Category Archives: landlord tenant law

May The Landlord of a NY Loft Evict a Tenant Who Has Not Paid Rent Even When The Landlord Has Not Obtained a Residential Certificate of Occupancy?

Will a landlord who has not obtained a residential certificate of occupancy in accordance with New York Multiple Dwelling Law § 302 be successful in an action in ejection against a tenant for unpaid rent? In Chazon, L.L.C. v. Maugenest, 2012 NY Slip Op 04373 (N.Y. June 7, 2012), the New York Court of Appeals answered this question in the negative.

In that case, Plaintiff, the owner of a loft building in Brooklyn, brought an action in ejection seeking to evict its tenant (“Defendant”) for unpaid rent.  Defendant had not paid rent since 2003.

Until the state legislature enacted the Multiple Dwelling Law Article 7-C (“Loft Law”) in 1982, it was illegal to occupy lofts for residential purposes.  Lofts were formerly used only for commercial purposes and were unsuitable for residential use.  Before the enactment of the Loft Law, residential tenants had no legal right to occupy the space and landlords were not legally justified in collecting rent.  However, pursuant to the Loft Law, landlords were given certain guidelines to follow in order to be in accordance with the law.

Section 284 of the law established a “series of deadlines by which the owners of interim multiple dwellings are required to alter them to conform to safety and fire protection standards, ultimately doing everything necessary to obtain a residential certificate of occupany.” See id. at 2.

In Chazon, the Court of Appeals held that the Plaintiff was not “entitled either to collect rent or to evict the tenant” because Plaintiff had not obtained a residential certificate of occupancy.  Id.  Pursuant to the Loft Law § 301 (1), multiple dwellings cannot be occupied in whole or in part until a residential certificate of occupancy has been obtained.  The Loft Law defined “interim multiple dwelling” as any of these illegally occupied buildings.  See Multiple Dwelling Law § 281.  As such, the Court of Appeals agreed that “no rent shall be recovered by the owner of such premises . . . and no action or special proceeding shall be maintained therefor, or for possession of said premises for nonpayment of such rent” until the certificate has been obtained. Multiple Dwelling Law § 302 (1); see id.

Ultimately, the Court of Appeals left Plaintiff and Defendant in the same predicament they were in before commencement of the suit. It temporarily protected the Defendant from eviction.  It held that, u ntil Plaintiff complied with the residential certificate of occupancy requirement, Defendant would be allowed to continue living rent free.  The Defendant’s complaint was dismissed.

Comments/Questions: gdn@gdnlaw.com

© 2012 Nissenbaum Law Group, LLC

Can a Tenant Recover Attorney’s Fees From a Landlord if the Lease Does Not Provide for That Right?

Landlords are generally the parties that prepare the lease agreements into which their tenants enter. This unequal bargaining power typically allows landlords to insert language that requires tenants to pay the landlord’s attorney’s fees for any legal claims that arise out of their agreement, but does not require the landlord to pay the tenant’s attorneys fees for breach of the lease terms by the landlord. New York law requires there to be either a contractual or statutory basis for a prevailing party to collect attorney’s fees. But if there is no express language in a lease agreement allowing for tenants to demand attorney’s fees from landlords, does that mean tenants will not able to collect them?

This question was at issue in a recent New York case. Casamento v. Juaregui. Casamento v. Juaregui, 2011 WL 4090175 (2d. Dept. 2011). In the case, Luis Juaregui (“the tenant”) entered into a lease agreement for a Queens apartment owned by Dominic Casamento (“the landlord”). Paragraph 7 of the agreement required the tenant to receive the prior written consent of the landlord before making any alterations to his apartment. Paragraph 10 held the tenant liable for any damages or expenses incurred by the landlord relating to any neglectful act of the tenant. Additionally, paragraph 16 specifically referred to attorneys’ fees, stating that “[a]ny rent received by Landlord for the re-renting shall be used first to pay Landlord’s expenses” and including “reasonable legal fees” within the definition of “expenses.” Id. at 288.

In March 2007, the landlord alleged that the tenant had violated paragraphs 7 and 10 by making alterations to certain rooms without the landlord’s consent and also claimed the tenant was responsible, per the terms of the lease, for the landlord’s legal fees. He served a notice of termination and commenced a holdover proceeding.

The question for the court in Casamento was whether the lease at issue was covered by Real Property Law (“RPL”) §234. That law governs residential leases and addresses the imbalance resulting from the unequal bargaining power between landlords and tenants. It establishes an implied covenant that addresses when a tenant will be able to recover attorneys’ fees incurred in the successful defense of a summary proceeding to recover possession of a leasehold. If the court determines that the lease is covered by §234, the tenant should be able to collect attorney’s fees from the landlord.

Section 234 states that courts shall construe a lease to include this implied covenant whenever:

1)  a lease of residential property shall provide that in any action or summary proceeding the landlord may recover attorneys’ fees and/or expenses incurred as the result of the failure of a tenant to perform any covenant or agreement contained in such lease, or

2) that amounts paid by the landlord therefore shall be paid by the tenant as additional rent

See RPL §234.

The Casamento Court determined that the outcome of any claim pursuant to §234 depends upon an analysis of the specific language of the lease provision at issue. In that case, it held that “Paragraph 16, thus, literally fits within the language of the first prong of section 234, since it does ‘provide that in any action or summary proceeding the landlord may recover attorneys’ fees and/or expenses incurred as the result of a failure of the tenant to perform any covenant or agreement contained in such lease.’” Additionally, the court found that construing the covenant in favor of the tenant is “consistent with the Legislature’s remedial purpose of effecting mutuality in landlord-tenant litigation and helping to deter frivolous and harassing litigation by landlords who wish to evict tenants.” The court said that RPL §234 helps avoid a situation where a landlord would have nothing to lose by instituting an eviction proceeding with a frivolous factual basis where there was  prospect of re- enting for a higher amount and the lease included a provision enabling the landlord to recover attorney’s fees. Because the Court determined that RPL §234 applied, it held that tenants can recover attorney’s fees from landlords.

Comments/Questions: gdn@gdnlaw.com

© 2012 Nissenbaum Law Group, LLC