Landlord & Tenant

AppDiv, Second Dept

(memorandum opinion)

In a personal injury action against contractor and owner of the premises, injury victim appealed from Supreme Court's grant of summary judgment to owner. The Appellate Division affirmed, holding that victim had failed to allege a statutory violation or a structural or design defect that would trigger liability by an out-of-possession landlord.

Victim was injured when she allegedly slipped and fell on ice on the subject premises. Victim brought an action against, among other parties, the owner of the premises. Owner sought summary judgment, contending that under the provisions of a 'triple net lease,' owner was an out-of-possession landlord not responsible for repairs or maintenance. The Supreme Court granted the summary judgment motion, and the injury victim appealed.

In affirming, the Appellate Division noted that because the lease established that owner was an out-of-possession landlord without responsibility for removing ice or snow, owner had established its prima facie entitlement to summary judgment. The court then turned to victim's argument that because owner had a leasehold right to re-enter for inspection and repair, owner retained sufficient control to be subject to liability for the injuries. The court held, however, that owner's right to re-enter was insufficient for imposition of liability when the victim failed to allege a statutory violation and failed to allege that her injury was caused by a significant structural or design defect.

Eviction Available to Landlord Against Tenant Who Violated Roommate Law

First Hudson Capital, LLC v. Seaborn

NYLJ 4/5/07, p. 33., col. 4

AppTerm, First Dept

(2-1 decision; memorandum opinion; dissenting opinion by McCooe, J.)

In landlord's summary holdover proceeding, rent-stabilized tenant appealed from Civil Court's award of possession and use and occupancy to landlord. The Appellate Term modified, sustaining the award of possession and holding that eviction was available to a landlord against a profiteering tenant.

Tenant moved into the subject apartment in 1976. In 2004, landlord acquired the building. In July 2004, a brother of landlord's managing agent rented a room in tenant's apartment for $900 per month. Tenant had previously rented a room to other roommates at rents ranging from $600 to $900 per month. Tenant's rent for the apartment as a whole is approximately $973. When landlord brought this proceeding to recover possession, relying on the Roommate Law (Rent Stabilization Code, sec. 2525.7), tenant refunded excess rents to prior roommates, and sought to refund excess rent collected from the managing agent's brother, but tenant's check was returned uncashed. Civil Court then awarded possession to landlord, and held that landlord was entitled to recover fair market value from tenant for use and occupancy of the premises. Tenant appealed.

The Appellate Term majority relied on evidence establishing that tenant had placed at least seven advertisements for roommates in the The Village Voice over a three-year period, and that at least two of the roommates were charged more than the entire rent for the apartment. On these facts, the court concluded that tenant's commercial exploitation of his rent-stabilized apartment required eviction. The court modified Civil Court's judgment to limit landlord's recovery of use and occupancy to the rent-stabilized rent plus additional amounts received by tenant from the illegal roommate arrangement. That is, landlord was not entitled to recover market rent.

Justice McCooe, dissenting, argued that the roommate provision in the Rent Stabilization Code does not authorize eviction as a remedy for rent overcharges, at least in the absence of bad faith or an intent to profiteer. Here, he saw no evidence of tenant's bad faith, and he also concluded that only overcharged roommates ' not landlords ' should be able to recover the amount of any overcharge.

COMMENT

Enacted in 2000, section 2525.7 of the Rent Stabilization Code prohibits a rent-stabilized tenant from charging a roommate more than a proportional share of rent, but is silent on the remedy available for violation. By comparison, section 2525.6, enacted simultaneously, prohibits rent-stabilized tenants from charging subtenants more than the legally stabilized amount, but explicitly lists eviction and treble damages as available remedies. Prior to the enactment of RSC section 2525.7, courts had indicated that the rent stabilization laws did not regulate rents charged to roommates, and had precluded landlords from evicting tenants for 'overcharging' roommates. Thus, in 520 East 81st Street Assoc. v. Roughton-Hester, 157 A.D.2d 199, the court refused to permit landlord to evict tenant after tenant charged her roommate $600 monthly for rent in an apartment stabilized at $398.16 per month, emphasizing the absence of a statutory provision prohibiting profiteering in a roommate relationship.

Courts have not permitted landlords to evict tenants for violations of section 2525.7, when there is no evidence of an intention by tenant to profiteer from a roommate. Thus, in 54 Greene St. Realty Corp. v. Shook, 8 A.D.3d 168, landlord attempted to evict a tenant who charged a roommate more than half of the rent for tenant's rent-stabilized apartment. Because the court found no bad faith or intent to profiteer on the part of the tenant, and because the overcharge was deemed small, eviction was not granted.

By contrast, courts have read the section 2525.7 to authorize eviction when a tenant has profited substantially from the rent charged to roommates. In West 148 LLC v. Yonke, 11 Misc. 3d 40, tenant charged a series of roommates twice the monthly stabilized rent and included the apartment in hotel listings. The court concluded that such commercial exploitation of the apartment justified eviction as a remedy. In RAM 1 LLC v. Mazzola, 2001 N.Y. Misc. LEXIS 747, the court held that eviction was an appropriate remedy against a tenant who charged roommate $2,200 per month when the legal monthly rent for the entire premises was $1,847.77 per month. Though both West and Ram are lower court decisions, the First Department has also suggested that eviction is available by citing these cases, with apparent approval, in 54 Greene. Eviction as a remedy has also been suggested in Roxborough Apts. Corp. v. Becker, 11 Misc. 3d 99, where tenant charged three roommates an aggregate sum surpassing the monthly stabilized rent by $146. The court stayed an execution of a possessory judgment in landlord's favor by allowing the tenant to cure by repaying the roommates the amounts by which the roommates were overcharged. The court afforded tenant this opportunity because it did not find the overcharge to reflect commercial exploitation, though noting that the amount was not insignificant.

Out-Of-Possession Landlord Not Liable for Injuries

Lindquist v. C & C Landscape Contractors, Inc.

NYLJ 3/19/07, p. 34, col. 4

AppDiv, Second Dept

(memorandum opinion)

In a personal injury action against contractor and owner of the premises, injury victim appealed from Supreme Court's grant of summary judgment to owner. The Appellate Division affirmed, holding that victim had failed to allege a statutory violation or a structural or design defect that would trigger liability by an out-of-possession landlord.

Victim was injured when she allegedly slipped and fell on ice on the subject premises. Victim brought an action against, among other parties, the owner of the premises. Owner sought summary judgment, contending that under the provisions of a 'triple net lease,' owner was an out-of-possession landlord not responsible for repairs or maintenance. The Supreme Court granted the summary judgment motion, and the injury victim appealed.

In affirming, the Appellate Division noted that because the lease established that owner was an out-of-possession landlord without responsibility for removing ice or snow, owner had established its prima facie entitlement to summary judgment. The court then turned to victim's argument that because owner had a leasehold right to re-enter for inspection and repair, owner retained sufficient control to be subject to liability for the injuries. The court held, however, that owner's right to re-enter was insufficient for imposition of liability when the victim failed to allege a statutory violation and failed to allege that her injury was caused by a significant structural or design defect.

Eviction Available to Landlord Against Tenant Who Violated Roommate Law

First Hudson Capital, LLC v. Seaborn

NYLJ 4/5/07, p. 33., col. 4

AppTerm, First Dept

(2-1 decision; memorandum opinion; dissenting opinion by McCooe, J.)

In landlord's summary holdover proceeding, rent-stabilized tenant appealed from Civil Court's award of possession and use and occupancy to landlord. The Appellate Term modified, sustaining the award of possession and holding that eviction was available to a landlord against a profiteering tenant.

Tenant moved into the subject apartment in 1976. In 2004, landlord acquired the building. In July 2004, a brother of landlord's managing agent rented a room in tenant's apartment for $900 per month. Tenant had previously rented a room to other roommates at rents ranging from $600 to $900 per month. Tenant's rent for the apartment as a whole is approximately $973. When landlord brought this proceeding to recover possession, relying on the Roommate Law (Rent Stabilization Code, sec. 2525.7), tenant refunded excess rents to prior roommates, and sought to refund excess rent collected from the managing agent's brother, but tenant's check was returned uncashed. Civil Court then awarded possession to landlord, and held that landlord was entitled to recover fair market value from tenant for use and occupancy of the premises. Tenant appealed.

The Appellate Term majority relied on evidence establishing that tenant had placed at least seven advertisements for roommates in the The Village Voice over a three-year period, and that at least two of the roommates were charged more than the entire rent for the apartment. On these facts, the court concluded that tenant's commercial exploitation of his rent-stabilized apartment required eviction. The court modified Civil Court's judgment to limit landlord's recovery of use and occupancy to the rent-stabilized rent plus additional amounts received by tenant from the illegal roommate arrangement. That is, landlord was not entitled to recover market rent.

Justice McCooe, dissenting, argued that the roommate provision in the Rent Stabilization Code does not authorize eviction as a remedy for rent overcharges, at least in the absence of bad faith or an intent to profiteer. Here, he saw no evidence of tenant's bad faith, and he also concluded that only overcharged roommates ' not landlords ' should be able to recover the amount of any overcharge.

COMMENT

Enacted in 2000, section 2525.7 of the Rent Stabilization Code prohibits a rent-stabilized tenant from charging a roommate more than a proportional share of rent, but is silent on the remedy available for violation. By comparison, section 2525.6, enacted simultaneously, prohibits rent-stabilized tenants from charging subtenants more than the legally stabilized amount, but explicitly lists eviction and treble damages as available remedies. Prior to the enactment of RSC section 2525.7, courts had indicated that the rent stabilization laws did not regulate rents charged to roommates, and had precluded landlords from evicting tenants for 'overcharging' roommates. Thus, in 520 East 81st Street Assoc. v. Roughton-Hester, 157 A.D.2d 199, the court refused to permit landlord to evict tenant after tenant charged her roommate $600 monthly for rent in an apartment stabilized at $398.16 per month, emphasizing the absence of a statutory provision prohibiting profiteering in a roommate relationship.

Courts have not permitted landlords to evict tenants for violations of section 2525.7, when there is no evidence of an intention by tenant to profiteer from a roommate. Thus, in 54 Greene St. Realty Corp. v. Shook, 8 A.D.3d 168, landlord attempted to evict a tenant who charged a roommate more than half of the rent for tenant's rent-stabilized apartment. Because the court found no bad faith or intent to profiteer on the part of the tenant, and because the overcharge was deemed small, eviction was not granted.

By contrast, courts have read the section 2525.7 to authorize eviction when a tenant has profited substantially from the rent charged to roommates. In West 148 LLC v. Yonke, 11 Misc. 3d 40, tenant charged a series of roommates twice the monthly stabilized rent and included the apartment in hotel listings. The court concluded that such commercial exploitation of the apartment justified eviction as a remedy. In RAM 1 LLC v. Mazzola, 2001 N.Y. Misc. LEXIS 747, the court held that eviction was an appropriate remedy against a tenant who charged roommate $2,200 per month when the legal monthly rent for the entire premises was $1,847.77 per month. Though both West and Ram are lower court decisions, the First Department has also suggested that eviction is available by citing these cases, with apparent approval, in 54 Greene. Eviction as a remedy has also been suggested in Roxborough Apts. Corp. v. Becker, 11 Misc. 3d 99, where tenant charged three roommates an aggregate sum surpassing the monthly stabilized rent by $146. The court stayed an execution of a possessory judgment in landlord's favor by allowing the tenant to cure by repaying the roommates the amounts by which the roommates were overcharged. The court afforded tenant this opportunity because it did not find the overcharge to reflect commercial exploitation, though noting that the amount was not insignificant.