Landlord Didn't Disclose It Had Received LRAP Funds to Pay Tenant's Rent

Landlord sued to evict tenant after tenant's lease expired. Attorneys for both sides signed a settlement stipulation in court. In that agreement, tenant agreed to move out at the end of September 2022. Tenant also agreed to apply to ERAP for rental assistance, and landlord agreed to pay tenant $3,000 in consideration of her timely vacatur. Tenant later asked the court to vacate the stipulation and dismiss the case. Shortly after the parties signed the stipulation, tenant's attorney learned that the ERAP application was already approved and monies had been tendered by OTDA to the landlord. The ERAP program paid landlord a total of $27,000 for a 15-month period. ERAP paid landlord $1,800 for each month. But tenant said her rent was only $650 or $700 per month. Tenant claimed fraud.

The court ruled for tenant. When ERAP or LRAP funds are accepted by a landlord, the landlord agrees not to evict a tenant for 12 months after the ERAP rental assistance is received. Here, the ERAP monies were delivered to landlord on Feb. 16, 2022, and cashed by landlord shortly thereafter. Landlord knew this, but tenant didn't, at the time the settlement stipulation was signed in court on Aug. 12, 2022. The court vacated the settlement stipulation and dismissed the case without prejudice.

Palacio v. Moursy: Index No. L&T 50122-21, 2022 NY Slip Op 34124(U)(Civ. Ct. Kings; 12/2/22; Slade, J)