Southampton Landlord Rented Without Town Permit

Tenant sued landlord, seeking to rescind his lease for the summer rental of a Southampton property for $180,000. The court ruled for tenant. Landlord appealed and lost.  Shortly after the lease started in May 2013, tenant learned that the house lacked a valid rental permit required by the town. The town notified tenant that the lease was illegal and unenforceable. Tenant asked landlord to return all funds paid to date, but landlord rejected tenant’s demand. Tenant had paid landlord $216,000, including all rent, a security deposit, and a utility deposit. Town Code Section 270-3 contained an implied private right of action, so tenant could make claims against landlord for landlord’s alleged violation of that statute. The Town Code was intended to benefit tenants of rental properties by requiring landlords to obtain valid rental permits before collecting rent. The lower court properly determined that the lease was illegal and unenforceable as a result of landlord’s violation of the Town Code. There was also no proof that tenant claimed illegality for personal gain. Tenant surrendered possession of the house shortly after the lease began. 

Ader v. Guzman: Index No. 18423/13, NYLJ No. 1202747187441 (App. Div. 2 Dept.; 1/15/16; Rivera, JP, Chambers, Sgroi, LaSalle, JJ)