Landlord's Estate Claims Fraud by Managing Agent

The administrator of landlord's estate sued the real estate management company hired by the Public Administrator (PA) for a period ending in 2006, a former employee of that management company, and the DHCR. The administrator sought rescission of a lease for an apartment in the building between the management company and the employee, claiming fraud and harm to the estate. Landlord died in 1993, and the PA administered the estate between 1997 and 2006, before the new administrator was appointed. The administrator claimed that the management company placed the employee in the apartment with a rent-stabilized lease for an artificially low rent. At the same time, the management company claimed that the employee was the building super, but she was merely an agent. The administrator claimed that the lease was unauthorized and therefore void as a matter of law, with no trial needed.

The court ruled against the administrator. The employee-tenant claimed that this lawsuit was retaliatory after she filed a personal injury action against the estate. The administrator also had been aware of the employee's lease since 2006 yet failed to take legal action until 2009.  In light of this delay and the time relative to the tenant's personal injury action, a trial was needed to determine the facts.

Paris-Merchant v. Gonzalez: Index No. 117134/09, NYLJ No. 1202593899950 (Sup. Ct. NY; 4/1/13; Scarpulla, J)