Accounting of Funds Required

March 1, 1993

LVT Number: 6749

HPD sued landlord in 1988 and asked the court to appoint a 7-A administrator to manage the building. The court did so. There were rent strikes before and after the appointment. The building was sold in a foreclosure sale in 1990. HPD, the tenants' association, the new landlord, and prior landlord all sought the release of $81,000 in funds collected by the administrator. The trial court refused to release the funds to prior landlord. The court ruled that the funds could be released only after the administrator submitted a complete accounting. Former landlord appealed.

HPD sued landlord in 1988 and asked the court to appoint a 7-A administrator to manage the building. The court did so. There were rent strikes before and after the appointment. The building was sold in a foreclosure sale in 1990. HPD, the tenants' association, the new landlord, and prior landlord all sought the release of $81,000 in funds collected by the administrator. The trial court refused to release the funds to prior landlord. The court ruled that the funds could be released only after the administrator submitted a complete accounting. Former landlord appealed. The appeals court ruled that the funds would be released to former landlord if the accounting showed that some of the funds held were collected during the time when former landlord owned the building and landlord could support a claim for those funds.

[D.H.P.D. v. Caton BMT Associates: NYLJ, p. 30, col. 1 (2/4/93) (App. T. 2 Dept.; Aronin, JP, Joy, Scholnick, JJ)].

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