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Lal Little Italy MGMT. Co, LLC v. De Corcho

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Lal Little Italy MGMT. Co, LLC v. De Corcho

Postby TenantNet » Tue Sep 15, 2015 9:52 am

Lal Little Italy MGMT. Co, LLC v. De Corcho
51688/14

September 15, 2015

Cite as: Lal Little Italy MGMT. Co, LLC v. Aldrete, 51688/14, NYLJ 1202737081842, at (Civ., BX, Decided September 2, 2015)

CASENAME

Lal Little Italy MGMT. Co, LLC, Petitioner v. Alain Perez De Corcho Roberto Aldrete, Respondents

51688/14

Judge Michael Pinckney
Read Summary of Decision
Decided: September 2, 2015
DECISION/ORDER

The petitioner commenced this non-payment proceeding by Petition and Notice of Petition dated September 5, 2014.

Reference is made to the Decision and Order of the Hon. Marian C. Doherty, dated March 24, 2015 setting forth the procedural history to date. The proceeding has been transferred to this Court for a trial, and after several conferences the parties agreed for this Court to decide on a legal issue predicated upon undisputed facts.

Background

As set forth in the stipulation drafted by both counsel on June 26, 2015, this Court is to make "a determination on the following legal issue: Was petitioner permitted to rescind the 'discount rent' during the lease based upon alleged failure to timely pay rent".

The following facts are not disputed:

The registered monthly rent for this rent stabilized apartment is $1,930.39.

The preferential monthly rent is set at $1,607.85.

The lease contains a "Discount Rider" providing for a reduced rate of $1,400.00 per month as long as the rent is "received by the 5th of the month". Otherwise, the preferential amount of $1,607.85 per month applies.

Both parties have had an opportunity to brief the issue: respondents in there reply affirmation to the earlier motion, and petitioner in a memorandum dated May 15, 2015.

Respondent argues that the discounted rent provision "is nothing more than a scheme designed to circumvent the Rent Stabilization Law, and to unlawfully raise the monthly rent during the lease term". Respondent relies on the Appellate Term decision in Park Haven LLC v. Robinson, 45 Misc.3d 129(A)(App Term 2nd Dept. 2014).

Petitioner argues that the facts herein are distinguishable from Park Haven, emphasizing two main points. First, the discount in Park Haven was a much more substantial discount, reducing the rent from $2,509 to $1,449 — a reduction of over 42 percent. The reduction under this discount is under 13 percent. Second, petitioner argues that the rent herein has already been reduced with a preferential amount, and the discount is a negotiated agreement on top of the preferential amount — and if the discount is removed based upon a late payment, the respondent is still paying a reduced preferential amount.

Discussion

While the parties cite to a number of cases to support their position, Park Haven LLC v. Robinson is the only appellate authority involving a rent stabilized residential tenant.

Petitioner is correct that the discount in Park Haven was much larger, both in terms of dollar amount and proportionate to the higher non-discounted rent. Furthermore, the tenant in Park Haven did not have a preferential rent as the respondent herein.

The Appellate Term did find the discount provision constituted an "unconscionable late charge and penalty, in that the increase is excessive and grossly disproportionate to any damages that could be sustained as a result of tenant's failure to pay rent on time".

The discount before this Court is over $200.00 per month — and this is on top of late fee provision of $50.00 per month as per paragraph ten of the lease and an enforceable attorney fee / expense provision in paragraph eighteen.

Under these circumstances, the petitioner has not shown how an increase of over two hundred dollars per month is proportionate to any damages that could be sustained as a result of tenant's failure to pay rent on time — which under the Discount Rider could be deemed untimely if received just one day late.

Accordingly, the Court is constrained to follow the applicable appellate case law herein and rule that petitioner was not permitted to rescind the discounted rent herein.

The Court makes no determination at this time on whether petitioner's reliance on the above distinctions would absolve it from any finding of intentional overcharge, although the Court would note that it did find petitioner's arguments compelling, if not persuasive.

This constitutes the decision and order of this Court.

A copy of this order and decision will be mailed to all parties.

This proceeding will appear on the Court's calendar for conference on September 29, 2015 at 9:30 Part H, Room 560. This date has been chosen by the Court without conferring with the parties — if due to scheduling issues another date is desired, parties may contact the court attorney for the part and arrange a change on consent.

Date: September 2, 2015
Bronx, New York
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