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FRAZER FIGHTS FOR TENANT EVICTED BY VACATE ORDER; FEATURED IN TRIBECA TRIB

David’s vigorous defense of a tenant vacated by the City when the building began to collapse was written up by the Tribeca Trib  – photos and all!


APPELLATE COURT AFFIRMS IMPORTANT J-51 VICTORY

As noted in a previous post David scored a big win for tenants in buildings in receipt of J-51 tax abatements when he convinced a Housing Court judge to vacate a stipulation signed by a tenant without benefit of counsel. In that stipulation, the tenant agreed to pay the full rent claimed due by the landlord even though the rent had never been properly registered or recognized as rent stabilized.

The landlord appealed and the appellate court affirmed the lower court. The case now goes back to Housing Court to determine the legal rent and the amount of the overcharge due to the tenant.


LOFT LAW DEADLINE PASSES

The deadline by which to submit coverage applications under the Loft Law passed on March 11, 2014. Tenants in buildings that do not have a pending application are now barred from coverage. Tenants in buildings in which there is a pending application or which has already been registered may still be allowed to obtain coverage. The Loft Board may allow post-deadline applications in those buildings. Stay tuned.

Tenants shut out by the passage of the deadline, should become involved in the lobbying campaign to extend the deadline retroactively. The campaign is being run by the good and hard-working folks at NYC Loft Tenants. If you haven’t done so already, GET INVOLVED. The website is http://nyclofttenants.org/.


DAVID DEFEATS LANDLORD’S “SRO” DEFENSE IN LOFT LAW COVERAGE CASE

Collective living arrangements, where each tenant has his or her own bedroom and share kitchen, bath and living areas, are very common in residential lofts. Landlords have argued that these arrangements are akin to single-room occupancy hotels [“SRO’s”] and, as such, cannot be covered by the Loft Law.

In a decision after a five-day trial issued on February 27, 2014, Judge Tynia Richard forcefully rejected the “SRO” defense and found David’s clients to be covered by the Loft Law. This decision represents a major victory for loft tenants.


DAVID CONVINCES JUDGE TO DISMISS EVICTION PROCEEDING

David’s client, a rent-stabilized tenant, occupied an apartment regulated under a state program to create moderate-income housing. She faced eviction because, according to the landlord, her family composition did not comply with the applicable rules. David moved to dismiss the case based upon a defective notice that did not apprise the tenant of the nature of her supposed violation. In Studebaker LP v. Prendergast, Index No. L&T 63118/13 (Civ.Ct. Kings Co. Jan, 6, 2014), Judge Marcia Sikowitz agreed and dismissed the landlord’s petition.


DAVID’S CLIENTS FEATURED IN NEW YORK TIMES

In the annals of Brooklyn lofts, the building at 475 Kent Avenue and its intrepid artist-tenants stands out. It is a warhorse industrial building along the waterfront with spectacular views that through hard work and determination has become a vibrant community of artists, as recognized in this wonderful article in the New York Times.

Several years ago, the tenants were summarily vacated from their homes by the City because of an illegal matzo bakery in the basement. With David’s assistance, the tenants worked with the landlord to install a fire safety system and were restored to possession.

More recently, and also with David’s assistance, the tenants gained protection under the Loft Law. The landlord is now obligated to legalize the building for residential use and the tenants are shielded from arbitrary evictions and confiscatory rent increases.


CAMERAS IN THE HALLWAY: WHAT’S LEGAL?

One increasingly common landlord technique used to gather evidence against tenants is a camera in the hallway that records the comings and goings from a specific apartment. Sometimes these cameras are installed in plain view; sometimes they are disguised as smoke detectors or hidden in exit signs or elevator call buttons. Video from the camera can be used by the landlord in court to prove that a tenant is not occupying the apartment as her primary residence or that a family member claiming succession rights hasn’t really been living there. They can also been used to show that the tenant has been subletting or renting the apartment out to transients through AirBnB or similar service.

But are they legal? The short answer is, unfortunately, yes. New York does not have any statutory or common law general right to privacy. The Civil Rights Law protects privacy only for unauthorized use of a person’s image in advertising. Civ. Rights Law §§50 & 51. The Penal Law makes unauthorized surveillance a crime but only if there is a “reasonable expectation of privacy.” Penal Law §250.45. And that’s the rub. Courts have ruled that there is no reasonable expectation of privacy in a common hallway, or even in your apartment when the door is open. Thus, at least one court has ruled that a camera that peers directly into an apartment when the door is open is not an invasion of privacy. Otero v. Houston Street Owners Corp., 2012 NY Slip Op 30440(U) (Sup.Ct. NY Co.).

The Otero court did recognize that a tenant might have a cause of action against a landlord for the obscure common-law claim of prima facie tort. That, however, is a very difficult claim to prove. Among other things, a tenant would have to show the landlord’s sole intent in installing a camera was to inflict harm and that there was no justification or excuse. In most cases, however, as long as the landlord has a reasonable basis to suspect the tenant does not occupy the apartment or is subletting or committing another lease violation — even if it turns out to be wrong — it will have a justification for the camera.

The lesson here is that tenants who are vulnerable to a primary residence, unauthorized subletting or other claim should be aware that they might be on Candid Camera.


REGULATED TENANTS BEWARE: AIRBnB MAY BE YOUR DOWNFALL

In recent months the media has been full of reports about the City and State’s attempts to curtail the increasingly popular — and lucrative — practice of tenants renting out their apartments, or rooms in their apartments, to tourists through websites such as Airbnb or VRBO. Many tenants who engage in this practice were buoyed by a decision of the NYC Environmental Control Board dismissing a violation issued against a tenant who rented a room in his apartment to a tourist for less than 30 days. While this ruling saved the tenant from having to pay a fine, it will not necessarily save him — or you — from eviction. That’s because a violation of the Building Code and a violation of a lease or the rent regulations are two different things. Even if a tenant’s use of Airbnb or similar service is not a violation of the former, it may be a violation of the latter.

First, a brief explanation of why the tenant in the ECB case prevailed. The tenant had been charged with using the apartment in violation of the certificate of occupancy, which allowed only for use as a permanent residence. The ECB dismissed the violation because of two things: 1. he rented the second room in his apartment for less than 30 days; and 2. his co-tenant remained in occupancy. The ECT ruled that under the NYS Multiple Dwelling Law, occupancy of the apartment by a paying lodger for less than 30 days while the tenant is also in occupancy was not inconsistent with the status of the apartment as a permanent residence.

The takeaway from the ECB decision is that, for Building Code violation purposes, it is not unlawful for a tenant to rent out a room for less than 30 days so long as the tenant is also residing in the apartment.  But, regardless of the Building Code, these rentals may run afoul of lease restrictions and/or the Rent Stabilization Code and Loft Board Rules.

As a threshold matter, any regulated tenant who uses Airbnb or similar service to rent out her apartment when she is not present has engaged in an unauthorized sublet. If the tenant has collected more than the legal rent, she is subject to eviction without the right to cure. See Continental Towers LP v. Freurman, 128 Misc.2d 680 (App.Term 1st Dep’t 1985). This includes loft tenants who rent out a subdivided portion of their space. See BLF Realty Holding Corp. v. Kasher, 299 AD2d 87 (1st Dep’t 2002). In other words, occupants of free-standing subdivided units are subtenants, not roommates.

Most residential leases restrict occupancy to a tenant and the tenant’s immediate family. The “Roommate Law”, allows a tenant to have a roommate notwithstanding such restrictions. While the Rent Stabilization Code bars a prime tenant from charging a roommate a “disproportionate share” of the rent, none of the rent regulatory schemes allow a landlord to evict a tenant for overcharging a roommate. See First Hudson Capital LLC v. Seaborn, 54 AD3d 251 (1st Dep’t 2008) [rent stabilization]; 270 Riverside Drive LLC v. Braun, 4 Misc3d 77 (App.Term 1st Dep’t 2004) [rent control]; Giachino Enterprises LP v. Inokuchi, 7 Misc.3d 738 (Civ.Ct. NY Co. 2005) [Loft Law].

Nevertheless, courts have gone out of their way to avoid finding that short-term paying occupants are “roommates.” If the court senses that the tenant is “profiteering” or using the apartment for “commercial exploitation,” it will find a way to evict the tenant even if the tenant remains in occupancy. Some courts have simply held that “short-term transient” occupants are subtenants, not roommates. See, e.g., 220 West 93rd St LLC v. Stavrolakes, 33 AD3d 491 (1st Dep’t 2006). Other cases have found that operating a bed-and-breakfast changes the character of the apartment into a commercial premises. See, e.g., West 148 LLC v. Yonke, 11 Misc.3d 40 (App.Term 1st Dep’t 2006); Peck v. Lodge, 2003 NY Slip Op 30230(U) (Sup.Ct. NY Co.). These restrictions likewise apply to Mitchell-Lama apartments. Padilla v. Levy, 300 AD2d 62 (1st Dep’t 2002).

Peck is a cautionary tale. The tenant in that case was an elderly woman who claimed she required the income from her “roommates” to pay her rent and otherwise support herself. The court, however, was not amused and granted the landlord a judgment of possession and warrant of eviction.

The bottom line is that a rent-regulated tenant who uses Airbnb or similar service is placing their home at risk.


NEW DEVELOPMENTS IN MITCHELL-LAMA SUCCESSION

“Mitchell-Lama” housing is an important component of New York City’s affordable housing scheme. It consists of low- and middle-income coops or rentals regulated by the state [through the Division of Homes & Community Renewal] or the city [through the Department of Housing Preservation & Development]. In recent weeks, there has been big news — both good and bad — as to the right of family members to succeed to a Mitchell-Lama apartment when the tenant of record leaves.

Like rent stabilization, both state and city Mitchell-Lama rules require a family member claiming succession rights to have lived in the apartment with the tenant of record for at least two years immediately prior to the date the tenant of record permanently vacates. During this period, the apartment must be the primary residence of both the tenant and the family member. Mitchell-Lama, however, imposes an additional requirement, namely, the family member must have been listed on the annual income certification form filed with the housing company. This is the form that determines the level of rent subsidy, if any, the tenant is eligible to receive. This requirement has imposed a roadblock to succession for many family members who, through no fault of their own, were not listed. Sometimes the tenant leaves them off for inappropriate reasons such as receiving a bigger rent subsidy. More often, however, the tenant is elderly or infirm and doesn’t understand the need to include the family member.

In a recent case involving a state Mitchell-Lama, however, the Court of Appeals significantly loosened the rigidity of the income certification requirement. In Murphy v. DHCR, it was conceded that the tenant’s son had lived in the apartment his entire life. His mother included him on the income affidavit for every year except the one immediately before she permanently vacated the apartment. DHCR argued that the failure to appear on this one affidavit [out of more than 30!] barred the son from claiming succession rights. Thankfully, the Court of Appeals disagreed and held that it was “arbitrary and capricious” and in contravention of the purposes of the Mitchell-Lama law to evict the son based on this one instance of a missing income certification. This now opens the door to other family members to claim succession when there’s a legitimate excuse for failing to appear on the certification.

Now, the bad news. In a parting shot from Mayor Bloomberg, the city is proposing to amend the HPD Mitchell-Lama regulations to eliminate nieces, nephews, aunts and uncles from the list of family member eligible to succeed to a tenancy. More troubling, however, it is also proposing to eliminate “non-traditional family” members and adopted children. “Non-traditional” family members include unmarried life partners and de facto parent-child relationships. And, most troubling, the proposed regulations would limit succession rights to situations where the tenant of record dies or moves into a nursing home. This will imperil succession claims for parents abandoned by a spouse where the latter happened to be the tenant of record. It would also eliminate succession if the tenant simply moves to an independent living facility or the condo in Florida.  More information about the proposed regulations can be found here. If you are concerned about these rule changes, be sure to call your local City Council member and Mayor Bloomberg.


Appellate Court Approves Co-op’s Plan to Impose Changes in Apartment Dimensions

In the never ending battle between co-op boards and tenant-shareholders, co-op boards recently scored a big victory.  In Goldstone v. Gracie Towers Apartment Corp., the Appellate Division, First Department, held that a board’s plan to restore an apartment damaged by a catastrophic leak and toxic mold was acceptable even though it involved reconfiguring the apartment and eliminating 50 square feet of living space from the 1400-square foot apartment. The unanimous four-judge panel found that the loss of space was de minimus.

The question left unanswered by the court is:  if loss of approximately 4% of an apartment’s livable space is de minimus, where does one draw the line? 5%? 10%?  As with many precedents, those questions will have to be answered by the next case.

The silver lining for the tenant-shareholder in this case is that the court left open the possibility that she will be entitled to a reduction in her monthly maintenance.