Landlord v. Tenant: February 2013

DOH Violations: Landlord Responsible for Condition Yielding Mosquitoes

DOHMH issued a violation notice to landlord after finding a large container next to his building that held standing water and organic material. DOHMH claimed that this condition was conducive to the breeding of mosquitoes. Landlord claimed that he wasn't responsible for the condition because he didn't live in the building and paid a tenant to be the building super. The ALJ ruled against landlord and fined him $600. Landlord appealed and lost. Landlord was a "person in control" of the building as defined by the Health Code.  Plus, on the date of the violation, tenant was ill and died a few days later.

• Levine: ECB App. No. 1200867 (11/29/12)

Procedure--Court: Tenant Can't Vacate Settlement Agreement

Landlord sued to evict rent-stabilized tenant for nonpayment of rent. Landlord claimed that tenant owed $46,450 in back rent for the period between May 2008 and March 2011. Tenant claimed that the building had no valid Certificate of Occupancy (C of O), so landlord couldn't sue for rent arrears. Tenant also claimed a breach of the warranty of habitability and sought a rent abatement.

      The court dismissed landlord's claim for rent for any period before Feb. 16, 2011, when landlord obtained a C of O. Landlord and tenant later signed a settlement agreement in court. Landlord agreed to give tenant rent credits totaling $25,000 in full satisfaction of all of tenant's claims, including attorney's fees. Landlord also agreed to give tenant a rent-stabilized lease at a monthly rent of $1,600. Landlord later asked the court to hold tenant in contempt for failing to sign the lease. Tenant then asked the court to vacate the settlement agreement, claiming fraud and duress.

      The court ruled against tenant. Tenant's claim that he was pressured by the court and counsel to sign the settlement agreement wasn't grounds to vacate the signed stipulation. Tenant also made no claim that the agreement was unconscionable, contrary to public policy, or that he imprudently waived any defenses.

• 379 East 10th Street, LLC v. Miller: 37 Misc.3d 1227(A), 2012 NY Slip Op 52204(U)

Rent Increase Denied: No Additional A/C Surcharge Permitted

Landlord asked the DHCR for permission to increase rent-controlled tenant's rent based on tenant's installation of two air conditioners that extended beyond the window line. The DRA ruled against landlord, who appealed and lost. DHCR records showed that landlord previously obtained rent increases for tenant's air conditioners in 1961 and 1968. Landlord argued that the prior increases were $2 per unit and that the surcharge should be updated to the current DHCR allowance of $5 per unit. But DHCR Operational Bulletin 84-4 permits a surcharge of $5 per air conditioner for units installed on or after Oct. 1, 1985. The Operational Bulletin provides that prior agency practices govern the amount of the surcharge for units installed before that date. There was no dispute that the units in question were installed before 1985. So the DRA correctly dismissed landlord's application.

• Manhattan Holding LLC: DHCR Adm. Rev. Docket No. AU420015RO (10/16/12)

Rent Overcharge: Triple Damages Imposed

Tenant complained of a rent overcharge. His monthly rent was $1,810. Landlord claimed that individual apartment improvements performed before tenant moved in resulted in a legal regulated rent for the apartment that was over $2,000, which at that time was above the luxury deregulation threshold. The DRA ruled against tenant, finding that the apartment was exempt from rent stabilization. Tenant appealed, arguing that the DRA didn't correctly analyze landlord's "1/40th" documentation.

      The DHCR ruled for tenant, finding that the apartment remained rent stabilized. The case was sent back to the DRA to calculate the overcharge. The DRA then ruled for tenant and ordered landlord to refund $22,500, including triple damages and interest. Landlord appealed, claiming that the overcharge wasn't willful and that it shouldn't be penalized for not registering tenant's apartment.

      The DHCR ruled against landlord. Although the DRA initially ruled that the apartment was exempt, landlord had notice that the proceeding was reopened and failed to refund overcharges before the overcharge ruling was issued. Landlord also failed, to date, to register the apartment, and therefore tenant's rent was correctly frozen as part of the overcharge calculation.

• Side Kick Ridge Associates LLC: DHCR Adm. Rev. Docket No. ZA410002RO (11/15/12)

Rent Stabilization Coverage: Landlord Claims Tenants Fraudulently Avoided Luxury Deregulation

From 2004 to 2008, landlord filed applications with the DHCR seeking luxury deregulation of tenants' rent-stabilized apartment. Landlord didn't file with the DHCR in 2009 or 2010, but instead sued tenants in court, claiming that for the years that the DHCR had denied landlord's applications, tenants had annual income that was greater than the $175,000 deregulation threshold. Landlord claimed that tenants, husband and wife, fraudulently underreported their income to avoid luxury deregulation. Tenants' monthly rent was $3,060. Tenant husband was over 80 years old and unemployed. Tenant wife had been a real estate broker until 2012. She claimed that she worked with a group of brokers and earned only a small portion of split commissions. Tenants asked the court to dismiss the case.

      The court ruled for tenants. Landlord appealed and lost. Only the DHCR could rule on whether tenants' household income exceeded the threshold for high-rent/high-income deregulation. And the DHCR had already done so for the years in question. Landlord couldn't attack the DHCR's final decisions by later suing tenants directly. Landlord also failed to specify any facts to justify its fraud claim. Its claim was purely speculation.

• Katz 737 Corp. v. Cohen: 2012 NY Slip Op 08818, 2012 WL 6620592 (App. Div. 1 Dept.; 12/20/12)

Rent Stabilization Coverage: Tenant's Legal Rent Too Low for Deregulation

Tenant moved into landlord's building in 1981 and was given a rent-stabilized lease. New landlord bought the building in 1991 and asked the DHCR to rule on whether tenant was in fact rent stabilized. Landlord claimed that the building contained only five apartments. Landlord also refused to renew tenant's lease in 1992. Landlord and tenant then agreed in 1995 to a retroactive lease for the period between Nov. 1, 1994, and Oct. 31, 1996. They also agreed to a monthly rent of $1,700, which was greater than the rent-stabilized rent, and that the lease would be renewed forever for two-year terms at rates set by the Rent Guidelines Board. In 2002, landlord sent tenant an income certification form (ICF) as a predicate to seeking high-rent/high-income decontrol of the apartment.

      Tenant then sued landlord, seeking a declaration that the 1995 lease was valid and stopping landlord's attempt to have the unit declared exempt from rent stabilization. Landlord in turn, filed a high-rent/high-income deregulation application in June 2002. The DRA ruled for landlord because tenant's rent and household income exceeded the luxury deregulation thresholds. Tenant appealed and lost. Tenant then filed an Article 78 appeal, claiming that the DHCR's decision was unreasonable.

      The case was sent back to the DHCR, which revoked the deregulation order and sent the case back to the DRA for recalculation of tenant's rent. The DRA then found that tenant's legal regulated rent in April 2002 was $1,882 and therefore was too low for luxury deregulation. Tenant and landlord both appealed. Tenant claimed that the legal rent should be less than the DRA determined. Landlord claimed certain documents weren't considered.

      The DHCR ruled against both sides. Tenant then filed another Article 78 appeal, and the case was sent back to the DHCR. The DHCR then ruled for tenant and reduced the legal regulated rent to $1,700, using the DHCR's default method.

• Drucker: DHCR Adm. Rev. Docket No. ZE410001RP (11/29/12)