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.
Translation: if the landlord sues you and you have to hire an attorney to defend yourself and you win at trial or before, when the landlord drops the case, you can make the landlord pay your legal fees for improperly taking you to court in the first place. This happens by the following means: you submit your lease which contains the provision for legal fees and your bills and have a court hearing on how much in legal fees should be awarded. (Caution! Not all leases contain such a provision [e.g. Stuyvesant Town].)
On its face, tenants and their advocates rejoice in this law. We advocates know that the law gives leverage to tenants because if they win the landlord will have to go out of pocket to reimburse the tenant for fees over and above paying for their own landlord’s attorneys’ fees. Because many landlords with resources generally do not feel the pain of paying their lawyers, even if they lose, as much as tenants do, this gives a winning tenant legal grounds to be made whole. In reality, tenants do not have lawyers on retainer and most have not budgeted for legal fees in their lives; they want to recoup this money for legal fees. Giving the tenant his or her legal fees does level the playing field.
The only problem is, the law is not popular in practice among housing court judges. Many judges hate holding up the resolution of cases because the parties are fighting over who should pay legal fees. Often described as “the tail wagging the dog” in a housing court case, the judges disdain this fight over money when the main issues have been resolved. In fairness to the judges, there are more important aspects of many housing court cases than legal fees such as eviction prevention, repairs, and the payment of rent. Frankly, the original import of leveling the playing field has fallen several rungs on the ladder of importance if it was ever there.
In view of most judges’ disdain for legal fees and willingness to back out the concept of leveling the playing field in a housing court case, what are a tenant and tenant lawyer to do about legal fees?
Try not to hold up the settlement of a case to get them, and certainly, don’t hold out until you get 100% because the judge will not appreciate it. Judges consider 100% of your fees but most judges do not award you 100% of your legal fees (although there is no reason why they should not). The concepts of “splitting the baby,” and throwing the losing side “a bone,” although unspoken, are alive and well in housing court. The bottom line is it’s better to get reimbursement from the landlord even if it does not make you whole and move on. Some tenants rationalize not getting the fees by considering their low rents if they are rent regulated and actually amortize their legal fees as part of their low rent over the years.
Do not be disheartened if you walk away with less than 100% of the legal fees or if you walk away without any reimbursement at all. Most landlords leave tenants alone after the wins. And being left alone, as they say, is priceless.