Pataki's Rent Deposit Law is Unconstitutional

by Judith Goldiner

The Rent Regulation Reform Act of 1997 is unconstitutional and unwise.

Let’s see why.

• An elderly woman who uses a wheelchair withholds rent payments because she is being charged an illegally high rent and because her apartment has no heat and hot water. Her landlord sues her in Housing Court. She sends a friend or relative to answer the petition, but misses her first court date because the ambulette does not pick her up on time. Under the new rent law, the court must evict her unless she can show that she paid the landlord the full amount of the judgment (including the overcharge and the amount paid for heat) or is prepared to deposit it with the court.
• A woman and her two children receive public assistance. The $286 monthly rental allowance she gets from the state Department of Social Services is far less than her actual rent of $400. After she is sued in Housing Court, she consults with a community organization that tells her about a case called Jiggetts v. Dowling, which will require DSS to pay her full rent directly to the landlord. She goes to court and agrees to pay all rent claimed due.

DSS provides a letter explaining that the rent arrears will be paid, but that additional time is needed to process the payment. Under the new rent law, the court must evict her even though DSS has agreed to pay all the rent in order to prevent the family from becoming homeless. Even if DSS pays it, but does so after the eviction warrant has been issued, the court cannot stay the family’s eviction.

• A tenant who is hearing-impaired loses his job and applies for public assistance. While awaiting approval of his request for public assistance and back rent, he is sued in Housing Court. The judge adjourns the case for 30 days so the tenant can obtain a sign-language interpreter.

Under the new law, the tenant will be required to deposit ongoing rent in court once those 30 days have elapsed. Thus, he must deposit his monthly rent with the court just to get a hearing on whether that amount (or any amount) is actually due. If the tenant cannot make the deposit (such as if his application for public assistance has not been processed), the Housing Court judge must automatically order his eviction.

These are just a few examples of people who will be harmed by the changes slipped into housing law in the rent-controls compromise. These changes apply to all housing in New York City, not merely to rent-regulated housing. They will dramatically increase homelessness in the city.

Last year, 318,305 landlord-tenant cases were filed in the city’s Housing Courts, and there were 148,000 requests by tenants to stay a judgment. Even if only one-quarter of these tenants were evicted because they could not post the entire judgment and obtain a stay of eviction, 37,000 additional tenant households will lose their homes.

The vast majority of tenants sued in Housing Court have very low incomes. An early-90s survey found that 47% had incomes below $10,000 per year, and 82% made less than $25,000. They often fall behind in their rent due to a temporary emergency -- a death in the family or the loss of a job.

These tenants often require some assistance in order to pay back money owed. Equally often, they get it. But such assistance usually cannot be obtained within the five-day period that the new rent law allows. Thus many tenants will be evicted, landlords will lose rent money, and the government will spend great deal of money housing tenants in inadequate shelters. Everyone loses.

The new law will discriminate against the elderly and people with disabilities, people who often need more time to navigate a confusing and chaotic court. Non-English speaking tenants will risk losing their chance to present defenses because of the time it takes to get an interpreter. It will also impair tenants’ ability to contest a landlord’s claims. Getting the materials to prove an illegal overcharge, that the rent’s been paid, that they’ve paid for repairs, or defenses based on warranty of habitability or illegal conversion, often takes more than the 30 days the new law allows.

The only justification that the landlords and their allies have raised for these changes is that Housing Court proceedings are often delayed. Even their own research undermines these claims. A 1995 study commissioned by the Rent Stabilization Association found that over 50% of cases are resolved in two months or less.

A quick summary of the new law reveals how extreme its provisions are.

• If for any reasons a case is 30 days old, or has been adjourned twice (except at the landlord’s request), and the tenant does not make the deposit, they are not allowed to present a defense before being evicted. The landlord doesn’t have to prove anything. If the tenant misses a later deposit for any reason, the court must order an immediate trial at which the landlord’s pleadings are deemed true and only the tenant’s defenses are at issue. The trial cannot be postponed without the landlord’s consent.

This is a radical change from the previous law, which gave the court discretion to waive a rent deposit "for good cause shown," where there are immediately hazardous conditions in the premises, or where the tenant requested time to obtain an attorney. The only exemptions now are on very narrow grounds -- for example, if the tenant can prove that the landlord is not the owner of the building. Proving even this limited defense would be extremely difficult for the more than 90% of tenants who are unrepresented in Housing Court.

• The new rent law also provides that when a tenant has appeared, the court has issued a judgment, and more than five days have elapsed, the court cannot stop an eviction or prevent the owner from re-renting the apartment after an improper eviction unless the tenant can show that the judgment amount has been paid or will be deposited with the court. The court has no power to issue a stay where a tenant has a legitimate excuse, such as hospitalization, unpaid child support, or even having paid the judgment after the warrant was issued.

These radical changes are not only bad public policy. They are unconstitutional.

Violation of Due Process: New York law makes a tenant’s obligation to pay rent contingent on the landlord’s compliance with certain legal obligations, including the statutory and implied warranties of habitability and prohibitions on rent overcharges. Accordingly, facts pertaining to the warranty of habitability, rent overcharge, and any other legal defenses are essential elements in Housing Court proceedings. If a tenant is evicted without the court considering these facts, there is a substantial probability that they will be wrongly deprived of property. In light of the magnitude of this risk of error and the tenant’s very substantial interest in avoiding homelessness, due process requires a hearing on these defenses prior to any eviction.

By prohibiting consideration of good cause for waiving any deposit, the new rent law forbids consideration of relevant facts prior to eviction in any case where the tenant cannot post the deposit demanded. Since the amount demanded is often itself the issue in dispute, this prohibition would violate due process of law.

Violation of the Separation of Powers: The new rent law also unconstitutionally invades the independence of the judiciary. The principle of separation of powers bars the state Legislature from interfering with inherently judicial functions or abridging the court’s constitutional powers. One such inherent judicial power is the courts’ power to regulate their own proceedings, including the power to commence and/or stay trials and hearings. By denying the courts the power to issue stays unless the defendant pays what the person suing them has demanded, the new law breaches the separation of powers between the legislative and judicial branches.

Violation of Equal Protection: Exposing low-income tenants to eviction by deriving them of a chance to be heard on claims available to all others just because they cannot immediately deposit the disputed amount into court denies them equal protection under the law.

By depriving tenants of the ability to assert defenses and depriving New York City courts of the discretion to stay proceedings, the new law tips the scale of justice further in favor of the landlords. Tenants have long suffered in an unfair and grossly unjust system in which over 90% of tenants are unrepresented and over 90% of landlords have counsel in a court where 35 judges hear over 300,000 cases. The proposed changes will ensure that tenants will have no opportunity to present their defenses in a fair process and will have only the opportunity to be swiftly evicted.