Landlord & Tenant Law

In affirming, the Appellate Division held that landlord met its initial burden by demonstrating that the parties did not contemplate that landlord would be liable for exposure to second-hand smoke, and tenant failed to raise a triable issue of fact in opposition.

*****

Tenant Failed to Establish Constructive or Actual Eviction

Fieldstone Capital Inc. v. Ryan & Conlon, LLP NYLJ 7/2/19, p. 21, col. 1 AppTerm, First Dept. (memorandum opinion)

In landlord's commercial nonpayment proceeding, landlord appealed from Civil Court's dismissal of the petition and order directing landlord to credit tenant's account with an 80% rent abatement. The Appellate Term reversed and granted the petition, holding that tenant had not established constructive or actual eviction from the premises.

The commercial lease authorized landlord to make repairs and alterations to any portion of the building or demised premises, with no allowance to tenant for diminution of rental value, and no liability by the owner for inconvenience. The lease also provided that tenant's sole remedy for landlord's failure to comply with any covenant of the lease would be an action for breach of contract. When landlord began renovation work outside tenant's 7^th floor law offices, tenant withheld rent, claiming partial constructive and actual eviction. Landlord then brought this nonpayment proceeding. Civil Court held that tenant had established an eviction, and awarded tenant a credit of 80% of rent during the period of construction. Landlord appealed.

In reversing, the Appellate Term started by noting that to establish an eviction, actual or constructive, tenant must establish a wrongful act by landlord. In this case, because the lease itself entitled landlord to make the renovations, even if they interfered with tenant's enjoyment of the premises, tenant could establish no wrongful act. In addition, the court held that tenant could not establish constructive eviction because tenant never abandoned the premises, and could not establish actual eviction because tenant could not establish that landlord physically excluded or expelled tenant from the premises. The court held that because landlord was the prevailing party, it was entitled to recover attorneys' fees, pursuant to a provision in the lease.

*****

Failure to Send Statutory Notice Subjects Apartment to Rent Stabilization

Fuentes v. Kwik Realty, LLC NYLJ 7/31/19, p. 23, col. 2 AppDiv, First Dept. (memorandum opinion)

In tenant's action for a declaration that his apartment is subject to rent stabilization, and to collect damages for a rent overcharge, landlord appealed from Supreme Court's grant of partial summary judgment on the rent overcharge complaint, and from that court's declaration that the apartment Is rent-stabilized. The Appellate Division modified to deny tenant summary judgment on the rent overcharge complaint, but affirmed the declaration that the apartment was rent-stabilized.

In February 2010, tenant leased an apartment in the subject 48-unit apartment building located at 520 West 183^rd Street. The lease represented that the apartments was an "exempt unit," and included a "preferential rent" of $1,300, although the listed per-unit charge was $2,200 per month. The lease included no rent stabilization riders, and no reference to rent stabilization. The parties renewed the lease three separate times, each for a one-year period. Each renewal lease included a preferential rate that was significantly lower than the unit charge. In late 2013, landlord sent tenant a notice indicating that landlord would not renew the lease, and demanding that tenant vacate due to "hazardous conditions." Tenant continued to pay rent, but brought this action seeking declaratory relief and money damages for a rent overcharge. Supreme Court declared the apartment rent stabilized and granted partial summary judgment on the overcharge complaint, remanding to a referee for a determination of damages. Landlord appealed.

In modifying, the Appellate Division first upheld the declaration that landlord was entitled to a rent-stabilized lease. The court emphasized that tenant, as the first non-stabilized tenant, was entitled to statutory notices indicating the last regulated rent, the reason the apartment is no longer subject to stabilization, and how the rent amount is computed. (Rent Stabilization Code, sect. 2522.5[c][1]. When the owner fails to provide that rider, the owner is not entitled to collect rent in excess of the rent set forth in the prior lease. Because, in this case, landlord had not provided tenant with the required notice, the court held that tenant was entitled to a rent stabilized lease. However, the court held that tenant was not entitled to prevail on his overcharge complaint because rental history beyond four years before filing of a complaint may not be used to calculate an overcharge, although it can be used to determine rent stabilization status.

*****

Overcharge Claim Dismissed Because DHCR Had Primary Jurisdiction

Williams v. Daphne Realty NYLJ 7/05/19, p. 21, col. 1 Supreme Ct., N.Y. Cty (Perry, J.)

In tenant's action alleging rent overcharges, landlord moved to dismiss so that DHCR could resolve the claims. The court dismissed, invoking the doctrine of primary jurisdiction.

Tenant claimed that he paid $84,000 in overcharges because landlord claimed to have made $90,000 in fictional individual apartment improvements which, landlord claimed, were sufficient to deregulate the apartment. Landlord moved to dismiss, contending that DHCR should resolve the dispute.

In agreeing with landlord and dismissing the claim, the court acknowledged that it had concurrent jurisdiction with DHCR, but indicated that DHCR has the necessary expertise and discretion in calculating legal rent and determining whether a unit is subject to rent regulation.