May 23, 2013
3950 BLACKSTONE ASSOCIATES, LLC, Petitioner,
David GOLDSTEIN and Shanna Goldstein, Respondents. No. L & T1958/2013.
This decision has been referenced in a table in the New York Supplement.
Novick & Kaner, P.C., New Rochelle, Attorneys for Petitioner.
Goodfarb & Sandercock, LLP, New York City, Attorneys for Respondents.
JOEL R. KULLAS, J.
Petitioner commenced this holdover proceeding alleging respondent's unregulated lease had expired. (The lease in question runs from January 1, 2011 through December 31, 2012. See respondents' Exhibit " D." ) Respondent interposed an answer with counterclaims which included an affirmative defense stating that the premises is subject to rent stabilization and therefore, the petition should be dismissed. Petitioner previously moved to amend the petition to reflect that the subject unit was a " high rent accommodation" excluded from rent stabilization pursuant to RSL § 26-504.2(b). Respondent previously moved for an order dismissing this proceeding as against David Goldstein based upon allegedly improper service as well as an order staying this proceeding pending disposition by the Division of Housing and Community Renewal of the State of New York (" DHCR" ) of respondents' overcharge complaint currently filed with the agency (DHCR Docket No. ZC610013R). Pursuant to an order dated May 1, 2013 (Lehner, J.), this court granted petitioner's motion to amend, denied respondent Goldstein's motion to dismiss and granted respondents' motion for a stay pending DHCR's determination concerning their complaint. Pursuant to that order, the court adjourned the proceeding for oral argument regarding the amount of monthly use and occupancy to be paid by respondent and the period of time for which it should be paid.
The court may award use and occupancy on an interim basis without a hearing ( Andejo Corp v. South Street Seaport Limited Partnership, 35 A.D.3d 174 [1st Dept 2006] ), subject to adjustment after trial. ( Morris Heights Health Center v. DellaPietra, 38 A.D.3d 261 [1st Dept 2007].) A landlord may recover " reasonable" use and occupancy and a " parol lease or other agreement may be used as evidence of the amount" that is reasonable. (Real Property Law § 220.) The court can consider other facts besides the lease. The obligation to pay use and occupancy does not arise from a contract between the parties, but " is predicated upon the theory of quantum meruit, and is imposed by law for the purpose of bringing about justice without reference to the intention of the parties.' " ( Eighteen Associates v. Nanjim Leasing Corp, 257 A.D.2d 559 [2nd Dept 1999] quoting Rand Prods Co v. Mintz, 72 Misc.2d 621, quoting 1 Williston, Contracts § 3A, at 13 [3d ed].)
Petitioner asks this court to simply rely on the expired lease between the parties and direct respondent to pay the outstanding use and occupancy at that rate: $2,200.00 per month. (Respondents' Exhibit " D." ) Petitioner alleges it made sufficient improvements to the apartment to entitle the landlord to increase the rent (9 NYCRR § 2522.4) beyond the threshold of rent regulation and create a " high rent accommodation." (RSL § 26-504.2.) Petitioner did not submit any evidence in support of the improvements allegedly conducted in the apartment to entitle it to charge such an increase in the monthly rent. Furthermore, petitioner did not submit a rent ledger detailing the amount of use and occupancy respondents allegedly owe. In response, respondent's overcharge complaint contesting the validity of this increase has been pending with DHCR for nearly two years. This overcharge complaint includes respondents' detailed calculations regarding their allegations concerning the actual retail cost of the alleged improvements to the apartment. This court can only provide justice and determine the reasonable amount of use and occupancy by taking into account this overcharge complaint. ( Eighteen Associates v. Nanjim Leasing Corp, 257 A.D.2d 559 [2nd Dept 1999] supra. ) A tenant is not required to pay an amount in controversy that may be offset by overcharges. ( Bozzi v. Goldblatt, 160 A.D.2d 647 [1st Dept 1990]; see also Cohen v. Felix, NYLJ, November 7, 1990 at 23, col 3 [Civ Ct, Bx County 1990] [where landlord only produced a lease listing monthly rent of $850.00, without a registration for such amount, and tenant had a pending overcharge complaint with DHCR, the court ordered pendente lite use and occupancy payments in the amount of the last registered monthly rent of $303.24.) As aptly stated by the court in 100 Mosholu Pkwy Assocs v. Hughes, NYLJ, March 13, 1996, at 26, col 6 [Civ Ct, Bx County 1996] ), " [i]f the respondent is evicted because of her inability to pay a possessory judgment rendered in this summary nonpayment proceeding, it will be of little consolation to her if she discovers, after she loses her home, that the rent was illegal."
A review of the certified DHCR records for the subject unit (produced in response to a subpoena signed by the Rashford, J.) shows the last registered rent as $884.28 per month, in 2008. According to the DHCR records, no registration was filed for the years 2009 through 2012. Petitioner would have been entitled to take a 20% vacancy increase on that amount when entering into a two-year lease with respondents (9 NYCRR § 2522.8(a)(1)). Thus, even assuming respondents' unit is still subject to rent stabilization, petitioner would have been entitled to increase the monthly rent to $1,061.14 ($884.28 x .20 = 176.86; 884.28 176.86 = $1061.14). It also appears the petitioner may be entitled to take a long-term prior tenant vacancy increase since the DHCR records appear to contain the names of the same tenants from 1984 (the first year listed) through 2008. (9 NYCRR § 2522.8(a)). The amount of this increase is based upon either the number of years since the imposition of the last permanent vacancy allowance or, if the rent was not increased by a permanent vacancy allowance since the housing accommodation became subject to the Rent Stabilization Law and Code, the number of years that such housing accommodation has been subject to those statutes. (9 NYCRR § 2522.8(a)). However, petitioner has failed to address this issue in his affidavits; there is merely a notation on the contested lease of " 38 years." (See Respondents' Exhibit " D." ). Given the dispute between the parties regarding the legality of the lease, this is insufficient evidence to substantiate the validity of a long-term prior tenant vacancy increase. Petitioner may renew its application for same at trial.
Based on the foregoing, since this case has been pending since January 2013, respondents shall tender $5,305.70 ($1,061.14 x 5 [5 months representing January 2013 through May 2013] = $5,305.70) to petitioner within ten (10) days of petitioner's service and filing a copy of this order with notice of entry upon respondents, and in the same time frame, deposit $5,694.30 into their attorneys' escrow account (representing the difference between the undisputed rent stabilized rent petitioner could charge ($1,061.14) and the disputed monthly rent listed in the expired lease ($2,200.00) [$2,200.00 - $1,061.14 = $1,138.86 x 5 = $5,694.30]. Respondents shall pay to petitioner $1,061.14 for June 2013 by June 21, 2013, and $1,061.14 for each subsequent month, by the tenth of each month, commencing July 2013, pendente lite, and in the same time frame, deposit $1,138 .86 into their attorneys' escrow account. Respondents' counsel shall notify petitioner's counsel in writing (via mail, hand delivery or email) by the twenty-fifth of each month, commencing June 2013, that each escrow payment has been timely made. Petitioner may restore by motion upon default for appropriate relief.
This constitutes the decision and order of this court. Petitioner's attorneys shall serve a copy of this order upon respondent's attorneys by first class mail and file a copy of the order with notice of entry and affidavit of service with the Clerk of the Court within ten days of the date of this order.