Landlord & Tenant

Proprietary Lessee May Not Bring Owner-Occupancy Proceeding

Ross v. Abbott

NYLJ 12/19/02, p. 23, col. 3

Civil Ct. NY City

(Cavallo, J.)

In a holdover proceeding to recover possession of a rent-stabilized apartment for owner occupancy, tenant resisted, claiming that petitioner was not an 'owner' of the apartment. The court agreed, holding that although petitioner had what was denominated a 'proprietary lease' to the subject apartment, petitioner was not an 'owner' because no cooperative conversion plan for the building had ever been filed.

The 383 West Broadway Corporation owns the building in which the subject apartment is located. Petitioner Charles Ross owns 114 shares in the corporation, and holds a 'proprietary lease' to the sixth floor of the building. Ross occupies one of three units on that floor, and leased the contiguous unit to respondent-tenant. The building is in an interim multiple dwelling that is now subject to rent stabilization. When respondent-tenant's lease expired May 31, 2002, Ross sought possession so that he could expand his living space. Ross invoked section 2524.4(a) of the Rent Stabilization Code, which gives the owner of a rent-stabilized apartment the right to recover possession for his own occupancy. Tenant resisted, contending that Ross was not the owner of the apartment.

In granting tenant's motion to dismiss, the court noted first that the cooperative conversion process for the building had never been completed. Ross contended that the building has in fact been operated as a de facto corporation since 1974, and that he should therefore be treated as the owner of the subject apartment. The court rejected the argument, emphasizing that no good-faith effort had been made to organize a 'proper cooperative corporation.' Even though Ross could establish that he was the landlord of the subject apartment, he was nevertheless not an owner within the meaning of the statute, and was not entitled to possession.

Tenant Who Refunded Overcharge to Roommate Is Not Subject to Eviction

 
L.E.S.P.M.H.A. v. Nunez

NYLJ 1/02/03, p. 23, col. 4

Civil Ct., NY City

(Cavallo, J.)

In landlord's holdover proceeding to remove a tenant for profiteering, both parties sought summary judgment. The court granted tenant's summary judgment motion, holding that because tenant had refunded the money illegally extracted, tenant's conduct did not constitute profiteering.

On August 1, 1993, landlord leased the premises to tenant for a 2-year term.  She subsequently renewed the lease several times, and on August 1, 1999, a new lease went into effect at a rental amount of $377.54 per month. In January 2000, while still occupying the apartment, tenant leased the smaller bedroom in the apartment to a third party, Chris Chan, for $700 per month. On December 20, 2000, the Rent Stabilization Code was amended to prohibit a rent-stabilized tenant from charging a roommate any more than a proportionate share of the legal regulated rent. Tenant continued to collect $700 per month from Chan until January 2002, when tenant asked Chan for an increase to $800 per month. Chan then wrote to landlord notifying landlord of his agreement with tenant, and requesting assistance in settling the issue of the increased rental. Tenant then terminated Chan's tenancy. Chan refused to leave, and tenant brought a holdover proceeding, which was ultimately settled when tenant agreed to refund Chan the sum of $4,000. Then, in April 29, 2002, landlord terminated tenant's tenancy, and, in May, commenced the instant holdover proceeding to recover possession. Landlord's grounds were profiteering and rent gouging.

In granting summary judgment to tenant, the court concluded that overcharging a subtenant does not establish a prima facie case of profiteering when tenant refunds the overcharge to the subtenant. Hence, the court concluded that landlord had not alleged conduct that amounts to profiteering. In addition, the court concluded that tenant had not engaged in rent gouging within the meaning of Penal Law section 180.56 because there was no understanding that Chan would receive a lease in return for payments made to tenant. As a result, the court dismissed the proceeding.

Proprietary Lessee May Not Bring Owner-Occupancy Proceeding

Ross v. Abbott

NYLJ 12/19/02, p. 23, col. 3

Civil Ct. NY City

(Cavallo, J.)

In a holdover proceeding to recover possession of a rent-stabilized apartment for owner occupancy, tenant resisted, claiming that petitioner was not an 'owner' of the apartment. The court agreed, holding that although petitioner had what was denominated a 'proprietary lease' to the subject apartment, petitioner was not an 'owner' because no cooperative conversion plan for the building had ever been filed.

The 383 West Broadway Corporation owns the building in which the subject apartment is located. Petitioner Charles Ross owns 114 shares in the corporation, and holds a 'proprietary lease' to the sixth floor of the building. Ross occupies one of three units on that floor, and leased the contiguous unit to respondent-tenant. The building is in an interim multiple dwelling that is now subject to rent stabilization. When respondent-tenant's lease expired May 31, 2002, Ross sought possession so that he could expand his living space. Ross invoked section 2524.4(a) of the Rent Stabilization Code, which gives the owner of a rent-stabilized apartment the right to recover possession for his own occupancy. Tenant resisted, contending that Ross was not the owner of the apartment.

In granting tenant's motion to dismiss, the court noted first that the cooperative conversion process for the building had never been completed. Ross contended that the building has in fact been operated as a de facto corporation since 1974, and that he should therefore be treated as the owner of the subject apartment. The court rejected the argument, emphasizing that no good-faith effort had been made to organize a 'proper cooperative corporation.' Even though Ross could establish that he was the landlord of the subject apartment, he was nevertheless not an owner within the meaning of the statute, and was not entitled to possession.

Tenant Who Refunded Overcharge to Roommate Is Not Subject to Eviction

 
L.E.S.P.M.H.A. v. Nunez

NYLJ 1/02/03, p. 23, col. 4

Civil Ct., NY City

(Cavallo, J.)

In landlord's holdover proceeding to remove a tenant for profiteering, both parties sought summary judgment. The court granted tenant's summary judgment motion, holding that because tenant had refunded the money illegally extracted, tenant's conduct did not constitute profiteering.

On August 1, 1993, landlord leased the premises to tenant for a 2-year term.  She subsequently renewed the lease several times, and on August 1, 1999, a new lease went into effect at a rental amount of $377.54 per month. In January 2000, while still occupying the apartment, tenant leased the smaller bedroom in the apartment to a third party, Chris Chan, for $700 per month. On December 20, 2000, the Rent Stabilization Code was amended to prohibit a rent-stabilized tenant from charging a roommate any more than a proportionate share of the legal regulated rent. Tenant continued to collect $700 per month from Chan until January 2002, when tenant asked Chan for an increase to $800 per month. Chan then wrote to landlord notifying landlord of his agreement with tenant, and requesting assistance in settling the issue of the increased rental. Tenant then terminated Chan's tenancy. Chan refused to leave, and tenant brought a holdover proceeding, which was ultimately settled when tenant agreed to refund Chan the sum of $4,000. Then, in April 29, 2002, landlord terminated tenant's tenancy, and, in May, commenced the instant holdover proceeding to recover possession. Landlord's grounds were profiteering and rent gouging.

In granting summary judgment to tenant, the court concluded that overcharging a subtenant does not establish a prima facie case of profiteering when tenant refunds the overcharge to the subtenant. Hence, the court concluded that landlord had not alleged conduct that amounts to profiteering. In addition, the court concluded that tenant had not engaged in rent gouging within the meaning of Penal Law section 180.56 because there was no understanding that Chan would receive a lease in return for payments made to tenant. As a result, the court dismissed the proceeding.