Landlord's Nephew Can Collect Use and Occupancy Fees

Tenants sued landlord for breach of contract and for breach of warranty of habitability. Their lease gave them a right of first refusal to buy the building. But landlord transferred the building to his nephew. Tenants brought a second court action against landlord and his nephew to set aside the building transfer, claiming fraud. The nephew then sued to evict tenants. The cases were consolidated, and the court granted the nephew’s request to set aside a portion of the jury’s decision after trial that failed to award him use and occupancy fees from tenants for the period following expiration of their lease. The court ruled for the nephew. Tenants appealed and lost. Landlord’s transfer of the building to his nephew was fraudulent and that transfer was voidable. However, as the record owner and landlord of the building, the nephew was entitled to receive use and occupancy fees from tenants until a judgment was entered by the court setting aside the transfer.

Gallagher v. Roman: 2009 WL 203515 (1/27/09) (App. Div. 2 Dept.; Prudenti, PJ, Spolzino, McCarthy, Leventhal, JJ)