Whether your landlord is suing you for eviction, or you are suing your landlord for repairs, being in court takes its toll. Resources get depleted. Tenants have to take off from work, pay an attorney to represent them, and live with the stress of an unknown outcome.
In the case of 354 East 66th Street v. Curry, the son of the deceased rent stabilized tenant proved to the Housing Court that he had the right to succeed to his mother's tenancy. The Housing Court awarded Mr. Curry his attorneys' fees, and the landlord appealed. On appeal, the Appellate Term, First Department, ruled that Mr. Curry was entitled to his attorneys' fees based upon the terms of his mother's original lease dating from 1972. That lease contained a clause stating that the landlord could recover attorneys' fees in the event of a default by the tenant. Under the law (Real Property Law 234), where a lease allows a landlord to recover attorneys' fees, the tenant has an equal right to recover attorneys' fees if the tenant is the prevailing party in a court dispute. The lease also stated that its terms were binding upon successors-in-interest. Therefore, the Appellate Term stated, Mr. Curry was entitled to recover his attorneys' fees. This case is especially significant because there had been some previous court decisions interpreting provisions of old leases, such as the one in this case, in a manner unfavorable to tenants. This case appears to have settled the law, such that old lease provisions like the one in this case will allow for tenants, and their successors, to recover attorneys' fees when they prevail in court.
Designed to "level the playing field," Real Property Law section 234 states that whenever a lease provides that a landlord may recover attorneys' fees and or expenses due to a tenant's failure to perform any agreement contained in a lease, there is implied a covenant by the landlord to pay to the tenant the reasonable attorney's fees and/or expenses incurred by the tenant as the result of the failure of the landlord to perform any agreement under the lease or in the successful defense of any action or summary proceeding commence by the landlord.
The general rule in American courts (the so-called "American rule") is that each party to a lawsuit bears his/her own legal expenses. Landlord-tenant litigation is sometimes an exception to that rule. Tenants who would like to know whether they may have to pay the landlord's legal fees, or if the landlord may have to pay the tenant's legal fees, will need to review the lease. In the case of a rent stabilized tenant, the lease the tenant must examine will be the original lease; this is because under rent stabilization, a lease is renewed on the same terms and conditions as the original lease. In the case of a market tenant, the tenant must examine the current lease, or if there is no current lease, the most recent lease. If there has never been any lease, then there is no right to attorneys' fees for either the landlord or the tenant (but see the exceptions discussed below).