TenantNet Forum

Where tenants can seek help and help others



Change of Ownership effect on Rental Arrears.

NYC Rent Regulation: Rent Control/Rent Stabilized, DHCR Practice/Procedures

Moderator: TenantNet

Change of Ownership effect on Rental Arrears.

Postby truth only » Fri Nov 10, 2017 6:06 pm

I live in a rent stabilized building. It has recently been sold to a new owner, who also brought in a new management company.

Can the new owner collect on the rental arrears owed to the old owner? Is there any case law on this?

On a previous non-payment proceeding with the old owner (management company) they failed to produce an original lease, but the judge asked me if I wanted to remain in occupancy and therefore allowed them to proceed without one.

Thank you
truth only
 
Posts: 1
Joined: Fri Nov 10, 2017 5:58 pm

Re: Change of Ownership effect on Rental Arrears.

Postby TenantNet » Fri Nov 10, 2017 6:26 pm

There are no rent stabilized building, only rent stabilized apartments.

It can get complicated, but yes, a new owner can seek all outstanding rent. In a court proceeding, it would be subject to any defenses or counterclaims, and claims of incorrect rent. The statute of limitations for seeking back rent is 6 years. I would scrutinize any rent demand or rent bills very carefully to make sure they have the correct rent for the correct months. In many instance, the records are sloppy.

We can't say if the outcome of a prior case would impact current outstanding rent. In general in a housing court proceeding, the owner must plead the status of an apartment and that the respondent is indeed a tenant. That is often done with a lease, DHCR registrations and so on. I do not know if their failure to provide a lease should have impacted your right to continued occupancy, but it sound pretty fishy.

Even so, I don't know if there's much to be done now about the old case.

In a new case, without a lease, that might be factor. If the new owner takes you to court, I would consult with a tenant attorney and show him/her all the documents and details.
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 8742
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Change of Ownership effect on Rental Arrears.

Postby Diatyposis » Fri Dec 22, 2017 4:48 pm

First Happy Holidays!

TenantNet wrote: The statute of limitations for seeking back rent is 6 years.


Quick question about this. When the new owner comes in, does the date of the arrears reset to the date the new owner took possession of the property and does a previous court judgment on stale rent/Laches years ago with the previous landlord still hold.
Diatyposis
 
Posts: 3
Joined: Fri Dec 22, 2017 4:34 pm

Re: Change of Ownership effect on Rental Arrears.

Postby TenantNet » Fri Dec 22, 2017 5:14 pm

No, in general rent arrears do not reset. You would owe for all arrears, including those incurred while the building was in the hands of the previous owner.

A previous decision stating the previous rent proceeding was dismissed due to laches - depends on what the decision states and what months the previous proceeding covered.

For example, if the previous decision decided that the LL's claim of all rent in 2016 was subject to laches, that would not cover any rent that goes unpaid for months in 2017. You would have to assert the laches defense again for the new months. Also understand that laches does not get you off free and clear. The LL can still seek the old back rent by filing in Civil or Supreme Court.

All of this depends on the specific facts of the case and there might be exceptions to the general rule said above.
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 8742
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Change of Ownership effect on Rental Arrears.

Postby Diatyposis » Fri Dec 22, 2017 5:29 pm

Thanks. I was mostly curious about the new ownership arrears time period. I'm rent control, not going to go into too much details, but I have a feeling the new owner will revisit the arrears which was an accounting error on the old landlords part but it was never taken off the rent bills from a few decades ago and still on the new rent bills. Luckily, I still have all the documents from that.
Diatyposis
 
Posts: 3
Joined: Fri Dec 22, 2017 4:34 pm

Re: Change of Ownership effect on Rental Arrears.

Postby TenantNet » Fri Dec 22, 2017 6:57 pm

I don't believe being rent control makes much difference, but make sure you know whether or not you are on real rent control or rent stabilization. Many RS tenants make that mistake thinking they are RC.

I would get into the habit of "earmarking" your rent checks or money orders, such as in the memo, state "Rent for December 2017 only" and so on. If the LL "rolls over" your current payments to cover what they perceive as rent arrears from some time ago, earmarking might solve that ... depends on the judge. Also, understand there is a 6 year statute of limitations. So the LL can't seek rent from 1993 or 2003, only within the last six years. This is different from laches. That's why earmarking your rent payments is important, so the LL won't take your current payments and apply them to long overdue arrears.
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 8742
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City

Re: Change of Ownership effect on Rental Arrears.

Postby Diatyposis » Sat Dec 23, 2017 1:00 am

No question about being rent control. 100% rent control.

TenantNet wrote: Also, understand there is a 6 year statute of limitations. So the LL can't seek rent from 1993 or 2003, only within the last six years. This is different from laches


Well understood about the 6 year limitations. That's exactly what the new landlord would be doing if he or she tried and you almost got the time period right. Which has already been dealt with.

Thanks for the information and about the earmarking.
Diatyposis
 
Posts: 3
Joined: Fri Dec 22, 2017 4:34 pm

Re: Change of Ownership effect on Rental Arrears.

Postby TenantNet » Sat Dec 23, 2017 2:09 am

I've never used earmarking as a defense in a non-pay case, but I have been told by tenant attorneys it's a good thing to do. In the end it probably depends on the court and the judge. My LL is one of those that wants to take the current payment and apply it to the oldest outstanding arrears. This is an attempt to get around the 6-year statute of limitations (make sure you make that argument as well).

It might depend on what is written in the lease. But as you're RC, you might not have an actual lease.

Even if you paid for Dec. 2017, the LL might claim they applied it to what they claim is an arrears from ten years ago. Earmarking should get the Dec. 2017 applied to only Dec. 2017.

There are some cases out there on earmarking, but I don't recall seeing any appellate or controlling cases. I would just Google "NYC landlord tenant rent earmarking" or various phrases similar to that.

If your case goes to trial, you can probably tear the LL's record-keeping to shreds. If they changed the system, or don't have someone with personal knowledge of the records, their burden of establishing the rent records and arrears is that much harder. A good tenant attorney would know how to do that.

And as you said this is all based on their uncorrected error, you can probably walk all over them.
The Tenant Network(tm) for Residential Tenants
Information from TenantNet is from experienced non-attorney tenant
activists and is not considered legal advice.

Subscribe to our Twitter Feed @TenantNet
TenantNet
 
Posts: 8742
Joined: Mon Jan 21, 2002 2:01 am
Location: New York City


Return to NYC Rent Regulated Apartments

Who is online

Users browsing this forum: Bing [Bot] and 2 guests