There have been quite a few interesting developments since my last report to you and not all of them have been in Washington or the rest of the world. As usual, it is my pleasure to bring them to your attention.
There have been several decisions dealing with the bankruptcy of a tenant and the effect that it has on a landlord's ability to evict. We have written often on this subject. In a recent case, an owner obtained a warrant of eviction prior to tenant's bankruptcy filing and proceeded with his attempt to evict. The tenant asked for a stay based upon the automatic stay in a bankruptcy proceeding. The owner argued that since the warrant had issued, the tenant no longer had any interest in the property to which the stay could attach. The Court held otherwise saying that as long as the landlord wanted to proceed under the original index number, the automatic stay which prohibits the continuation of any proceeding would apply. In another decision however, the court has ruled that even though a bankruptcy extinguishes the personal debt of the tenant for rent, it does not preclude the owner from commencing a summary proceeding to evict the tenant for non payment of pre- petition debt provided that the owner seeks only eviction and not money. Thus, even though the tenant may be current with post petition rent, he may still be evicted for failing to pay the pre- petition rent even though the only relief to the owner is recovery of possession.
The defense of "disability" under the ADA is being used more frequently as a defense to eviction actions. The court has recently ruled in one such case that where a tenant makes his disability the core issue in tenant's defense that owner will be entitled to discovery on the issue of disability and whether the disability rises to the level required under the ADA to prevent eviction. The mere unsupported assertion of disability is insufficient.
In an interesting case pertaining to co-ops, a Board voted to commence an action against the sponsor on various grounds. Subsequently, the Board voted to discontinue the action. At the time of the vote, the sponsor had two seats on the Board and a tenant of sponsor had a third seat. The President sought to disqualify those three votes. The court agreed, saying that the "so-called 'controlling' votes of the majority should not be counted since they were cast by interested directors in order to stop litigation reasonably initiated for the benefit of the corporation...".
In another interesting co-op case, A purchased the shares allocated to a particular unit at a foreclosure sale, after which he proceeded with an attempt to evict the prior shareholder pursuant to Sec. 713(5) of the RPAPL. This is the section dealing with post foreclosure evictions. The prior owner asserted that A could not proceed under that section because it referred to a deed. The court ruled that a certificate of sale was the equivalent of a deed for the purposes of the statute and allowed the action to continue. In an action to foreclose a second mortgage on a condo, the condo delayed asserting its priority for common charges until long after the action had been commenced. When the condo realized its mistake, it sought to amend its answer and assert the claim. The court said no in that the delay had been too long and it would prejudice the bank. Condo Boards should be diligent in asserting their priorities or they may lose them.
The recent amendments to ETPA et al which created a four year statute of limitations on rent overcharge awards were clearly and explicitly intended to be retroactive as of 6/19/97 and any and all rent overcharge complaints, no matter when filed, which were not filed within four years of the first overcharge are barred.
We have often been asked about illegal activity on the premises and how to evict the tenant where the illegal activity is conducted by someone other than the named tenant event though the activity occurred on the premises. This can be a problem where the tenant claims no knowledge of the activity. The court has ruled that in such a case, the owner must show that the apartment had been used for the activity and that the tenant knew it was being so used. Where the tenant is not personally involved in the activity, the connection between the apartment and the activity must be conclusively shown to warrant eviction.
Some other decisions of interest:
1.) With reference to the above case, an owner attempted to evict a wife based upon his claim that the premises were being used for drug sales. A search revealed drugs and drug paraphernalia. All family members were arrested whereupon the husband pleaded guilty to the drug charge. The court ruled that the wife had had no knowledge of the drug use and refused to permit the eviction.
2.) In an interesting decision pertaining to succession rights, the court has ruled that the provisions of the Rent Reform Act removing nieces, nephews, aunts and uncles from the list of proper successors is retroactive. The court also ruled that where DHCR had ruled on one aspect of a succession question, a petitioner was not necessarily barred from proceeding without a showing by the tenant that the issues involved were identical.
3.) Rent reductions denied: oil smell when oil is delivered to building; small reduction in storage space; rent reduction ordered; failure to repair leaking faucet; failure to repaint area discolored by leak; failure to give tenant key to laundry room.
We have often been asked whether or not a sponsor can file for an MCI on work done b y a co-op for which an assessment is levied. There have been several rulings on this question. DHCR has generally said that the managing agent of the co-op must file on behalf of all interested parties including holders of unsold shares unless the managing agent will not proceed. Generally however, since the managing agent represent the co-op corporation which does not stand to gain from the award of an MCI to a holder of unsold shares, the managing agent will not proceed. In that case, the sponsor or holder may file for an MCI. We have done so successfully on several occasions.
All owners are troubled by the strict application of the "pet law". All is not necessarily lost if you miss the deadline depending upon what the lease says. In one recent case, a tenant attempted to use the pet law as a defense to an eviction action by asserting that owner did not object to prior pets. In this particular case the lease required landlord's consent "in each instance". It may be a good idea to modify the pet clause in the lease to include a consent requirement for each instance in order to avoid this defense.
The court has ruled that acceptance of rent in a lock box does not affect the designation of tenancy since a landlord cannot prevent any third party from sending checks to lock box and checks sent to a lock box by unauthorized occupants do not realistically put the landlord on notice of anything. Furthermore, there is no waiver since waiver is "the voluntary abandonment or relinquishment of a k own right". No such waiver occurs where the landlord doesn't know what he is waiving.
4)A landlord can remove an illegal staircase without reducing services provided that there remains an alternate means of ingress and egress.
5)The fact that a tenant adds a signature to his lease renewal is of no legal effect.
6) The incarceration of a tenant's child does not prevent that child from getting pass on rights. He just cant vote or hold public office, but at least he can get his parent's old apartment!
Plaintiff had been left a coop by a relative. The plaintiff requested that the coop transfer the name of the stock and lease into his name and the coop refused, citing the business judgement rule despite the fact that the plaintiff was an upstanding citizen with ample financial resources. The court said that the coop could not use the business judgement rule in a blanket fashion to justify a decision that had no basis in fact.
In the past we have advised that a purchaser at a foreclosure sale will not be responsible for a rent overcharge award against a prior owner UNLESS the purchaser has actual knowledge of the award.
7) Tenant is not entitled to a Yellowstone injunction in a commercial non payment proceeding.
DHCR has ruled that a landlord can collect a rent increase from every SECOND family member to get passalong rights. All you have to do is live long enough!
In the ongoing debate about the right of a landlord/coop to regulate the installation of satellite dishes, there has finally been some clarification by the FCC. A tenant can: 1)install a dish on a patio or balcony, in a yard or garden under tenant's exclusive control: 2) install a dish or antenna inside their apartment: a tenant cannot: 1)install a dish larger than one meter in diameter; 2) install a dish or antenna on an exterior wall; 3) install a dish or antenna in a common area including a roof. Also, owners cannot impose rules that unreasonably delay of prevent installation.
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