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The Rent Stabilization Code and New York City Housing Court are anti-green.

In Uncategorized on June 2, 2011 by bleakhouses

The first blast of summer heat brought to mind this topic I have been thinking about  for some time.  I think that Mike Bloomberg, the “green” initiative Mayor, oversees a system that is anti-green and guilty of incentivizing the waste of massive amounts of electricity.

Is this controversial?  I don’t think so.  Tell me what you think.

In many rent stabilized apartments in New York tenant’s are entitled to install air-conditioners and the landlord is allowed to collect an additional fee per unit from the tenant.

The fee is set by the Division of Housing and Community Renewal on an annual basis and is disclosed to the public in a policy statement:

For rent controlled and rent stabilized apartments, where the rent includes the use of electricity, an owner may charge a tenant a surcharge for the use of electricity for each air conditioner that has been installed.

On October 1st of each year after the air conditioner has been installed the surcharge will be adjusted upward or downward for rent stabilized and rent controlled apartments with electricity included in the rent. Each annual adjustment of this electrical surcharge will be based on the increase or decrease in electrical cost stated in the Price Index of Operating Costs for Rent Stabilized Apartment Houses in New York City. The Price Index is prepared by the New York City Rent Guidelines Board, or an independent company chosen by the Board. This annual adjustment applies to air conditioners installed after October 1, 1985. If an owner collected a rent increase for the electricity consumed by an air conditioner installed in a rent stabilized apartment before October 1, 1985, that rent increase remains in effect and is not affected by this annual adjustment, because that rent increase is already part of the rent and subject to guidelines increases applicable to rent stabilized leases.

This passes an obligation to the owner to audit the building annually at the start of summer to ascertain which tenants to bill.  Recently, this issue has become frustrating as well because of the decreasing cost of portable non-window air conditioning units….which for the first time are considered in the policy statement and EXCLUDED from the charge!

The landlord may then bill the tenant, the monthly charge established by the DHCR, for the air conditioner.

It is at this point when things go anti-green.

If a tenant fails to pay for the air conditioning charge the Courts have determined that the landlord is not able to bring a non-payment proceeding to evict the tenant because the air conditioning charge is not rent.  The Court’s apply the rationale that the air conditioner charge is an additional charge similar to a late-fee or a legal-fee and thus cannot support an eviction proceeding.

This is despite the fact that the DHCR itself has determined that the charge is a “permissible charge” and not a fee.

The most recent DHCR policy statement can be viewed here:

http://www.dhcr.state.ny.us/Rent/OperationalBulletins/orao844_25.pdf

In practice I have observed this to result in great abuse by many tenants.  The Housing Court dismisses the claim for air conditioning permissible charges, or that part of an otherwise “proper” case, that seek air conditioning charges.  This puts the landlord in the unenviable economic position of having to commence a lawsuit in the more expensive and time consuming Civil Court, or small claims court (recently subject to massive budget cuts and already overburdened), for about $300.00.

Practicality usually dictates that the landlord wait a few years until it makes economic sense to prosecute the claim.

However, once this happens the DHCR has also determined (see the above link) that the landlord waives its right to collect the charge FOREVER!

Even those landlords that prosecute to judgment, in any Court, their claim for air conditioning charges find the collection of such judgments very frustrating.  This is made even more frustrating when the following year the air conditioners show back up in the windows of the judgment debtor and the bills go ignored again.

What results from all of this is the unrestrained consumption of electricity.  With nothing to disincentive the tenants from running the air conditioners all day and night they do just that.  Park your car this August in front of a building with rent stabilized apartments and just listen to the air conditioners run all day and night.  Can you imagine your electric bill if you did that!

Its hard to ignore this issue.   You can’t scapegoat the landlords on this one.  The excessive consumption of electricity hurts us all and The Housing Court, Rent Stabilization Code and DHCR promote it.  Even if you don’t worry about climate change, you have to agree that there is an economic to everyone.

Our “green” Mayor has done nothing about this our “green” City makes this happen every day.

Why?  I have my theories.  Drop me a line if you want to discuss this further.

 

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Does the renewal of a rent-stabilized garage lease/ancillary service vitiate a termination notice?

In Uncategorized on June 1, 2011 by bleakhouses

I think yes, and am currently involved in litigation on the topic.

The tenancy and the garage tenancy originated at the same time.  They have been renewed regularly at the same time through 2010 when the Landlord elected not to renew the tenant’s rent-stabilized lease for alleged “non-primary” residence.

At the same time the Landlord sent the notice of election not to renew (Golub) and termination it sent to the tenant a separate  rent-stabilized renewal lease for the garage spot.  The Landlord listed, on the garage renewal, the apartment address that it has said the tenant is not occupying as its primary residence.

Ancillary services are defined by the Rent Stabilization Code as:

(3) Ancillary services. That space and those required services not contained within the individual housing accommodation which the owner was providing on the applicable base dates set forth below, and any additional space and services provided or required to be provided thereafter by applicable law. These may include, but are not limited to, garage facilities, laundry facilities, recreational facilities, and security. Such ancillary services are subject to the following provisions:
(ii) Where an ancillary service is provided to a tenant pursuant to a lease or rental agreement separate and apart from the lease or rental agreement for the housing accommodation occupied by the tenant, the tenant shall not be required to renew such lease, or rental agreement, for the ancillary service upon the expiration of such lease or rental agreement.
We have argued as follows:
-the lease for the ancillary service is separate and apart from the lease for the housing accommodation.
-the expiration of the ancillary service lease  allows for the tenant’s option to renew, on the same date as the lease for the housing accommodation.
-whereas the code provides specifically for the tenant’s election to renew the ancillary lease upon the expiration thereof (matching the election right for the lease for the housing accommodation), it does not provide for a concomitant landlord’s election.
-thus, the code can only be read as linking the ancillary service directly to housing accommodation.
-therefore, when, the landlord, on one hand, serves the tenant with a renewal lease for the ancillary service, and subsequent thereto, and on the other hand, serves the tenant with a notice of non-renewal for the housing accommodation it is sending the axiomatic “mixed signal” vis a vis the renewal of the tenancy.
-the law is clear in regard to such “mixed signals” and provides that the lay person, tenant, may not be charged with the obligation of interpreting the meanings of the contradictory actions of the landlord and that the termination shall be deemed vitiated and ineffective.
We are awaiting a decision on this and will report back when we get one.

 

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The death of the “lockbox” claim in a holdover.

In Uncategorized on June 1, 2011 by bleakhouses

It is truly amazing how the practice of law really is “practice” meaning that you learn and improve on a regular basis.

Today, I was reviewing the progress of a new (very interesting) case with a client, and was floored by a comment of my client’s that lead to the thought that lead to this post…I’ve been practicing almost 20 years and never saw things as I did today.

The client is a tenant in a non-primary residence, rent-stabilized holdover (for those who don’t know, a very “hot” case).  There are a litany of great defenses, one of which is groundbreaking and likely to be the deciding factor in the case (I will post about later) so this issue is likely never to be ruled upon.

None the less, my client is an unnamed “Doe” who claims tenancy and has been paying rent on personal checks in her name, at the apartment address, since the inception of the 18 year tenancy.

When I pointed this out, in settlement conference, to the Landlord’s attorney remarked (axiomatically) “all those payments go to a lockbox,” thus positioning his client for a defense to our “waiver/tenancy by estoppel” argument.

I explained this to my client to which she replied:

“Thanks Tracy. I’ve mailed the rent since December to this “lock box” and they haven’t cashed it. I guess the “lock box” is just a little brighter than they claim;) ”

I read the above remark and though “wow!  I’ve never seen it that way.”

The point is, for X years prior to the commencement of the proceeding the Landlord claims ignorance by lockbox, but the day they elect to terminate the tenancy they become smart enough to vet this tenant’s check from the lockbox and refuse to cash it, or to return it.

Therefore, the “lockbox” claim, always alleged to be a “convenience” for the landlord and the tenant alike, is really a legal artifice created by the lawyer for the purposes of excusing conduct detrimental to the client.

I can’t wait to raise this claim in a case and see what happens.  I don’t think it will happen in this case though.

Feel free to contact me if you wish to discuss the matter further.  I can be contacted on my linkedin page here:   http://www.linkedin.com/home?trk=hb_tab_home_top

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In Uncategorized on May 24, 2011 by bleakhouses

Greetings to those who find themselves here. My goal with this blog is threefold…education, entertainment and, of course, shameless self promotion. I hope to succeed in all three.

I will in the future be writing on both specific cases I am dealing with and general topics in my area of practice.

Hopefully I wont have to spend much time on why and how I found Dickens to be my muse for this endeavor