By Eileen O’Toole, Esq., Contributing Editor
A number of significant issues were recently revisited by the courts or the DHCR in either follow-up proceedings or matters involving variations on familiar themes.
The federal Eastern District Court denied injunctive relief to landlord-plaintiffs in Chrysafis v. Marks (LVT #31769), after an appeals court permitted landlords to amend their complaint in order to challenge New York’s recent law permitting good faith court challenges to asserted tenant Hardship Declarations. The court took issue with landlords’ claim that any opportunity provided by the law to challenge Hardship Declarations was “illusory,” pointing out that housing courts had been holding fact-based hearings in response to challenges and noting that none of the landlord-plaintiffs had attempted themselves to challenge Hardship Declarations filed by their own tenants.
Acknowledging that the September 2021 eviction moratorium law also established a procedure for seeking a default judgment and warrant in residential eviction proceedings, the NY City Civil Court last month issued DRP-219 (LVT #31756) to outline housing court management of motions for default judgments.
Perhaps in response to continuing housing court delays resulting from the eviction moratorium and Hardship Declarations, another landlord in recent months sought and obtained an injunction against a residential tenant’s objectionable conduct, rather than seeking eviction. In 118 West 27 LLC v. Saltz (LVT #31765), the court required the loft tenant to provide identification of multiple roommates and employees who came and went from the apartment, avoid illegal activity including drug sales and loitering, and not bring motorcycles or mopeds into the elevators of its building.
The DHCR substantially reduced a tenant’s rent overcharge award after the case of Regina Metropolitan Co. LLC was sent back to the DHCR for recalculation. Applying the 2019 Court of Appeals ruling, the DHCR utilized the actual rent paid on the four-year base date as the starting point for adding lawful rent increases. The total overcharge with interest was now $18,742 instead of $171,965. This meant that tenant owed landlord $153,243 in back rent, which the DHCR gave tenant four years to repay. The DHCR also limited attorneys’ fees that tenant could collect to those spent on the administrative proceedings, noting that the agency didn’t have the authority to award attorneys’ fees for the various court appeals. And, besides, tenants lost the case. The lengthy decision in Matter of Carr-Levy/Regina Metropolitan Co. LLC (LVT #31752) provides a detailed summary of how the Regina matter worked its way through the DHCR and the ensuing court appeals.
After a tenant lost a bid before the DHCR for rent-stabilized status of two apartments rented in landlord’s building, an appeals court upheld tenant’s claim for a refund of rent/use and occupancy paid into court or to the landlord while a related nonpayment proceeding was pending. In Trafalgar Co. v. Malone (LVT #31727), the Appellate Term directed landlord to pay back substantial rent deposits to tenant because the units in question had been illegally altered and the building’s C of O wasn’t valid.
The DHCR issued rulings in several cases concerning rent overcharge claims in RPTL 421-g buildings that had been converted from commercial to residential use and made subject to rent stabilization. Decisions in Matter of 50 Murray Street Acquisition LLC (LVT #31747) and Matter of Ninety Five Wall Street LLC (LVT #31746) reiterated that high-rent deregulation didn’t apply to initial 421-g rents, which often were well above former DHCR deregulation thresholds. The DHCR noted in these cases that, unlike cases involving improper deregulation while a building received J-51 benefits, the agency itself was never involved with creating any confusion concerning deregulation of 421-g buildings.
A court upheld DHCR’s ruling that an SRO tenant who became rent stabilized as the result of a 2015 ruling was subject to a rent of $353.50 per month. In Ahmed v. DHCR (LVT #31767), the tenant argued that his legal rent should be $83 per month. But the court found that the DHCR’s application of a sampling method, rather than a default formula, was reasonable to establish the unit’s first rent-stabilized rent in the amount determined by the agency.
Finally, adding to the mix of rulings on 421-a building tenant claims that rent concessions granted to the initial program tenants were disguised preferential rents resulting in rent overcharges, the court in Burrows v. 75-25 153rd St., LLC (LVT #31768) denied the landlord’s motion to dismiss, finding that further hearing was needed on the facts of the case.