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.

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.

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.