HMGJ Partner Jesse Gribben recently won big for tenants at the Appellate Term, First Department. The tenant in the underlying housing court non-payment case, Trafalgar v. Malone, argued that the landlord could not collect rent because the building did not have a valid certificate of occupancy. Pending a final determination of the housing court case, the tenant deposited “use and occupancy,” (what rent is called after a lease ends) with the court and paid several months of use and occupancy directly to the landlord. The money paid and deposited was “without prejudice,” to the tenant’s defenses. The court held all of these monies must be returned to the tenant and the decision was upheld on appeal.
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Affirms Supreme Court holding that the rents for 78 apartments unlawfully deregulated while landlord was in receipt of J-51 tax benefits have to be calculated based on the default formula and frozen as of 2007. Under the default formula, the rents are recalculated because of landlord fraud and/or because there are no reliable rental history records. The recalculation is usually based on the lowest stabilized rent for a comparable apartment in the building. In most cases, the rents are to be lowered from well over $2,000 per month to well under $1,500 per month. The tenants who have occupied those apartments over the past 14 years are entitled to a refund of the amounts overpaid, with interest, which will result in tens of millions of dollars of compensation.
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HDFC cannot eliminate preferential rent as long as tenant is in occupancy based on clear language of the initial lease rider which provided, after rehabilitation of the building, that if tenant could not obtain Section 8, all rent increases would be based on the lower preferential rent, not the legal rent.
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Upholds DHCR finding of fraudulent scheme to deregulate based on lack of proof of claimed renovations, setting of rent based upon default formula and awarding of overcharge and treble damages.
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Chini v. Chini, 189 A.D.3d 986 (2d Dept. 2020) (finding issues of fact requiring a trial as to claim by son of deceased owner, who had exclusive possession of an apartment and paid rent, that he was a rent stabilized tenant)
Garendean Realty Owner v. Lang, 175 A.D.3d 653 (2d Dept. 2019) (upholding dismissal of fraud claim against tenant where no sufficient allegations were made)
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(421-g apartments not subject to deregulation) (Court of Appeals June 2019)
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court upholds trial court decision that the landlord fraudulently deregulated the apartment, freezes rent, grants trebles damages, uses default formula to calculate rent and awards legal fees
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HDFC unreasonably rejected remaining family member application of daughter of deceased tenant on the basis of not being financially responsible. Daughter was able to pay the maintenance and lack of tax returns and period of withholding maintenance, under the circumstances, did not make her financially irresponsible.
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421-g apartments not subject to deregulation
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Sup Ct, NY Co (illegal use of apt does not preclude it being rent stabilized, landlord Article 78 dismissed)
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HMGD&J wins summary judgment relieving a tenant of any obligation to pay rent, over a five year period, based on her building’s decades old Certificate of Occupancy violation. This case solidifies precedent, also won by HMGD&J and firmly establishes that landlords cannot collect rent from a tenant if its building has a C of O violation, no matter how old the violation or how much the tenant owes.
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Petitioner commenced these holdover proceedings to recover the subject apartments located at 71-38 71st Street, Glendale. Prior to commencement petitioner served Thirty Day Notices terminating respondents’ tenancies effective September 30,2017.
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Owner’s use proceeding dismissed where owner failed to offer tenant 62-years old or older an equivalent or superior rent-stabilized apartment. Agreement to charge stabilized rents not sufficient.
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(SC, NY Co) (court finds overcharges and sets rent based on “default” formula where landlord failed to offer sufficient evidence of renovations and treated apartments as deregulated while in receipt of J51 benefits)
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tenant granted summary judgment, apartment stabilized on basis of J51, court finds fraud and sets rent based on default formula with rent freeze, treble damages and attorneys fees
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