November Insights
By Eileen O’Toole, Esq.
Several recent DHCR and court decisions highlight points of interest under rent stabilization and landlord-tenant law.
The DHCR denied an MCI increase for gas piping service costs in connection with a new boiler where there was no change in the device’s No. 2 fuel oil grade. The fuel conversion wasn’t done to comply with NYC Local Law 43 to discontinue use of No. 4 or No. 6 fuel oil [Matter of Alini Enterprises, Inc., LVT #32307]. And in Matter of Elbridge Realty LLC [LVT #32308], the DHCR disallowed any MCI increase for a wheelchair/accessibility ramp because it serviced only one side of a building with both an east and west wing, and therefore wasn’t a “building-wide” improvement.
Continuing a recent trend, the DHCR ruled that a landlord was responsible for a $70,000 rent overcharge by a rent-stabilized tenant to a subtenant due to illusory prime tenancy. Although there was no proof of any collusion between the landlord and the tenant, the DHCR found that the landlord had “constructive knowledge” of the overcharge and was therefore responsible [Matter of Stahl York Avenue Co. LLC, LVT #32318].
In Matter of Miller [LVT #32320], an overcharge case based on improper deregulation, the landlord claimed that the tenant owed substantial rent arrears, and there was a pending nonpayment proceeding in housing court. The DHCR found that there was an overcharge but punted determination of the amount to the housing court.
Claims of overcharge and improper deregulation continue to arise in J-51 buildings. In Silkes v. B-U Realty Corp. [LVT #32349], a tenant sued a landlord in court for fraudulent deregulation of an apartment subject to rent stabilization while the building received J-51 tax benefits. The court awarded the tenant close to $74,000 in rent overcharges.
Landlords continue to challenge ERAP stays in Housing Court. In two recent cases, the courts simply refused to vacate the automatic statutory stays, despite landlord objections [Williams v. Wilson, LVT #32331, and Rosetree Props. LLC v. Headlam, LVT #32348].
Several procedural issues of note were discussed in recent cases involving landlord-tenant issues. In 170 Spring St. LLC v. Doe[LVT #32332], an appeals court ruled that a landlord could seek back rent from a rent-controlled successor tenant after the tenant died because, unlike rent-stabilized tenancies that could be continued by the tenant’s estate until current lease expiration, the granddaughter here became the statutory tenant immediately upon the death of the original rent-controlled tenant.
A housing court denied a tenant’s motion to dismiss a holdover proceeding after the landlord sent the deregulated tenant a lease nonrenewal notice. In Frischer v. Goldner [LVT #32338], the court found that personal service of the lease nonrenewal notice was not required under RPAPL §226-c, and that the landlord had correctly served the nonrenewal notice via certified mail, as required by the lease between the parties.
A discussion of jury waiver clauses is found in the federal court case of Mazzocchi v. Windsor Owners Corp [LVT #32345], where a co-op shareholder tenant sued the landlord co-op board. Finding that the jury waiver clause in the tenant’s proprietary lease was enforceable, the court mentioned various factors, noting that the Seventh Amendment of the U.S. Constitution guarantees the right to a jury trial but that parties could waive that right in New York by prior written agreement provided the case didn’t involve personal injury or damages.