Expanded Protections for Tenants Are Upheld in Court

New York City’s tenant antiharassment law, which gave renters the right to sue their landlords in Housing Court for using threats or other disruptive tactics to try to force them out, was upheld in a State Supreme Court ruling in August 2009.

The law, known as the Tenant Protection Act, made harassment a housing code violation and allowed a judge to impose civil penalties of $1,000 to $5,000. It defined harassment as the use of force or threats, repeated interruptions of essential services, the frequent filing of baseless court actions and other tactics that “substantially interfere with or disturb the comfort, repose, peace or quiet” of an apartment’s lawful occupant.

Tenant advocates said that as neighborhoods gentrified, landlords were being more aggressive in pushing out low-rent tenants. The landlord group, the Rent Stabilization Association, disputed any claims that tenant harassment was a widespread problem in the city.

Previously, tenants who took their landlords to Housing Court could do so only for problems with essential services or the physical conditions of the units, and harassment was not considered a violation of the city’s Housing Maintenance Code.

In her ruling, Justice Rakower described the law as a “rational legislative response to what the City Council has determined is the potential for a growing problem of tenant harassment in New York City.”

In a statement, the Council speaker, Christine C. Quinn, called the decision “a great victory” for tenants. “Contrary to the assertions of the landlord lobby, this law is neither vague nor unnecessary,” she said.

Mitchell Posilkin, the Rent Stabilization Association’s general counsel, said the group was considering an appeal. “We believe that the housing code in every other respect is a compilation of objective housing conditions,” he said, “and that creating a violation issued by a Housing Court judge instead of an inspector, and for a subjective condition, is outside of the legislative authority relating to the housing code.”

Nearly 540 harassment cases have been filed under the law, according to Ms. Quinn’s office. Of those, 21 have resulted in civil penalties.

TENANT LIABLE FOR TREBLE DAMAGES

In 2006, the case of Gboizo v. State of New York Division of Housing and Community Renewal, New York County Supreme Court Justice Edward H. Lehner was unable to reconcile two sections of the Rent Stabilization Code. One provision automatically entitles a subtenant to “treble damage” when overcharged by a tenant, while another affords property “owners”–faced with a similar allegation–an opportunity to establish that the conduct was not willful. This latter showing allows owners to have the penalty reduced to the amount of the overcharge plus interest. However, according to the State Division of Housing and Community Renewal (“DHCR”), this “lack of willfulness” demonstration is only available to property owners (rather than overcharging tenants).

In Gboizo, the prime tenant leased a Manhattan apartment to a subtenant for rents ranging from $900 to $1,100 per month. Within a year, the subtenant filed a rent-overcharge complaint with the DHCR claiming that the legal regulated rent was only $225 per month. Ultimately, the claim was successful and the overcharge determination, which totaled $29,631 when trebled, was upheld. The DHCR’s position was that when a tenant collects overcharges from a subtenant, the treble-damage penalty was “mandatory” and the issue of “willfulness” could not be considered.

In an Article 78 proceeding started in the New York County Supreme Court, the prime tenant asserted that it had been his belief that the unit was exempt from rent regulation. Despite some unique factual underpinnings as to the unit’s status, Judge Lehner was asked to decide whether subleasing tenants could avoid treble-damage liability by establishing the inadvertence of an overcharge. Since there was “nothing in the statute … that would bar a sublessor from this statutory right to present evidence of the absence of willful conduct,” the Court concluded (in a decision dated January 31, 2006) that the agency’s sublessor-hostile interpretation of the regulations was “invalid.”

In an interesting twist, the DHCR later asked Judge Lehner to reconsider his decision–by way of a process called “reargument”–and, after reviewing the parties’ submissions, the judge concluded that he had made a mistake. In a decision released last week, the Court noted as follows:

Having been previously advised by both counsel that no authority had been located supporting the validity of the different treatment provided in the Code between overcharges by an owner as compared to those by a sublessor, and I finding none, I concluded that there was nothing in the RSL authorizing this disparate treatment. That conclusion was in error.

Upon further examination, it was discovered that, over two decades ago, Judge David Saxe–now an Associate Justice of the Appellate Division, First Department–had examined the sections in question and concluded that the treatment differential was deliberate. As Judge Saxe observed Kolbert v. Clayton, 127 Misc.2d 1036, 487 N.Y.S.2d 995 (Civ.Ct., N.Y. County, 1985):

On reflection, the reasoning of the Legislature is evident–the procedure in arriving at the legally chargeable amount of rent by a landlord is extremely complicated, and mistakes in calculation are not necessarily always the fault of the landlord. The tenant on the other hand, need not follow any complicated procedure or apply any intricate formulas to discover the amount of rent he may lawfully charge to a subtenant–he need only look to his lease and, if applicable, add a 10% charge. It is for this reason, I am certain, that the Legislature did not believe it necessary to equip the sublessor who overcharges with the same defense that is available to the landlord-owner.

Faced with this precedent, and in the absence of a constitutional infirmity, Justice Lehner recalled his prior decision, noting, in part, as follows:

Hence, since the RSL and the Code adopted pursuant thereto clearly provide for different rights between the two classes of lessors, DHCR was correct in applying the treble damages provision of section 2525.6(b) of the Code without considering the issue of willfulness.

Was that backpedaling or a flip-flop?

“I as free forgive you
As I would be forgiven….”Shakespeare, Henry VIII, Act II, Scene I

For a copy of the Supreme Court’s September 6, 2006 decision in Gboizo v State of New York Division of Housing and Community Renewal, please click on the following link:
http://www.nycourts.gov/reporter/3dseries/2006/2006_26353.htm

For a copy of the Supreme Court’s January 31, 2006 decision, please click on the following link:
http://www.nycourts.gov/reporter/3dseries/2006/2006_26025.htm

ROOMMATE MAY NOT BE LIABLE FOR TREBLE DAMAGES

Where a roommate is charged more than their proportional share of the rent in a rent stabilized unit,  RSC section 2525.7(b) affords the victim a cause of action to sue for the amount overcharged, but not for treble damages, as held in the 2003 New York county Civil Court case, Bryant v. Carey.

However, the 2008 appellate division, first department case in First Hudson Capital, LLC v. Seaborn seems to aknowledge a distinction in which an undertenant may be able to successfully sue for treble damages from the prime tenant if they have been paying well over the regulated rent in a rent stabilized apartment that has been subdivided into sublets.

The distinction mentioned in First Hudson was another cited case  West 148 LLC v Yonke, (11 Misc 3d 40 [2006], lv denied 2006 NY Slip Op 73839U [1st Dept 2006]), where the tenant rented a portion of the stabilized apartment at double the regulated rent to a series of guests or “roommates” and described the apartment, in both an Internet listing for “Affordable Hotels” and on her business card, as the “Chez Sylvie Bed and Breakfast.”

It is hinted in FIrst Hudson that this “roommate” senario would trigger a successful suit for treble damages because the prime tenant did not merely charge more than a proportionate share of the registered rent, he heinously charged over and above the acual rent of the apartment.

The best way to resolve a roommate overcharge situation, especially where there has been a breakdown in the roommate relationship, is for both parties to try and resolve the issue amicably.   However, this is often times easier said than done. What each party should do is independently hire his own lawyer to draft, agree upon, and negotiate a business agreement in which the roommate  who is guilty of the overcharge (most likely the tenant of record) agrees to place the overcharged amount, plus interest, into an escrow account  to be released to the other party only after agreed upon conditions have been met.  If this arrangement cannot be reached, then the harmed party can either choose to sue for the overcharge damages in civil court, housing court, or file a complaint through DHCR.

It is important to remember, however, that suing in civil court, housing court, and filing a claim through DHCR each comes with its own set of pros and cons. For instance, suing in civil court can be time consuming and cost you money.  Also, it may not be the best forum if the harmed roommate cannot affort to continue paying her rent.  In that case, suing in housing court would be your best option.  On the other hand, suing in civil court gives parties the best oportunity to do discovery, where as housing (depending on the judge) court does usually does not entertain discovery inquiries. Filing a complaint through DHCR is great because DHCR will litigate the case.  However, the agency is notorious for taking anywhere from six months to a year (or longer) to get to the case.

It is always advisable to consult with an attorney to see which of these options is best for you.

For a copy of the Civil Court’s March 28, 2003 decision in Bryant v. Carey, please click on the following link:
http://caselaw.findlaw.com/ny-civil-court/1341230.html

For a copy of the Appellate Division, First Department’s  August 5, 2008 decision in First Hudson Capital, LLC v. Seaborn, please click on the following link:
http://www.tenant.net/phpBB2/viewtopic.php?t=7328

YOU CAN GET A COPY OF YOUR APARTMENT’S REGISTRATION INFORMTION EVEN WITHOUT A LEASE

You do not need to be the tenant of record or even have a lease in order to go to DHCR and acquire a copy of the registration apartment information for the rent stabilized apartment you are living in. You do however, need to bring a valid ID with you like a current driver’s license or state ID. It is also helpful to bring proof that you are living in the apartmment such as utility bills or mail with your name and address.  If you are being evicted by the landlord or another tenant, be sure to bring a copy of the eviction documents (including any court documents) with you when you go your local DHCR office as this will serve as further proof of your residing in the apartment for which you wish to seek registration apartment information.

Rent in the amount of $2,000 per month will not automatically cause your rent regulated unit to become exempt from regulation

New York State’s rent regulatory laws permit an owner to make an annual application to exempt from rent regulation housing accommodations having a “maximum rent” (rent controlled) or “legal regulated rent” (rent stabilized) of $2,000.00 or more per month. If the tenant(s) timely respond to a separate notice of the deregulation application from the NYS Division of Housing and Community Renewal (DHCR), the NYS Department of Taxation and Finance will review whether the housing accommodation is occupied by persons who have a total annual income in excess of $175,000.00 in each of the two preceding calendar years. Annual income means federal adjusted gross income as reported on the New York State income tax return. For housing accommodations subject to rent stabilization, total annual income means the sum of the annual incomes of all persons whose names are recited as the tenant or co-tenant on a lease who occupy the housing accommodation, whether or not as a primary residence, and of all other persons who occupy the housing accommodation as their primary residence on other than a temporary basis. For housing accommodations subject to rent control, total annual income means the sum of the annual incomes of all persons who occupy the housing accommodation as their primary residence on other than a temporary basis. For both rent-stabilized and rent-controlled housing accommodations, the incomes of bona fide employees of such tenants, co-tenants, and occupants residing in the housing accommodation in connection with their employment are not included. In addition, where a housing accommodation is sublet, the annual
income of a bona fide subtenant is not included. In all cases, the operative date for determining the nature of any person’s status or occupancy is the date that this form is served upon the tenant. The incomes of otherwise qualifying tenants or occupants who temporarily vacated the housing accommodation during the 2009, 2010 or 2011 calendar years will be included in total annual income. This form, when served upon a tenant, initiates the process of determining whether this
housing accommodation qualifies for deregulation based upon the above criteria. This housing accommodation can only be deregulated pursuant to a separate order issued by the Division of Housing and Community Renewal in response to an owner’s filing a petition for deregulation based on the tenant’s (s’) income. No order of deregulation will be issued if the owner is receiving J-51 or 421-a tax benefits.

IF YOUR APARTMENT HAS INCOME LIMITATIONS, AND YOU DON’T QUALIFY, YOU MIGHT NOT BE A CANDIDATE FOR SUCCESSION RIGHTS
For rent-stabilized and rent-controlled apartments throughout New York State, except where occupancy is restricted by income limitations pursuant to federal, state or local law, regulations or other governmental agency requirements, where a tenant permanently vacates an apartment, any “family member” of the tenant as defined below shall have the right to a renewal lease (rent stabilization), or to protection from eviction (rent control), provided that such family member has resided with the tenant as a primary resident in the apartment for 2 years (1 year for “senior citizens” or “disabled persons”) immediately prior to the permanent vacating of the apartment by the tenant, or from the inception of the tenancy or commencement of the relationship, if for less than such
periods.
Even if your building has income limitations that apply, your apartment may not.  If you believe you may have succession rights, and you do not qualify for income limitations, be sure to investigate whether or not your apartment has income limitations as well. There two easy ways you can find out. Check the lease; in the alternative, you can go to DHCR and look at the registerd rents for your apartment. The rent registration will tell you whether or not your landlord has been registering your unit as a low income unit or not.

Family Member’s Renewal Lease and Eviction Protection Rights: Rent Stabilization Code
Section 2523.5 (b), Tenant Protection Regulations Section 2503.5 (d), City Rent Control Regulations
Section 2204.6 (d), State Rent Control Regulations Section 2104.6 (d)

The laws pertaining to succession are quite complicated.  As such, it is always important to consult with an attorney first to be certain whether or not you have succession rights.

Definitions: a. “Family Member”:
(i) A husband, wife, son, daughter, stepson, stepdaughter, father, mother, stepfather, stepmother,
brother, sister, grandfather, grandmother, grandson, granddaughter, father-in-law, mother-in-law, son-in-law or daughter-in-law of the tenant (or permanent tenant for New York City rent stabilized hotels).
(ii) In addition to such “traditional” family members, for the purpose of renewal lease and eviction
protection rights, a family member also includes those persons (nontraditional family members) who have resided with the tenant, as set forth in item 1 above, in a familial relationship based upon emotional and financial commitment and interdependence with the tenant or permanent tenant.

Several factors are considered in determining whether such commitment and interdependence existed between the tenant and family member, and no single factor is solely determinative. These factors are:
— there is longevity to the relationship (this consideration is separate from the required minimum
residency periods discussed above, and may include the length of the relationship between the family
member and the tenant prior to occupancy of the housing accommodation at issue);
— they have shared or relied upon each other for payment of household or family expenses and/or other common necessities of life; joint ownership of personal and real property, credit cards and loan
obligations;
— they have intermingled their finances (for example, joint bank accounts or sharing a household budget for purposes of receiving government benefits);
— they have attended family functions together, or held themselves out as family members to other family members or society in general;
— they have formalized legal obligations with each other (for example, executing wills naming each other as executor and/or beneficiary, or serving as representative payees for purposes of public benefits; granting each other a power of attorney and/or conferring upon each other authority to make health care decisions each for the other; entering into a personal relationship contract);
— they relied upon each other for daily family services (for example, assistance during illness);
— engaging in any other pattern of behavior, agreement, or other action which evidences the intention of creating a long-term, emotionally-committed relationship.
Sexual relationships between tenants and such family members will not be considered as a factor.

Tenants do not need a landlord’s consent before an immediate family member or an additional occupant moves into a unit. The Roommate Law protects tenants from a landlord that attempts to reduce apartment-sharing rights, even when the landlord attempts to diminish these rights in a lease. Any clause in a tenant’s lease that purports to waive or modify a tenant’s right to share rental
space is “unenforceable as against public policy.”

A landlord has the right to know about any occupant in the rental unit. A tenant must inform the landlord, upon the landlord’s request, of the name of any occupant within 30 days after the occupancy begins. A landlord’s request need not be made in writing. Both the landlord and the Division of Housing and Community Renewal (DHCR) are authorized under the New York City Housing Maintenance Code (HMC) to demand that a tenant provide a sworn affidavit containing information about all occupants residing in the rental unit, including the name, relationship, and age of any minor children.