Landlord v. Tenant: September 2013 Special Issue

Each month our sister publication, New York Landlord v. Tenant, summarizes approximately 60 decisions by the courts and the Division of Housing and Community Renewal (DHCR) involving owners and tenants. In this Special Issue, we’ll take a look at the year’s most important decisions so far, and how owners should be prepared to respond if they find themselves in similar circumstances.

Evictions May Be Delayed Where Public Assistance Requests Are in Process

In several recent decisions, courts have stayed execution on eviction warrants in order to give tenants more time to pay back rent that was expected to be delivered by the NYC Department of Social Services (DSS).

    In one case where the owner sued to evict an elderly, rent-stabilized tenant for nonpayment of rent, the court ruled for the owner, entered a judgment in the amount of $8,400, and issued an eviction warrant. The court later granted the tenant’s request to vacate the warrant. The owner appealed and lost. The appeals court found that the tenant had shown good cause to vacate the warrant. She had lived in the apartment for 30 years, had tendered partial payments, and had made steady and ultimately successful good-faith efforts to secure emergency rent relief from the city [Archstone Camargue I LLC v. Korte, July 2013; LVT #24998].

    In another case, the owner sued to evict a long-term rent-stabilized tenant for chronic nonpayment of rent. The court ruled for the owner, and then denied the tenant’s request to delay execution on the eviction warrant. The tenant appealed and won based on the fact that she had shown the housing court a written determination from the city approving her request for money to pay the back rent owed. The tenant was merely waiting for the city to release the funds. Execution on the warrant was delayed to give the tenant time to pay the arrears and avoid eviction [Ramou Home Corp., LLC v. Marksman, May 2013; LVT #24834].

    These decisions show reluctance by the courts to permit eviction where emergency assistance funds are forthcoming, and perhaps reflect a tacit acknowledgment of the delays that can occur in the relief application process.

How to Respond: Owners faced with tenant requests to delay eviction under these circumstances should ask for proof that the tenant has been actively pursuing emergency relief. If an owner’s attorney has to appear in court to respond to a tenant’s order to show cause seeking delay of eviction after the warrant has been issued, the owner should request attorney’s fees.

Housing Court Rejects Use of “Robo-Signed” Affidavits in Nonpayment Cases

To commence a summary eviction proceeding based on nonpayment of rent in housing court, an owner must file and deliver to the tenant copies of a notice of petition and petition. The notice of petition doesn’t set a court date but must advise the tenant that he has five days to answer.

    If the tenant fails to appear or answer at the housing court clerk’s office following five days from service of the owner’s papers, no court date is set, and an owner may simply request entry of a default judgment and issuance of the warrant of eviction.

    This is done by submitting an application directly to the housing court clerk’s office. Default applications generally are governed by Civil Practice Law and Rules (CPLR) Section 3215(f), which requires that the owner submit proof of service of the notice of petition and petition, proof of the default—including proof that the owner investigated the tenant’s military status—and proof of the claim, including the amount due. Generally, courts won’t enter default judgments against tenants who are absent due to military service or dependent upon someone who’s away on military service.

    Proof of the amount due was the focus in several recent Bronx Housing Court decisions where the court rejected as insufficient the sworn statements submitted by the owners seeking default judgments [Intervale Ave. Assoc. v. Donlad, February 2013; 2132 Presidential Assets, LLC v. Carrasquillo, March 2013; LVT #24728]. Following examples set by New York courts in cases involving mortgage foreclosures, consumer debt, and no-fault health care provider cases, the court criticized the practice of “robo-signing.”

    A “robo-signer,” the court explained, is a person who quickly signs a number of documents in a limited period of time and, despite swearing that he has personally reviewed the documents and any supporting records, has not done so.

    In one proceeding, the court consolidated 14 nonpayment cases brought by 11 landlord entities that were represented by the same attorney. In each case the same individual signed an affidavit claiming that the tenant had defaulted. Each of the employee’s 14 affidavits stated that:

I am an employee for the petitioner. I have personal knowledge and am fully familiar with the facts and circumstances surrounding this proceeding.

I have reviewed the captioned Petition and verify the facts contained are true to my own personal knowledge.

The within petition remains unsatisfied and no part of the rent demanded in the Petition has been paid.

I respectfully request that the warrant of eviction be issued forthwith and a default judgment be entered.

    The court expressed concern that the owners’ employee didn’t actually have personal knowledge of what was claimed in his statements. Each of the identical statements was silent as to how exactly the employee was personally familiar with the “facts and circumstances” of each case. He didn’t state whether it was his responsibility to maintain the books and records of each, or any, of the 11 different petitioner-owner entities that he claimed were his employer. The employee also didn’t state that it was his responsibility to maintain any of the owners’ records or that the records were true and accurate documents kept in the ordinary course of the owners’ business. The employee also failed to state whether he kept copies of the petitions, and where he reviewed them. There were no sums, references to rent ledgers, or other facts stated to support the statements that no part of the rent demanded had been paid.

    While acknowledging that the employee’s statements were not necessarily untrue, the court’s overriding concern was that robo-signed statements were not actually signed by an individual who had actual first-hand personal knowledge of the facts. The court directed that the employee who signed the 14 affidavits appear at a hearing to present proof of his employment and rent ledgers. The court also ruled that tenants could appear at the hearing to present any proof that payments had been made.

    In another proceeding involving 13 nonpayment petitions with default applications signed by one employee, each application for default judgment was denied, with leave to renew upon submission of a proper affidavit of merit/default stating the basis for the employee’s personal knowledge and setting forth facts for the claim of default such as the review of books or other business records kept in the ordinary course of the owners’ business.

How to Respond: To avoid possible challenges when seeking default judgments, owners should set forth sufficient facts in affidavits of merit/default that are submitted to the housing court. These statements should: (1) be sworn under penalty of perjury; (2) explain the individual’s employment or other relationship to the owner; (3) describe his responsibilities in connection with building management, leasing, and/or rent collection; (4) state whether any portion of the rent demanded up to the time of the petition has been paid; (5) state whether any additional rent has become due since the petition was filed; and (6) itemize the monthly rent that’s outstanding. A copy of the current rent ledger can be attached to this sworn statement as an exhibit.

DHCR Now Accepts Luxury Deregulation Applications Without Inclusion of Unreturned ICFs

Owners seeking luxury deregulation of rent-controlled or rent-stabilized apartments with high rents ($2,500 per month or more) and high tenant household incomes ($200,000 per year or more) must deliver a copy of the DHCR’s Income Certification Form (ICF) to qualifying tenants by May 1 of each year. Tenants are instructed to complete and return the forms to owners, who then must file any deregulation applications by June 30. Owners can file a luxury deregulation application when: (1) a tenant fails to answer an ICF; (2) a tenant admits in response to the ICF that his rent is above the deregulation threshold; or (3) the owner disputes the tenant’s claim that his income is below the threshold.

    Until recently, if the owner didn’t attach a copy of the ICF to its luxury deregulation application, the DHCR would dismiss the owner’s application under all circumstances [see, for example, Matter of 104-106 East 81st Street LLC: DHCR Adm. Rev. Docket No. ZI410033RO (7/10/12), LVT #24293]. But, starting this year, after successful challenges by some owners, the DHCR changed its policy in instances where a tenant failed to answer an ICF.

   In one case, the owner sent the tenant an ICF in early 2011 and later applied for high-rent/high-income deregulation after the tenant failed to respond. The DRA dismissed the owner’s application because the owner didn’t attach a copy of the ICF to its application. The DHCR then denied the owner’s PAR. The owner filed an Article 78 court appeal, claiming that the DHCR’s decision was arbitrary and unreasonable. The owner pointed out that in its case the tenant never filled out and returned the ICF to the owner. The court ruled for the owner, and sent its case and some other similar cases back to the DHCR for reconsideration.

    The DHCR then ruled for the owners. Under Rent Stabilization Code (RSC) Section 2531.4, an owner wasn’t required to attach a copy of the ICF with its application. This code section covered situations where a tenant didn’t return the ICF to the owner. In contrast, under RSC Section 2531.3, if the tenant had filled out and returned the ICF to the owner, the owner was required to submit this form with its application [Matter of 140 West 55th Street: DHCR Adm. Rev. Docket No. BO410007RP (5/10/13), LVT #24904; see also Matter of 120 West 86th Street LLC: DHCR Adm. Rev. Docket No. BM410009RP (2/11/13), LVT #24749; Matter of 20 Beekman Place LLC: DHCR Adm. Rev. Docket No. BM410008RP (3/12/13), LVT #24792].

    After reconsideration, the DHCR sent the cases back to the DRA to determine whether the tenants’ incomes exceeded the deregulation threshold.

How to Respond: If a tenant doesn’t return an ICF to you, and you’re unsure what to do, you should still submit with your luxury deregulation application a copy of the uncompleted ICF along with proof that the ICF was mailed to the tenant.

How to Answer Tenant Requests to Add Spouse to Rent-Stabilized Lease

Owners must offer rent-stabilized tenants one- or two-year renewal leases by giving written notice of the renewal offer not more than 150 days and not less than 90 days before the tenant’s existing lease expires. Rent Stabilization Code (RSC) Section 2522.5(g)(1) provides, with limited exceptions, that a lease must be renewed on the same terms and conditions as the expiring lease.

    One of the exceptions to the “same terms and conditions” requirement is that a rent-stabilized tenant has the right to have his or her spouse added as an additional tenant to the vacancy lease or to any renewal of the lease, provided that the spouse resides in the apartment as his or her primary residence. An owner cannot collect any additional rent increase for the addition of a spouse to the lease.

    By law, a spouse now includes a man or woman in a same-sex marriage. Effective July 24, 2011, New York’s Marriage Equality Act permits gay marriage and requires that marriages of same-sex and different-sex couples be treated equally in all respects under New York laws and regulations. As a result, the right to add a spouse to a rent-stabilized lease applies to gay or lesbian couples. The language of RSC Section 2522.5(g)(1) was even changed to delete a prior description of a “spouse” as a “husband or wife.” New York also recognizes as legal marriages same-sex marriages performed under the laws of other states.

    In contrast, a tenant does not have the right to add the name of another family member or roommate to a rent-stabilized lease. An owner may refuse, for example, to add the name of the tenant’s adult child, sibling, or domestic partner to the lease. Courts specifically have ruled that a domestic partner doesn’t have the same rights as a spouse because “New York gives greater rights to married couples than to persons in other types of relationships” [Zagrosik v. DHCR, July 2006; see also Zunce v. Rodriguez, October 2008].

    In response to a request to add any spouse’s name to a lease or renewal lease, an owner may ask for proof of the union, such as a copy of a marriage certificate. Although RSC Section 2522.5(g)(1) also provides that the spouse to be added should primarily reside in the tenant’s apartment, the code gives no guidance on how that requirement is applied. In addition to proof of the marriage, it appears reasonable for an owner to ask the tenant where the spouse resides and whether the spouse maintains any other residence. In practice, requests for information from the tenant concerning the spouse’s residence or proof of the marriage should be made in a consistent and impartial manner in order to avoid any claim of harassment or discrimination. If an owner refuses a tenant’s request to add his or her spouse to the rent-stabilized lease, the tenant may file a complaint with the DHCR claiming that the owner failed to properly renew the tenant’s lease.

    In one case, a tenant complained to the DHCR after an owner denied her request to add her husband’s name to her renewal lease. The owner claimed that, at the time the tenant made her request in October 2010, the husband didn’t live in the apartment. But, by the time the tenant filed her complaint in December 2010, the husband had moved into the apartment. The DHCR ruled for the tenant and directed the owner to add the husband’s name to the tenant’s renewal lease [Matter of Melohn: DHCR Adm. Rev. Docket No. AQ410007RO (2/14/13); LVT #24748].

    One question frequently asked by owners is whether a spouse can be added to the tenant’s rent-stabilized lease at any time. In one case, an owner argued that a spouse could be added to a tenant’s lease only at the time of the scheduled lease renewal. The DHCR ruled against the owner, noting that the owner was required “to amend the lease, whether already in force or having been merely offered” [Matter of Melohn, supra].