Housing Program Residents Claim Harassment, Unlawful Evictions, Other Abuses

Former and current residents of "three-quarter houses" in Brooklyn and Queens sued housing operators, claiming deceptive business practices, unconscionable contracts, harassment and unlawful eviction, violation of the Rent Stabilization Code, and unjust enrichment. The court ruled for operators and dismissed the claims without a trial.

Residents appealed. The appeals court ruled that residents were licensees and therefore not subject to rent stabilization. But based on statements contained in resident affidavits, the lower court improperly dismissed the other claims. The operators had the burden to show that they didn't engage in acts or practices that were deceptive or misleading. And there were questions of fact requiring a trial on whether the housing contracts were unconscionable, whether there was harassment and unlawful eviction, and whether there was unjust enrichment. The case was sent back to the lower court for trial. The residents were people with disabilities and histories of substance abuse, as well as some living in shelters or re-entering the community after serving time in prison. The operators recruited the residents to join their housing programs, which claimed to offer supportive services. The residents claimed that they were required to commit their personal incomes or housing allowances to the operators in order to move into the three-quarter houses. Residents claimed that they lived in abject and overcrowded conditions at the houses with no support services. 

David v. #1 Marketing Service, Inc.: 113 A.D.3d 810, 2014 NY Slip Op 00477 (App. Div. 2 Dept.; 1/29/14; Eng, PJ, Dillon, Sgroi, Miller, JJ)