section 516; Rent Stabilization Code Section 2530.1; CPLR Section 201; NYCRR Section 2530.1; CPLR Section 307, 312-a, 403(c).

Summary:

The Division of Housing and Community Renewal (DHCR) mailed a decision on a Petition for Administrative Review (PAR) on December 26, 1996. Thus, an Article 78 proceeding should have been filed with the Supreme Court on February 24, 1997, within 60 days of the date of mailing of the PAR decision. The landlord did not file an Article 78 proceeding until April 29, 1997, which was 120 days from the date of mailing. The Court dismissed the landlord's Article 78 proceeding because it was not timely filed. The landlord argued that the deadline for filing the Article 78 proceeding should be tolled (extended) because the DHCR delayed in responding to the landlord's request for relevant information and documentation pursuant to the Freedom of Information Law (FOIL). The Court held that nothing in the Rent Stabilization Law and Code or in the Civil Practice Law and Rules (CPLR) permitted the court to extend the 60-day statute of limitations. Moreover, the court found that the DHCR responded to the landlord's FOIL request, and the landlord actually reviewed the file just three days prior to expiration of the 60-day statute of limitations. In addition, the Court noted that the landlord served the notice of petition and petition improperly, thereby depriving the court of jurisdiction.

Notes:

The general rule is that an Article 78 proceeding must be filed within 120 days of the agency's decision. However, the rule is different for DHCR decisions. An Article 78 proceeding must be filed by the losing party within 60 days of the date of mailing of a DHCR decision denying a petition for administrative review. Make a note of this deadline and don't make the same mistake.

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Case Caption:

Waring Barker Company v. Santiago

Issues/Legal Principles:

Landlord must comply with lease provisions in connection with evicting rent stabilized tenant, even if the lease provisions provide the tenant with more rights than tenant has pursuant to the Rent Stabilization Law and Code.

Keywords:

holdover proceedings; nuisance; objectionable conduct

Court:

Appellate Term, First Department

Judge:

lower court judge: Hon. Pierre B. Turner

Date:

January 23, 1998

Citation:

NYLJ, page 25, col 1

Referred Statutes:

RSC Section 2524.3(b)

Summary:

The tenant's lease provided that if the landlord wished to evict tenant based upon tenant's objectionable conduct, the landlord must first serve the tenant with a five-day notice to cure. Then if the tenant did not cure (i.e., cease engaging in objectionable conduct) within five days, landlord could send a termination notice (a notice stating that the tenant's lease is terminated) and then commence a holdover (eviction) proceeding. In this case, the landlord commenced a holdover proceeding against tenant on the grounds of nuisance. RSC Section 2524.3(b). The Rent Stabilization Law and Code does not require a landlord to serve a notice to cure before instituting a holdover proceeding on the grounds of nuisance; the landlord need only serve a termination notice. The trial court found that tenant's behavior constituted a nuisance and evicted tenant. The appellate court reversed. The appellate court held that the nuisance complained of was really "objectionable conduct" as that term is defined in the tenant's lease. Therefore, the landlord should have served the tenant with a five-day notice prior to commencing the holdover proceeding. The landlord failed to do so and therefore the appellate court dismissed the holdover petition and vacated the judgment of possession. The court explained that it is not enough for the landlord to comply with the Rent Stabilization Law and Code (here, the provision which allows eviction on the grounds of nuisance). The landlord must also be sure to give tenants all of their rights pursuant to the lease, even if the lease gives the tenants more rights than they have under the Rent Stabilization Law and Code.

Case Caption:

Port Chester Housing Authority

Issues/Legal Principles:

Fire damage expenses does not constitute "additional rent."

Keywords:

rent

Court:

Appellate Term, 2nd & 11th Judicial Districts

Judge:

lower court: Hon. Sisca

Date:

January 12, 1997

Citation:

NYLJ, page 30, col 1

Referred Statutes:

none cited

Summary:

Landlord brought a nonpayment proceeding seeking $2,292 in "additional rent." In fact, the monies represented the expenses incurred in repairing fire damage in tenant's apartment plus late fees and service charges. Tenant moved to dismiss on grounds that the sums sought did not constitute additional rent. Although the lease signed by tenant required tenant to pay for property damage caused by tenant, it did not provide that this obligation would constitute additional rent -- which would make her home vulnerable to landlord's dispossess proceeding to collect the rent. The appellate court therefore reversed the lower court and ruled that the petition should have been dismissed.

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Case Caption:

ACP 305 East 72nd St. Assoc. v. Kokkinogoulis

Issues/Legal Principles:

Landlord failed to show that tenant's chronic non-payment was a result of "aggravating circumstances" such as intentional harassment by the tenant.

Keywords:

chronic non-payment; nuisance

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Arlene Hahn

Date:

January 13, 1998

Citation:

NYLJ, page 25, col 1

Referred Statutes:

none cited

Summary:

Landlord brought a nuisance holdover premised on the tenant's chronic late payment of rent. To succeed the landlord must make a showing of "aggravating circumstances" to support an eviction. Appellate Term reversed the lower court, finding that the standard was not met by the landlord, particularly in light of the lower court's finding of "an absence of any indication of intent to harass by the respondent." The Appellate Term held that it was improper for the trial judge to have imposed a "probationary period" in the order and judgment after trial. The Court permanently stayed the execution of the warrant.

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Case Caption:

River York Holding v. Bigman

Issues/Legal Principles:

Agent who signed lease may testify in court about the agency relationship with landlord.

Keywords:

agents

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Margaret Taylor

Date:

January 13, 1998

Citation:

NYLJ, page 25, col 2

Referred Statutes:

none cited

Summary:

The lower court refused to allow the landlord's managing agent to testify on landlord's behalf regarding their agency relationship. The agent had executed the lease with the tenant. The Appellate Term reversed holding "While the extrajudicial declarations of an agent are generally not admissible against a principal to establish the fact of the agency, that rule has no application to bar the in-court testimony of the agent called on the landlord's own case." The court remanded the case for a trial since the lower court effectively precluded landlord from establishing its prima facie case.

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Case Caption:

Patmund Realty Corp. v. Cheong

Issues/Legal Principles:

Respondent fails to establish succession rights claim as non-traditional family member

Keywords:

succession rights; rent control; non-traditional family member

Court:

Appellate Term, First Department

Judge:

lower court: Hon. Arlene Hahn

Date:

January 13, 1998

Citation:

NYLJ, page 25, col 3

Referred Statutes:

9 NYCRR 2204.6(d)(3)

Summary:

The Appellate Term upheld the lower court's ruling that the respondent failed to establish the statutory criteria for succession to the rent controlled apartment as a non-traditional family member. The court found an absence of documentary proof to demonstrate joint ownership of property, intermingling of finances or formalizing of legal obligations. Nor did the court find persuasive evidence of consistent attendance at family functions or celebrations. The Appellate Term wrote: "While there is no dispute that the respondent resided in the apartment for the period claimed, the record shows that the tenant's family home was actually in Astoria, Queens at the time he is alleged to have lived with respondent and her husband in the small East Broadway apartment premises." Respondent's widow testified that the Queens apartment was sold in 1972 because the family required more space. Rather than living openly in the apartment as the tenant, respondent lived there under the subterfuge of being a family member of the absent tenant. The subterfuge allegedly involved her name on the annual occupancy affidavits as the tenant's wife (not "adopted" daughter) and the rent continued to be billed and paid in the name of the tenant. Justice Helen Freedman dissented from the majority's holding to grant possession to the landlord. She found it indisputable that the respondent resided in the apartment since 1975 when she arrived from Hong Kong and moved in with the tenant of record, who has since died. The respondent claimed that the tenant of record adopted her according to Chinese custom and she uses his name. She married 6 months later and her husband moved in with her and the tenant of record. Then the respondent's older children came from Hong Kong in or about 1980. In or about 1975 the prime tenant and his wife moved to Queens and neighbors agreed that he stayed part time at the apartment with the respondent and her husband until 1980 because he worked in New Jersey. The respondent's name was listed on the annual occupancy affidavits, respondent personally delivered money orders to the landlord on numerous occasions, and she personally requested that repairs be made. Her older children and a child born while at the apartment grew up in the premises. Except for formal adoption papers, Justice Freedman believed that all evidence indicates that there was a non-traditional family relationship here. To evict one who has openly and notoriously resided in a premises as tenant for 22 years, who has raised a family there and whose presence landlord has been or should have been aware of is "unjust," according to Justice Freedman.

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Case Caption:

Doyno v. DHCR

Issues/Legal Principles:

DHCR decision which deregulated tenant's apartment based on luxury deregulation because tenant allegedly did not submit proof of income in a timely fashion is reversed since tenant's affidavit claimed timely compliance.

Keywords:

luxury deregulation

Court:

Supreme Court, New York County

Judge:

Hon. Lewis Friedman

Date:

January 14, 1998

Citation:

NYLJ, page 26, col 2

Referred Statutes:

RSC 2527.8

Summary:

The petitioner-tenant began an Article 78 proceeding to vacate a DHCR decision which deregulated his apartment on grounds of luxury decontrol. The landlord filed a petition for High Income Rent Deregulation in 1995 with DHCR. DHCR then sent tenant on August 18, 1995 an Answer Form which stated that the tenant's answer must be sent to DHCR within 60 days or an order of deregulation would issue. In May, 1996 DHCR issued an order of deregulation based on tenant's failure to provide income verification information (i.e., tax returns). The order was mailed to tenant by certified mail, return receipt requested. On May 30, 1996, the tenant sought reconsideration of the decision and also filed a PAR (appeal) of the decision. In the petition for reconsideration the tenant annexed copies of an answer to the petition which contained the necessary information, dated September 19, 1995, which the tenant swore he had mailed to DHCR on that very date, within the 60 day time period for responding to the landlord's deregulation application. At the PAR stage the tenant submitted an affidavit stating that he had timely mailed his answer and attached certified copies of his tax returns for 1993 and 1994 showing that his income was less than $40,000 a year. The Commissioner denied the tenant's PAR and ruled that the tenant failed to submit proof of mailing, such as a post office stamped certificate of mailing or certified mailing receipt. The Commissioner refused to vacate the decision deregulating the apartment. The tenant appealed to the Supreme Court by way of an Article 78 asserting that the DHCR's refusal to vacate the deregulation order was arbitrary and capricious. The judge held that the instructions accompanying the Answer Form sent to tenants do not specify that the tenant must provide proof of mailing where the mailing is sent by ordinary mail. The instructions require proof of mailing only where the answer is sent by private postage meters and DHCR did not receive it. The judge held that the DHCR wrongly applied a provision of proof of mailing concerning metered mail to the tenant's case which pertained to simply ordinary mailing. The judge also noted that DHCR refused to conduct an inquiry to determine whether the tenant's default resulted from DHCR's own procedures (i.e., losing the answer) or if the tenant's affidavit was actually correct and he in truth timely mailed his answer. The court noted that this is not a case where the tenant was confused and inadvertently missed the 60 day deadline filing and seeks excusal from the default, but rather this is a case where the tenant asserts timely compliance. Additionally, the court noted that the tenant's income was nearly $200,000 below the threshold level to deregulate an apartment. The court determined that DHCR's refusal to vacate the tenant's alleged default was arbitrary and capricious and reversed the DHCR's decision.

Notes:

Tenants facing applications from the landlord to deregulate their apartment on grounds of high rent are advised to either personally deliver their response to DHCR or obtain proof of mailing from the post office in order to avoid the Kafkaesque experience this tenant faced.

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Case Caption:

Matter of Nestor v. DHCR

Issues/Legal Principles:

For purposes of luxury deregulation, DHCR cannot look to the income of tenant's corporation who occupies the apartment when the tenant is the leaseholder.

Keywords:

luxury deregulation; corporate primary residency

Court:

Supreme Court, New York County

Judge:

Hon. Colleen McMahon

Date:

January 15, 1998

Citation:

NYLJ, page 28, col 6

Referred Statutes:

Rent Regulation Reform Act of 1993

Summary:

The landlords sought to deregulate Apartment 2B in the building on grounds that the occupants of the apartment had a total annual income of more than $250,000 for two consecutive years (amended on June 19, 1997 to $175,000). The legal regulated rent of the apartment is over $2,000. The tenant of record and leaseholder to the apartment is Thomas Britt, a well- known interior decorator. He owns several lavish homes in the Hamptons and moves in social circles of the rich and famous. His lease contains a provision that permits him to operate his interior design business, Thomas Britt, Inc., from his apartment. The corporation occupies the apartment and pays the rent through checks from the corporate account. Although the corporation is not listed as a tenant on the lease, Thomas Britt Inc. is clearly operating in a residential space with the permission of the landlord. It is not clear from the record if Mr. Britt even lives there. The record before DHCR indicates that Mr. Britt uses his corporation as an alter ego, i.e., funneling what would otherwise be personal expenses through the corporation which pays them and then deducts them as business expenses. The landlord first tried to deregulate the apartment in 1995 but lost on grounds that Mr. Britt's income did not exceed $250,000 in each of the two preceding years. On appeal the landlords argued that the DHCR failed to consider the tax returns of all persons in occupancy of the apartment when determining the aggregate annual household income. The "person in occupancy" whose income had allegedly been overlooked by DHCR was Mr. Britt's corporation. The landlords lost on appeal because they didn't raise the issue to the DHCR. Now the landlords have come back a second time to seek deregulation of the apartment and demanded that the DHCR squarely address the issue. DHCR again denied the application because Mr. Britt's tax returns were less than $250,00 for each of the preceding two years. DHCR did not obtain certification of the corporation's income or regard the corporation as Mr. Britt's financial alter ego. On PAR, the Commissioner ruled that the Rent Stabilization Law does not allow for the inclusion of corporate income in determining the aggregate income of persons occupying the apartment for purposes of high income deregulation. The Commissioner held that under the RSL a person means a natural person and not a corporate entity. In other words a corporation cannot be deemed to occupy an apartment as its primary residency. If a corporation is named in the lease as a tenant, the corporation is not entitled to a renewal lease. The Commissioner held that high income deregulation laws were not meant to include the income of corporate tenants in determining the total annual income of the household. The landlords appealed the PAR decision and the Supreme Court judge upheld stating that she could not hold that the decision was arbitrary or capricious. The judge did, however, disagree with the DHCR's analysis that a corporation cannot be a "person" who occupies a "housing accommodation" as its "primary residence." She found that Thomas Britt, Inc. is a "person" under legal definitions who clearly "occupies" the apartment and that a corporation can be deemed to occupy an apartment as its "primary residence" if it has its principal place of business at the apartment, as this corporation does. She also noted that DHCR's own guidelines provide that where a corporation is on the lease as the tenant of record, DHCR should look to the occupant's income for luxury deregulation purposes. Thus, the court concluded that she would reverse DHCR's decision as arbitrary if the matter rested at this point. However, the analysis must go further because DHCR argued that it was not required to verify the income of Thomas Britt, Inc. because the Legislature did not provide under the luxury deregulation law a way to obtain either certification (from the tenant of record) or verification (from the State Department of Taxation and Finance) of a corporate occupant's income. In an application to deregulate an apartment on grounds of high income, to determine a tenant's income DHCR asks the tenant to certify that the total annual income of all qualifying occupants is either greater or less than $250,000. DHCR confirms this certification by asking the Department of Taxation and Finance to verify that the tenant's income certification is correct. DHCR is not permitted to ask the tenant for additional information and the Department is not permitted to provide any. The income verification is based on "federal adjusted gross income" (i.e., income before itemized deductions) and is applicable only to individuals, not corporations because corporations do not have a federal adjusted gross income. Thus, on its face the legislative scheme fails to provide DHCR or the Department a vehicle for verifying the income of corporations. In New York State, corporations must report all expenses; corporate taxpayers are not required to report income prior to deductions. And yet, the latter is what the DHCR is supposed to verify for luxury deregulation purposes. Since the Legislature did not provide a way to verify a corporate occupant's income, coupled with the fact that there is no logical way for the Department of Taxation and Finance to comply with the income verification mandate where corporations are concerned, compelled the court to conclude that the Legislature did not intend to encompass corporations within the reach of luxury deregulation laws. The judge found the result in this case seemingly unfair, but ruled that DHCR was not allowed to pierce the corporate veil to determine the financial relationship between Thomas Britt and his corporation.

Summary:

The outcome of this case is outrageous because this wealthy person is clearly abusing the rent laws and this reflects badly on tenants rights in general. Landlords can say based on this case: "See what tenants get away with." In fact, the more apt response is: "See what the filthy rich get away with." Thomas Britt lives a lavish lifestyle behind a corporate facade and then has the audacity to report income less than $250,000 in order to maintain a rent stabilized apartment. People like him are not allies to the cause of tenants' rights nor to the struggles of working people who honestly pay their taxes.

Case Caption:

Simkowitz v. Farello

Issues/Legal Principles:

The Rent Deposit Law may only be applied to proceedings initiated on or after October 17, 1997, the effective date of the law.

Keywords:

rent deposit law

Court:

Civil Court, Bronx County

Judge:

Hon. Heyman

Date:

January 5, 1998

Citation:

NYLJ, page 23, col 3

Referred Statutes:

RPAPL Section 741 (Contents of Petition); RPAPL Section 745(2) (Rent Deposit Law)

Summary:

The Court determined that the Rent Deposit Law - RPAPL Section 745(2) - does not apply to this nonpayment proceeding, which was initiated prior to 10/17/97, the effective date of the Rent Deposit Law. The Rent Deposit Law may only be applied to proceedings initiated after October 17, 1997, the statute's effective date. The judge noted that the statute required court administrators to (1) draft language which landlords must include in the notice of petition if they intend to apply to the court for a rent deposit and (2) establish a system of recording whether the landlord or the tenant made an adjournment request. Court administrators did not take these required steps until about October 17, 1997, and therefore, as a practical matter, the statute could not take effect until Monday October 20, 1997. The tenant made a motion to dismiss the petition based upon the fact that the landlord included the language of the Rent Deposit Law in the notice of petition. The court declined to dismiss the case for this reason, stating that the tenant will not be prejudiced because the Court will not apply the Rent Deposit Law to this proceeding.

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Case Caption:

Lio v. Gorbea

Issues/Legal Principles:

A notice of non-renewal issued to an elderly or a handicapped person should contain a specific order of relocation equivalent or superior to housing accommodations at the same or a lower regulated rent in a closely proximate area.

Keywords:

notice of non-renewal; personal use holdover proceeding

Court:

Civil Court, Kings County

Judge:

Hon. Finkelstein

Date:

January 7, 1998

Citation:

NYLJ, page 25, col 1

Referred Statutes:

RSC Section 2524.4; RPAPL Section 741(4)

Summary:

The landlord served a handicapped tenant and his 92 year old mother with a notice that the lease for their ground floor garden apartment would not be renewed. The notice stated (1) that the lease was not being renewed because the landlord needed the apartment for the personal use of himself and his family and (2) included a general offer that the "landlord is willing to accommodate you with another apartment in the building."

The landlord made an offer to relocate the tenants because the rent stabilization law and code permits "personal use" evictions of handicapped and elderly persons only if an equivalent or superior accommodation is provided to the tenant.

RPAPL Section 741(4) requires that every petition state the facts upon which the proceeding is based. Pursuant to RPAPL Section 741(4), the tenant made a motion to dismiss because the landlord's notice of non-renewal did not (1) specifically describe the apartment which was allegedly being offered to the tenants and (2) did not specifically identify the family members of the landlord who required the apartment.

The court granted the tenant's motion to dismiss on the grounds that the notice of non-renewal did not specifically describe the apartment being offered to the tenants. the notice of non-renewal should have identified the apartment being offered, including the location of the apartment (what floor), the size of the apartment, the number of rooms, the amenities contained in the apartment, a statement as to whether the apartment is vacant or when the apartment will become vacant, and assurance that the apartment would be as suitable for the 92 year old tenant and her disabled son as the ground floor garden apartment they presently occupy.

Note:

This is a very good case for tenants because the judge held that an owner occupancy notice must be very specific and he specified the type of details that he believes such a notice should contain. No case reported has ever held a landlord to such a particularzed pleading in these types of notices. Such notices tend to be rather vague. Let us hope this case sets a precedent because tenants faced with owner occupancy proceedings often must make motions requesting discovery to ascertain detailed facts regarding the landlord's personal use intentions, and often these motions get denied. It is difficult and unfair for tenants to defend themselves in these types of cases if they are kept in the dark about the extent of the landlords intentions and only learn the details in the midst of trial.

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Case Caption:

Matter of Mayo v. Roberts

Issues/Legal Principles:

A proceeding pursuant to Article 78 of the CPLR must be brought within four months of DHPD's administrative decision to terminate the tenancy of a Mitchell Lama tenant; tenant's mental disability is not "insanity" and therefore does not serve to extend the four-month statute of limitations.

Keywords:

Mitchell Lama; termination of tenancy; mental disability; Article 78

Court:

Supreme Court, New York County

Judge:

Hon. Saxe

Date:

January 6, 1998

Citation:

NYLJ, page 22, col 2

Referred Statutes:

CPLR Article 78; CPLR Section 208

Summary:

The apartment which is the subject of this proceeding is located in a Mitchell-Lama building. Therefore, pursuant to the Mitchell-Lama law, a tenant can only be evicted in housing court after a hearing before an administrative hearing officer of the Department of Housing Preservation and Development of the City of New York ("DHPD"). An administrative proceeding was brought against tenant because of allegations that he verbally and physically assaulted various tenants and harassed one tenant. A team from DHPD visited the tenant and they observed bullets on his dresser and he threatened to shoot people. He then spent a few months in a mental hospital. On January 29, 1997, following a hearing, the DHPD administrative law judge made a decision terminating his tenancy. The landlord then brought a holdover proceeding and the housing court awarded the landlord a final judgment of possession on September 17, 1997. The tenant then brought an Article 78 proceeding to challenge DHPD's determination dated January 29, 1997. The court dismissed the tenant's Article 78 challenge because it was brought after the four-month statute of limitations had passed. The court rejected the tenant's argument that the statute of limitations should be tolled (extended), in accordance with CPLR Section 208, by reason of the tenant's insanity. The court held that the tenant's mental disability is not the type of insanity which would prevent his functioning in society. The fact that he brought the Article 78 proceeding pro se (without representation) persuaded the court that he does not have an inability to function.

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Case Caption:

Wlizlo v. Guich

Issues/Legal Principles:

Tenants prove succession rights to rent controlled apartment by making a summary judgment motion and presenting documentation that the apartment was used as their primary residence for at least two years prior to death of original rent controlled tenant.

Keywords:

rent control; decontrol; succession rights; summary judgment motions; frivolous conduct; costs and sanctions

Court:

Civil Court, Kings County

Judge:

Hon. Rodriguez

Date:

January 6, 1998

Citation:

NYLJ, page 22, col 2

Referred Statutes:

CPLR Section 3212; 22 NYCRR Section 130-1.1; 9 NYCRR Section 2204.6(d)(3)(i)

Summary:

Landlord brought a holdover proceeding against tenants alleging that the apartment is decontrolled because the rent-controlled tenant vacated after June 30, 1971. The landlord argued that since there is no lease in effect and the apartment is located in a three-family house, it is therefore not subject to further rent regulation. The tenants made a motion for summary judgment. The apartment was occupied by Emelio and Ellen DiBenedetto since 1962. Emelio moved out but Ellen resided in the apartment until her death in 1989. In 1981, Deborah Guido, her husband and two children moved in with her mother and they continued to live there after her mother's death in 1989. Since they lived in the apartment as their primary residence for at least two years prior to the death of the original rent-controlled tenant, and they were family members entitled to succession rights in accordance with rent control regulations (daughter and her family) they claimed an entitlement to remain as rent-controlled tenants pursuant to the rent control regulations, specifically 9 NYCRR Section 2204.6(d)(3)(i). They submitted many documents to show that the subject apartment was the family's primary residence, including records from the Board of Education to show that their children were attending have been attending the local school since at least 1986 and copies of tax returns for the years 1985 through 1989 which list the subject apartment as their primary residence. The court noted that the opponent of a summary judgment motion is required to show that there is a factual issue requiring trial by presenting evidence to the court. The landlord did not present any evidence to the court. Therefore, the court granted summary judgment to the tenants and dismissed the holdover petition, because the tenants had demonstrated that they had succession rights and were entitled to remain in the apartment. The tenants also asked the court to impose sanctions against the landlord for frivolous conduct pursuant to 22 NYCRR Section 130-1.1. The frivolous conduct alleged is that the landlord proceeded against the tenants even though the landlord knew that tenants had a right to remain. The court scheduled a hearing for the determination of this issue.

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Case Caption:

2612 Hotel Corp. v. Silver

Issues/Legal Principles:

Tenant's challenge to owner's alleged non-compliance with DHCR rent registration requirements more than four years ago, will not be considered by the Court due to the four-year statute of limitations enacted by the Rent Regulation Reform Act of 1997.

Keywords:

rent overcharge; statute of limitations; Rent Regulation Reform Act of 1997

Court:

Civil Court, New York County

Judge:

Hon. Shulman

Date:

January 8, 1998

Citation:

NYLJ, page 24, col 6

Referred Statutes:

NYC Administrative Code Sections 26-516(a)(i) and 26-517(e); RSC Section 2528.4; CPLR Section 213-a

Summary:

Landlord brought a nonpayment proceeding against rent-stabilized hotel tenant. Landlord's petition alleged that landlord was in compliance with the rent regulations (i.e., the requirement to file annual registration statements with the DHCR). Tenant moved to dismiss the landlord's petition alleging that the landlord's petition was incorrect because (1) the landlord did not file an annual registration statement in 1988 and (2) the rent increased inexplicably in registration year 1992 compared with the prior year. The landlord opposed the motion to dismiss, citing NYC Admin Code Section 26-516(a)(i). This statute, as amended in 1997, adopts a four-year statute of limitations for all rent overcharge and rent registration complaints. The tenant pointed out that NYC Adm. Code Section 26-517(e) provides that if the landlord does not file an annual registration statement, the landlord cannot collect any rent in excess of the rent stated in the prior annual registration statement. The tenant argued that the legislature did not amend this section in 1997 and that it was still the law. Thus, the landlord's failure to file a registration statement in 1988 meant that the rent should be rolled-back to the rent set forth in the 1987 statement. The court rejected this argument and denied the tenant's motion to dismiss, stating that "the legislative history behind the 1997 amendment to NYC Adm. Code Section 26-516(a)(i) makes it crystal clear that this statutory change was specifically intended to close the door to an examination of missing, incomplete, substantively erroneous and/or unserved initial and/or annual registration statements preceding a four-year period of continuously filed and unchallenged rent registration statements."

Note:

In a reading of the new law, it seems to be silent on situations where a landlord has filed NO registration within the past immediate four years. Tenants in this factual pattern should take the opportunity to file an overcharge (or counterclaim in a nonpayment proceeding) and challenge the new law on this issue.

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Case Caption:

Smith v. Maya

Issues/Legal Principles:

Tenant, who filed an oral answer to a petition, has waived the right to raise the issue of whether she was properly served with the notice of petition and petition and the three-day rent demand.

Keywords:

improper service; traverse; waiver; motion to amend answer; motion to dismiss

Court:

Civil Court, Kings County

Judge:

Hon. Ava Alterman

Date:

January 8, 1998

Citation:

NYLJ, page 25, col 5

Referred Statutes:

CPLR Section 3211(a); RPL Section 234; CCA Section 1906-a; RPAPL Section 743

Summary:

The unrepresented tenant orally answered the nonpayment petition and the clerk noted on the file "dispute amount." The tenant then retained an attorney and the attorney served an amended answer and counterclaims upon the landlord. The amended answer included the defense that the notice of petition and petition had not been properly served (lack of personal jurisdiction) and that the three-day rent demand had not been properly served (lack of subject matter jurisdiction). The landlord moved to strike the tenant's defenses of improper service. The Court granted the landlord's motion to strike because these defenses because they should have been interposed when tenant first appeared and submitted her oral answer. If these defenses are not interposed in a timely manner, they are waived.

Note:

This is a terrible and unfair decision for tenants. A tenant should not be expected to know that if they fail to raise the issue of improper service on their first appearance in court, that they have forever waived a challenge on this ground. This holding seems inconsistent with RPAPL 745 which permits a pro se tenant one adjournment to consult with an attorney without triggering the rent deposit provisions of that law. Although RPAPL 745 does not address the raising or waiving of personal jurisdiction defenses, its language relating to tenants seeking counsel should be used as a basis not to penalize a pro se tenant for neglecting to know the law.

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