Late Fee Applied to Tenant's Rent Was Excessive

Landlord sued to evict unregulated tenant for nonpayment of rent. Although tenant otherwise paid rent, what landlord claimed due were late fees for a number of months and an increase in tenant's rent after tenant's last lease expired. Tenant moved out of the apartment while the case was pending. At trial, tenant testified that he deliberately paid his rent late at times in order to prod landlord to make needed repairs of conditions including sagging wood floors, a collapsed bathroom ceiling, mice, water damage, and mold.

The court ruled for tenant and dismissed the case. Tenant had a bona fide claim of breach of the warranty of habitability, which caused him to withhold rent. Applying a late fee to tenant's rent would unfairly penalize tenant since it would impermissibly modify the warranty of habitability. The 5 percent per month late fee also was excessive, since it amounted to 60 percent per year. Tenant's most recent lease also didn't entitle landlord to charge a higher "holdover rate" to tenant when he became a month-to-month tenant. 

156 East 37th Street LLC v. Eichner: 62 Misc.3d 1216(A), 2019 NY Slip Op 50146(U) (Civ. Ct. NY; 2/6/19; Stoller, J)