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.
A small start-up company had just entered its lease for the office space in the Flatiron District. The Lease, especially the rent, was an essential part of the start-up company's business plan.
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.
In the frenzied rush to rent an apartment in NYC, tenants often rely solely on the representations of brokers, managing agents, and landlords about the type of building they are about to rent. Many of today's tenants assume they are "deregulated" tenants, or tenants not subject to rent control or rent stabilization, and landlords do nothing to disabuse a tenant of the assumption, perhaps relying on a murky history that the tenant's apartment was deregulated because it was used for professional reasons or rented by an owner in the past. Don't assume your apartment is deregulated without checking because there are significant benefits to being a rent regulated tenant, including reasonable rent increases and generally, life-time tenure in the apartment.
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).