Tenants Can Get Damages from Landlord Who Didn't Correct Violations

Facts: HPD sued landlord in 1991 to force correction of immediately hazardous violations. Landlord didn't comply. In the meantime the building was severely damaged by a fire, and tenants were relocated. The court ultimately found landlord to be in criminal and civil contempt of court. The court also ordered that while the case was pending, neither landlord nor the City of New York should demolish the building. The city tore down the building in violation of the court's order, and tenants sued the city for contempt of court. Tenants settled with the city and returned to court seeking money damages from landlord. Landlord asked the court to dismiss tenants' claims, arguing that tenants were now living in better, cheaper housing and that they had already gotten money from the city. Court: Landlord loses. Tenants can pursue their claims against landlord for the value of the destroyed leasehold interests in their old apartments even though they had made a financial settlement with the city. Tenants were injured by landlord's disobedience of the original court order. If tenants could prove that the fair market value of their old apartments was greater than the rent they would have paid for the remainder or their leases, then they were entitled to compensation from landlord. Tenants' rights to renew their rent-stabilized leases would also be assigned some value. And even though the city demolished the building, it was landlord's failure to correct violations that caused the fire in the first place. So landlord was responsible for some percentage of the damages to tenants. A hearing would be held to determine each tenant's damages and landlord's share.

Martinez v. Capella: NYLJ, p. 32, col. 1 (10/17/95) (Civ. Ct. Kings; Rivera, J)