Landlord & Tenant

Wife Keeps Rent-Stabilized Apartment Despite Husband's Claim of Tax Benefits As Florida Resident

Glenbriar Co. v. Lipsman

NYLJ 10/21/05, p. 18, col. 5

Court of Appeals

(Opinion by G.B. Smith, J; concurring opinion by Rosenblatt, J.)

In landlord's non-primary residence proceeding, landlord appealed from the Appellate Division's affirmance of an Appellate Term order reversing the Civil Court's grant of the petition. The Court of Appeals affirmed, holding that because the Appellate Division had affirmed the Appellate Term's findings of fact, there was no legal issue that would justify reversal.

Tenants, husband and wife, moved into the subject apartment in 1959. They became rent-stabilized tenants in 1971, when the building first became subject to rent stabilization. When the building became a cooperative in 1984, they chose not to purchase their apartment. The current landlord purchased their shares. In 1995, tenants purchased an apartment in Florida. In 1999, landlord served a notice on tenants that it would not renew their lease because tenants were not using the apartment as their primary residence. Landlord then brought this proceeding. At a hearing, landlord presented documentary evidence of the husband's Florida driver's license, tax returns from Florida signed by the wife, and statements by the husband that Florida was his primary residence for purposes of receiving the Florida homestead exemption. Tenants conceded that the husband had become a resident of Florida, but contended that the wife remained a primary resident of New York, maintaining a voting residence, bank accounts, and family possessions in New York. The Civil Court awarded possession to landlord, but the Appellate Term reversed. The Appellate Division affirmed the Appellate Term's order, concluding that a husband and wife can establish separate residences even though they had a conventional marriage and spent most of their time together. The court went on to hold that the wife's decision to spend winters in Florida with her husband should not cause her to forfeit her principal residence in New York. The Appellate Division granted leave to appeal to the Court of Appeals.

In affirming, the Court of Appeals emphasized its role as a law court, acknowledging that when the Appellate Division has reversed a trial court's finding of fact, the Court of Appeals may review the facts to determine which court's assessment comports more closely with the evidence. In this case, however, the Appellate Division affirmed the Appellate Term's findings of fact, leaving the Court of Appeals unable to review the facts, even though the Appellate Term had previously reversed the Civil Court's determination. Because landlord had not contended that the evidence was legally insufficient to support the Appellate Division's conclusion, the only questions presented were questions of fact — questions the Court of Appeals had no power to review, however troubling the findings below.

Judge Rosenblatt, concurring for himself and Judge R.S. Smith, emphasized the unseemly prospect of spouses living together yet claiming separate residences to take advantage of the mutually exclusive benefits of two jurisdictions.

Landlord Must Build Ramp for Disabled Tenant

Matter of T. K. Management, Inc.

NYLJ 11/2/05, p. 19, col. 3

Supreme Ct., Queens Cty

(Kitzes, J.)

In landlord's proceeding to annul a determination by the New York City Commission on Human Rights (CCHR), CCHR cross-petitioned for a judgment dismissing the proceeding and enforcing CCHR's order. The court dismissed landlord's petition and granted CCHR's cross-petition, holding that landlord had not established the undue hardship necessary to avoid accommodating tenant's physical disability.

Tenant and his wife occupy a residential apartment in Astoria, Queens, in a building owned by landlord. In 1999, tenant suffered a stroke that left him wheelchair-bound. Tenant sought installation of a ramp, together with other accommodations, and brought a proceeding with the CCHR seeking relief. After a 2003 hearing before an administrative law judge (ALJ), the ALJ concluded that the accommodations would create an undue hardship for landlord. The ALJ relied on landlord's testimony that the building operated at a loss in 2001, broke even in 2002, and was expected to operate at a loss again in 2003. In 2004, CCHR disagreed with the hardship determination, concluding that the alleged losses were the result of landlord's decision to take depreciation losses, which CCHR considered a “tax fiction.” CCHR concluded, however, that the appeal was moot because tenant was now living in a nursing home. Tenant then brought an article 78 proceeding, which resulted in a decision by CCHR to reopen the matter, and, after a hearing on tenant's ability to return to and reside in the building, an ALJ concluded that there was no medical reason that would prevent tenant's return. At that point, CCHR ordered landlord to install a code-compliant ramp at the entrance, and adjust the foyer and entrance doors, including widening the space between them, widening the inner set of doors, installing a lift in the lobby, and reducing the force necessary to open the entrance doors. Landlord then commenced this proceeding for judicial review pursuant to section 8-123 of the city's Administrative Code, arguing that the determination that landlord had discriminated against tenant was arbitrary and capricious, and that CCHR's rejection of the undue hardship finding was unsupported by substantial evidence.

In upholding CCHR's determination, the court first concluded that failing to provide tenant with reasonable accommodation constituted discrimination by comparison with other tenants “who can enter and exit the building without difficulty.” The court then noted that CCHR was entitled to reject the ALJ's hardship conclusions because landlord failed to provide documentary evidence that the building was operating at a loss. The court concluded that depreciation was irrelevant to the issue of undue hardship. Thus, although landlord had established that the cost of the accommodations mandated by CCHR were at least $36,000, landlord was nevertheless required to make such accommodations.

Wrongful Eviction Claims Turn on Whether Fire Demolished Building

Quiles v. Term Equities

NYLJ 10/31/05, p. 26, col. 2

AppDiv, First Dept

(memorandum opinion)

In tenants' wrongful eviction action, landlord appealed from Supreme Court's grant of tenants' summary judgment motion. The Appellate Division reversed and remanded, holding that issues of fact about whether the subject building had been effectively demolished by fire prevented grant of summary judgment to tenants.

When the subject building was damaged by fire in 1998, the New York City Department of Buildings (DOB) ordered occupants to vacate the building because of imminent danger to the safety and life of the occupants. At the behest of rent regulated tenants, the Division of Housing and Community Renewal (DHCR) issued orders reducing rents for those tenants to $1.00 per month each, and entitling tenants to be restored to occupancy of the apartments. Landlord filed a petition for administrative review (PAR), seeking a determination that landlord was under no obligation to rebuild, and that if landlord gutted the building and built new apartments, the DHCR order did not give any tenant the right to a new apartment. DHCR denied the PAR, concluding that landlord's hypothetical scenario about rights if landlord gutted the building was not before the Rent Administrator. Landlord then applied to the DOB for permission to renovate the building, increasing the number of apartments from 16 to 39. Landlord subsequently notified tenants that landlord did not intend to restore the apartments to their former state, and that landlord was under no obligation to offer a former tenant a new apartment. Tenants then brought this action for wrongful eviction. Supreme Court granted summary judgment to tenants, holding that the DHCR's prior order reducing tenants' rent to $1.00 and directing that tenants be restored to the premises was binding on landlord because landlord had never sought review of that order. The court also noted that landlord had never applied for DHCR approval to terminate tenants' leases. Landlord appealed.

In reversing, the Appellate Division noted that tenants are protected from eviction only when their apartments are in existence. When an apartment is burned to the ground, tenant has not been evicted by landlord's failure to restore tenant to possession. The court also suggested that when a building is so damaged by fire that landlord has no choice but to demolish it, landlord is not obligated to offer tenants new apartments in the reconstructed building. The court therefore concluded that tenants' wrongful eviction claims in this case turned on whether the building had been effectively demolished by the fire. The court concluded that triable issues of fact precluded summary judgment on that issue.

Tenant Must Pay Use and Occupancy Despite Landlord's Effort to Evade Rent Stabilization

Levinson v. 390 West End Associates, LLC

NYLJ 10/27/05, p. 24, col. 4

AppDiv, First Dept

(memorandum opinion)

In tenant's action for a declaration that the legal stabilized rent for his apartment was the rent paid by the prior tenant in 1991, landlord appealed from Supreme Court's order remanding to DHCR for determination of the legal rent in accordance with a default formula. The Appellate Division modified to require tenant to post a bond to cover use and occupancy for the 36-month period during which tenant had paid no rent, and to require future use and occupancy payments at a rate equal to that of the lowest rent for a comparable apartment in the building.

When tenant's predecessor vacated the apartment in 1991, landlord entered into a lease with tenant on condition that tenant would consent to have a declaratory judgment rendered against him stating that the apartment was not his primary residence and would be exempt from rent stabilization. Tenant, who was advised by counsel, agreed to landlord's terms, and the consent judgment was entered. In 2001, the Supreme Court, on landlord's motion, vacated the consent judgment, but declined to determine lawful rent because that issue was not raised by the pleadings. Tenant stopped paying rent and brought the instant declaratory judgment action. Landlord answered by seeking to validate the rents tenant had been paying under his initial and renewal leases, a rent, which had reached $1944.28 under tenant's last renewal lease. The Supreme Court, however, held that DHCR should determine the legal regulated rent in accordance with the formula adopted (and subsequently affirmed by the Court of Appeals) in Thornton v. Baron, 5 NY3d 175. Supreme Court, however, did not require payment of past use and occupancy, and required payment of future use and occupancy only at the $903.31 per month paid by the prior tenant in 1991. Landlord appealed.

In modifying, the court rejected landlord's attempt to distinguish this case from Thornton v. Baron (which involved the same building). The court acknowledged that this case did not involve an “illusory tenant”, and that the tenant in this case was the first rent-stabilized tenant, but nevertheless held that the Thornton default formula should be used to determine tenant's rent. The court held, however, that tenant should be required to post a bond to cover back use and occupancy, because there was no reason to permit tenant to occupy the premises rent free pending resolution of a dispute over the rent actually due. The court held that the amount of use and occupancy — past and future — should be set at $1061.68 per month, the amount landlord asserts represents the lowest rent for a two-bedroom apartment in the building. The court noted that tenant had not disputed that number, and emphasized that the court's determination was without prejudice to the rights of either party on the remand to DHCR for application of the Thornton default formula.

Wife Keeps Rent-Stabilized Apartment Despite Husband's Claim of Tax Benefits As Florida Resident

Glenbriar Co. v. Lipsman

NYLJ 10/21/05, p. 18, col. 5

Court of Appeals

(Opinion by G.B. Smith, J; concurring opinion by Rosenblatt, J.)

In landlord's non-primary residence proceeding, landlord appealed from the Appellate Division's affirmance of an Appellate Term order reversing the Civil Court's grant of the petition. The Court of Appeals affirmed, holding that because the Appellate Division had affirmed the Appellate Term's findings of fact, there was no legal issue that would justify reversal.

Tenants, husband and wife, moved into the subject apartment in 1959. They became rent-stabilized tenants in 1971, when the building first became subject to rent stabilization. When the building became a cooperative in 1984, they chose not to purchase their apartment. The current landlord purchased their shares. In 1995, tenants purchased an apartment in Florida. In 1999, landlord served a notice on tenants that it would not renew their lease because tenants were not using the apartment as their primary residence. Landlord then brought this proceeding. At a hearing, landlord presented documentary evidence of the husband's Florida driver's license, tax returns from Florida signed by the wife, and statements by the husband that Florida was his primary residence for purposes of receiving the Florida homestead exemption. Tenants conceded that the husband had become a resident of Florida, but contended that the wife remained a primary resident of New York, maintaining a voting residence, bank accounts, and family possessions in New York. The Civil Court awarded possession to landlord, but the Appellate Term reversed. The Appellate Division affirmed the Appellate Term's order, concluding that a husband and wife can establish separate residences even though they had a conventional marriage and spent most of their time together. The court went on to hold that the wife's decision to spend winters in Florida with her husband should not cause her to forfeit her principal residence in New York. The Appellate Division granted leave to appeal to the Court of Appeals.

In affirming, the Court of Appeals emphasized its role as a law court, acknowledging that when the Appellate Division has reversed a trial court's finding of fact, the Court of Appeals may review the facts to determine which court's assessment comports more closely with the evidence. In this case, however, the Appellate Division affirmed the Appellate Term's findings of fact, leaving the Court of Appeals unable to review the facts, even though the Appellate Term had previously reversed the Civil Court's determination. Because landlord had not contended that the evidence was legally insufficient to support the Appellate Division's conclusion, the only questions presented were questions of fact — questions the Court of Appeals had no power to review, however troubling the findings below.

Judge Rosenblatt, concurring for himself and Judge R.S. Smith, emphasized the unseemly prospect of spouses living together yet claiming separate residences to take advantage of the mutually exclusive benefits of two jurisdictions.

Landlord Must Build Ramp for Disabled Tenant

Matter of T. K. Management, Inc.

NYLJ 11/2/05, p. 19, col. 3

Supreme Ct., Queens Cty

(Kitzes, J.)

In landlord's proceeding to annul a determination by the New York City Commission on Human Rights (CCHR), CCHR cross-petitioned for a judgment dismissing the proceeding and enforcing CCHR's order. The court dismissed landlord's petition and granted CCHR's cross-petition, holding that landlord had not established the undue hardship necessary to avoid accommodating tenant's physical disability.

Tenant and his wife occupy a residential apartment in Astoria, Queens, in a building owned by landlord. In 1999, tenant suffered a stroke that left him wheelchair-bound. Tenant sought installation of a ramp, together with other accommodations, and brought a proceeding with the CCHR seeking relief. After a 2003 hearing before an administrative law judge (ALJ), the ALJ concluded that the accommodations would create an undue hardship for landlord. The ALJ relied on landlord's testimony that the building operated at a loss in 2001, broke even in 2002, and was expected to operate at a loss again in 2003. In 2004, CCHR disagreed with the hardship determination, concluding that the alleged losses were the result of landlord's decision to take depreciation losses, which CCHR considered a “tax fiction.” CCHR concluded, however, that the appeal was moot because tenant was now living in a nursing home. Tenant then brought an article 78 proceeding, which resulted in a decision by CCHR to reopen the matter, and, after a hearing on tenant's ability to return to and reside in the building, an ALJ concluded that there was no medical reason that would prevent tenant's return. At that point, CCHR ordered landlord to install a code-compliant ramp at the entrance, and adjust the foyer and entrance doors, including widening the space between them, widening the inner set of doors, installing a lift in the lobby, and reducing the force necessary to open the entrance doors. Landlord then commenced this proceeding for judicial review pursuant to section 8-123 of the city's Administrative Code, arguing that the determination that landlord had discriminated against tenant was arbitrary and capricious, and that CCHR's rejection of the undue hardship finding was unsupported by substantial evidence.

In upholding CCHR's determination, the court first concluded that failing to provide tenant with reasonable accommodation constituted discrimination by comparison with other tenants “who can enter and exit the building without difficulty.” The court then noted that CCHR was entitled to reject the ALJ's hardship conclusions because landlord failed to provide documentary evidence that the building was operating at a loss. The court concluded that depreciation was irrelevant to the issue of undue hardship. Thus, although landlord had established that the cost of the accommodations mandated by CCHR were at least $36,000, landlord was nevertheless required to make such accommodations.

Wrongful Eviction Claims Turn on Whether Fire Demolished Building

Quiles v. Term Equities

NYLJ 10/31/05, p. 26, col. 2

AppDiv, First Dept

(memorandum opinion)

In tenants' wrongful eviction action, landlord appealed from Supreme Court's grant of tenants' summary judgment motion. The Appellate Division reversed and remanded, holding that issues of fact about whether the subject building had been effectively demolished by fire prevented grant of summary judgment to tenants.

When the subject building was damaged by fire in 1998, the New York City Department of Buildings (DOB) ordered occupants to vacate the building because of imminent danger to the safety and life of the occupants. At the behest of rent regulated tenants, the Division of Housing and Community Renewal (DHCR) issued orders reducing rents for those tenants to $1.00 per month each, and entitling tenants to be restored to occupancy of the apartments. Landlord filed a petition for administrative review (PAR), seeking a determination that landlord was under no obligation to rebuild, and that if landlord gutted the building and built new apartments, the DHCR order did not give any tenant the right to a new apartment. DHCR denied the PAR, concluding that landlord's hypothetical scenario about rights if landlord gutted the building was not before the Rent Administrator. Landlord then applied to the DOB for permission to renovate the building, increasing the number of apartments from 16 to 39. Landlord subsequently notified tenants that landlord did not intend to restore the apartments to their former state, and that landlord was under no obligation to offer a former tenant a new apartment. Tenants then brought this action for wrongful eviction. Supreme Court granted summary judgment to tenants, holding that the DHCR's prior order reducing tenants' rent to $1.00 and directing that tenants be restored to the premises was binding on landlord because landlord had never sought review of that order. The court also noted that landlord had never applied for DHCR approval to terminate tenants' leases. Landlord appealed.

In reversing, the Appellate Division noted that tenants are protected from eviction only when their apartments are in existence. When an apartment is burned to the ground, tenant has not been evicted by landlord's failure to restore tenant to possession. The court also suggested that when a building is so damaged by fire that landlord has no choice but to demolish it, landlord is not obligated to offer tenants new apartments in the reconstructed building. The court therefore concluded that tenants' wrongful eviction claims in this case turned on whether the building had been effectively demolished by the fire. The court concluded that triable issues of fact precluded summary judgment on that issue.

Tenant Must Pay Use and Occupancy Despite Landlord's Effort to Evade Rent Stabilization

Levinson v. 390 West End Associates, LLC

NYLJ 10/27/05, p. 24, col. 4

AppDiv, First Dept

(memorandum opinion)

In tenant's action for a declaration that the legal stabilized rent for his apartment was the rent paid by the prior tenant in 1991, landlord appealed from Supreme Court's order remanding to DHCR for determination of the legal rent in accordance with a default formula. The Appellate Division modified to require tenant to post a bond to cover use and occupancy for the 36-month period during which tenant had paid no rent, and to require future use and occupancy payments at a rate equal to that of the lowest rent for a comparable apartment in the building.

When tenant's predecessor vacated the apartment in 1991, landlord entered into a lease with tenant on condition that tenant would consent to have a declaratory judgment rendered against him stating that the apartment was not his primary residence and would be exempt from rent stabilization. Tenant, who was advised by counsel, agreed to landlord's terms, and the consent judgment was entered. In 2001, the Supreme Court, on landlord's motion, vacated the consent judgment, but declined to determine lawful rent because that issue was not raised by the pleadings. Tenant stopped paying rent and brought the instant declaratory judgment action. Landlord answered by seeking to validate the rents tenant had been paying under his initial and renewal leases, a rent, which had reached $1944.28 under tenant's last renewal lease. The Supreme Court, however, held that DHCR should determine the legal regulated rent in accordance with the formula adopted (and subsequently affirmed by the Court of Appeals) in Thornton v. Baron , 5 NY3d 175. Supreme Court, however, did not require payment of past use and occupancy, and required payment of future use and occupancy only at the $903.31 per month paid by the prior tenant in 1991. Landlord appealed.

In modifying, the court rejected landlord's attempt to distinguish this case from Thornton v. Baron (which involved the same building). The court acknowledged that this case did not involve an “illusory tenant”, and that the tenant in this case was the first rent-stabilized tenant, but nevertheless held that the Thornton default formula should be used to determine tenant's rent. The court held, however, that tenant should be required to post a bond to cover back use and occupancy, because there was no reason to permit tenant to occupy the premises rent free pending resolution of a dispute over the rent actually due. The court held that the amount of use and occupancy — past and future — should be set at $1061.68 per month, the amount landlord asserts represents the lowest rent for a two-bedroom apartment in the building. The court noted that tenant had not disputed that number, and emphasized that the court's determination was without prejudice to the rights of either party on the remand to DHCR for application of the Thornton default formula.