May Insights
By Eileen O’Toole, Esq., Contributing Editor
A number of decisions reported here this month involve unique questions concerning rent stabilization, the COVID-19 Emergency Eviction and Foreclosure Prevention Act of 2020 (CEEFPA), and New York State’s authority to interpret and implement disputed provisions of both rent regulatory and eviction moratorium laws.
In Portofino v. DHCR (LVT #31382), the Appellate Division, 2d Dept., dismissed landlords’ long-pending appeal of many wide-ranging amendments to the Rent Stabilization Code issued in 2014. The court characterized much of landlords’ case as “moot” following enactment of the Housing Stability and Tenant Protection Act of 2019 (HSTPA). HSTPA folded into the Rent Stabilization Law many of the 2014 RSC amendments that changed the regulations in a manner inconsistent with the pre-HSTPA amendments to the rent laws.
In REBNY v. NY State Dept. of State (LVT #31394), an Albany court agreed with real estate organizations that the New York Attorney General (NYAG) had improperly interpreted Real Property Law (RPL) Section 238-a(1)(a) in a post-HSTPA guidance memo. The court declared that the NYAG’s attempt to ban tenants from paying landlords’ real estate broker fees was an “error of law.”
RPL Section 227-e, another HSTPA provision, set forth without specific instruction, a landlord’s duty to mitigate damages when a residential tenant breaks a lease. This provision was discussed in detail in 436 & 442 E. 13th St. Owner LLC v. Kfoury (LVT #31418), where the court found that the landlord did mitigate damages, was entitled to the difference in rent when the apartment was re-rented at a lower rate, and was entitled to charge the former tenant for the broker’s fee needed to re-rent the apartment.
In Chernett v. Spruce 1209, LLC (LVT#31422), the court ruled it was too soon to rule on whether tenants could challenge how landlord set rents under the RPTL 421-a tax abatement. Tenants challenged how landlord charged and registered the legal regulated rents when it granted tenants an initial monthly rent concession. Tenants argued that the legal rents should be prorated to reflect a net decrease after factoring in the rent concessions.
In Chrysafis v. James (LVT #31423), five landlords sued the NYAG in federal court to challenge implementation and enforcement of CEEFPA provisions requiring landlords to provide tenants with hardship declaration forms when sending predicate notices and eviction petitions. Rather than grant landlords a requested preliminary injunction, the court dismissed the case, finding no subject matter jurisdiction.
In this issue, aspects of the CEEFPA continue to play out in several housing court cases where several courts ruled on whether the tenant’s purported objectionable conduct exempted the tenant from eviction moratorium protections. Given the continuing extension of New York’s eviction moratorium (currently through Aug. 31, 2021), landlords may now need to seek other avenues of relief to resolve problems. For example, in 19 India Fee Owner, LLC v. Miller (LVT #31416), a Brooklyn Supreme Court judge granted landlord’s application for a temporary restraining order against a tenant who refused to wear a mask or practice social distancing in the building’s common areas and fitness facility.