THE VILLAGE VOICE
Thursday, November 07, 2004
Your Home is Your Landlord’s Castle, by J.A. Lobbia
For nearly 10 years, Carl Goodman endured cascading leaks, cold winters, and generally shabby conditions in his tiny one-bedroom West Village apartment. When his longtime landlord sold the building in May, Goodman was looking forward to a new, more responsible owner. So he was nothing less than shocked to learn that he was facing eviction. More stunning is the fact that his new landlord may prevail. “I never, ever thought I could lose my apartment this way,” says Goodman, a 44-year-old marketing consultant. “I thought rent stabilization protected you unless you did something wrong. This has been like a cold shower.”
“If tenants say they’re scared in an owner’s use case, well, they should be. It’s the only time you can legitimately get kicked out without doing something wrong.” The dousing comes in the form of an obscure but increasingly invoked part of the state rent law that allows landlords who claim that they want to take over apartments for themselves or their families to kick out rent-stabilized tenants. Unless tenants are rent-controlled, or they or their spouses are elderly or disabled, chances are they will lose their apartments. Even rent-controlled tenants can be evicted, but the process is much more difficult for the landlord. “It was a shock,” says Goodman, “an eye-opening shock.”
The provision, known as the owner’s use law, is based on the theory that a landlord’s right to use his property for his own needs surpasses the rights of a tenant, even one who is protected by rent laws. While the owner’s use law is not new-it has not even been modified since 1984-what is new is how frequently it is being used, usually with success.
“The number of these cases has exploded in the last three years,” says Sam Himmelstein, an attorney who has represented tenants facing owner’s use evictions. “Mostly it happens in brownstones and small buildings in the Village, the East Village, the Upper East Side. But we see it in Brooklyn, too. And if tenants say they’re scared in an owner’s use case, well, they should be. It’s the only time you can legitimately get kicked out without doing something wrong.”
While there are limits on how landlords can invoke the owner’s use law-it applies only in buildings that are owned by individuals rather than corporations, for instance, and it is limited to landlords who will use the apartment as their primary residence in New York City-the provision is, by and large, hugely generous to owners and treacherous for tenants. Himmelstein, for example, says his overall success rate in representing tenants in all sorts of housing matters is 80 percent. “If you took out owner’s use cases,” he says, “it would be 90 percent.”
The law is also rife with potential for abuse by landlords who claim to want an apartment for personal use, but whose real goal is to replace regulated tenants with high-paying newcomers. Written largely at the behest of owners, the law does not require landlords to show that they need the space; they only need to convince a housing court judge that they intend to use it as a family apartment.
The law makes only a wan effort to discourage fraud, stipulating that owners who do abuse it “may” be forbidden from getting rent increases in the building for three years, and that tenants who were evicted “may” regain their old apartments at their old rents. But those sanctions are in practical terms meaningless, since by the time tenants can prove a landlord’s abuse, they’ve been kicked out. Even then, the law gives landlords an opportunity to argue that they had to re-rent an apartment because a change in circumstances made it no longer necessary for them or their families to occupy it.
“The penalties are ridiculous and they never get enforced,” says Michael McKee, a housing advocate at the New York State Tenants & Neighbors Coalition. “And there’s no limit to the number of apartments an owner can take. I know of buildings that have been emptied of six or eight units. It’s a gross inequity, and we’ll be seeing much more of it as landlords get more aggressive.”
Tenants who do stave off owner’s use evictions usually win because they find evidence that the landlord’s claims are bogus. But even that is a protracted and expensive prospect. “What it means is that you have between three and four months from the time you get a notice to conduct an investigation of whether the landlord is indeed acting in good faith,” says tenant attorney Seth Miller. Himmelstein recommends that his clients hire detectives to find out where the landlord really lives, if family members truly need an apartment, and if they are indeed related. He also checks court records, searching for evidence he can use to call a bluff.
“I’ve turned up cases where a landlord claims he wants different apartments for the same family member, for instance,” says Himmelstein. “I’ve found an owner in Park Slope who brought a case against a tenant, and never moved into the apartment, then re-rented it. Then they brought an owner’s use case against another tenant. As soon as I let them know I knew what had happened in the first case, they dropped the second one.”
In a Manhattan case, Himmelstein says, he suspected that a landlord’s claim that he needed an apartment for his son was a ruse. With a judge’s permission, Himmelstein asked the landlord to produce dozens of records, including deeds, stock certificates from co-ops, school records, and birth certificates. In response, the landlord not only dropped the case but signed an agreement to never bring an owner’s use case against the tenant, Liz Isaacs, again.
The victory was not lost on Isaacs, who, even though she works at a housing agency, says she “had never heard of an owner’s use case before. When they sent me the letter about it and quoted the law, I was just going to give up. But I got a lawyer, and they backed off. If you just do the math for brokers’ fees, you know you never want to lose an apartment in New York City.”
Pity Abe Haruvi. On April 2, 1997, the then 42-year-old landlord told a heartbreaking tale in Manhattan’s Housing Court. According to court papers Haruvi wrote, he and his wife had separated years before. In 1994, his wife had become too ill to care for their son, Jeremy, leaving the child in Haruvi’s care. In July 1995, she died. Haruvi told the court that the railroad apartment where he lived in a building he owns at 22 West 75th Street “is not conducive any longer to raise a young child of twelve who is about to become a teenager.” He added that “being single again poses some uncomfortable situations in an apartment with such a configuration especially with a young child in occupancy.” Plus, he wanted to hire live-in help. Haruvi said he needed to evict long-term tenant Barbara Mack and take over her apartment.
A sad story, and possibly true. In fact, it seems Haruvi thought it was so moving, he told it twice-at the same time, to two different judges, neither of whom knew the other was being similarly regaled. Less than two months before he sued Mack, Haruvi had made the exact same claims in his attempt to empty an apartment in another building he owns. That time, he was trying to boot Catherine Pellow, who, with her young daughter, had lived in a four-bedroom apartment in Haruvi’s building at 114 East 71st Street for eight years. The only difference between the Mack and Pellow cases was that Haruvi did not live in the Pellow building; he had bought the 71st Street apartment building in 1996 while living in the West 75th Street property, which his family had owned since before 1983.
The owner’s use law does allow landlords to take more than one apartment, provided that the apartments will be their primary city residences. But the fact that it was legally impossible for Haruvi to simultaneously take apartments in two separate buildings gives the lie to the verification Haruvi signed in both the Pellow and Mack cases, swearing that he was telling the truth each time. What finally happened with Pellow’s unit seems to prove that Haruvi had no intention of moving himself and his son there.
Under a June 1998 court-supervised stipulation, Pellow agreed to move out of her flat within a year. In return, she was paid $15,000 and lived rent-free from the date of the agreement until she moved to Brooklyn in June 1999. But Haruvi never moved into the apartment himself. Instead, this May, he re-rented the flat to tenants who are paying market rent. The new tenants would not say what their rent is, but other tenants in the building say newcomers are paying at least $5000 a month. Pellow, who was rent-stabilized, paid about $900. When told that her apartment had been re-rented, she guessed the new tenants were paying $8000.
That is exactly what the owner’s use law is supposed to forbid. Landlords who use the owner’s law are required to live in the apartment themselves, or have the family member for whom the apartment was taken live there, for at least three years after the previous tenant moved out. In Pellow’s case, that means Haruvi should not have re-rented until at least June 2002. Instead, the landlord waited less than one year to re-rent, presumably at an astronomical markup. (Haruvi had dropped the case against Mack because the building was owned by a Haruvi corporation rather than by Haruvi personally.)
Haruvi declined to answer Voice questions, calling his reliance on the owner’s use law “a very sensitive subject; I prefer not to discuss it.” Haruvi, whose legal voting address is in the West 75th Street building and who has five addresses and six phone numbers listed in the White Pages, referred questions to his attorney, Anthony LeCrichia. LeCrichia did not return repeated phone calls.
Pellow, who now lives in Los Angeles, did not know that Haruvi never moved into her old place. She says she settled largely because Housing Court Judge Oymin Chin told her that she was convinced Haruvi had a good case, and warned Pellow that if she lost, she could be liable for Haruvi’s legal fees.
“My whole life is totally changed now,” says Pellow. “I couldn’t live in New York anymore,” having lost her affordable apartment. “If I could get my old apartment back in New York at the rent I was paying, I’d do it in a minute.”
Technically, Pellow might be able to do just that, since Haruvi appears to have violated the three-year requirement; in addition, it’s possible that he could be prevented for three years from getting rent increases throughout the building. But both remedies require housing court litigation. Few tenants who have been evicted keep tabs on what their landlords ultimately do with their old apartments. Even in a case like Pellow’s, where she learned her apartment’s fate, trying to regain it would be somewhat impractical, since she has relocated to the West Coast.
Even so, that is not the end of the impact of Pellow’s case; it saved a neighbor from eviction. In April 1999, Abe Haruvi’s brother Arthur, a co-owner of the East 71st Street building, filed papers to evict a 24-year tenant, who asked not to be named in this story. Arthur Haruvi argued that he needed the apartment for his daughter Aileen, who was graduating college-even though other units in the building were vacant. Attorney Himmelstein, who represents the unnamed tenant, argued that Arthur Haruvi was barred from bringing any owner’s use case because Abe Haruvi had already exercised that right in the Pellow case. By law, only one owner can exert the owner’s use law in a building, although that one can do it repeatedly.
The Haruvis argued that the case against Pellow was not an owner’s use eviction because it was settled with an agreement. But in the case of Himmelstein’s client, Housing Court Judge Marcy Friedman called that argument “wholly without merit,” since the Pellow agreement was resolved through a court order. Himmelstein won.
All that has apparently not dampened the Haruvi’s taste for clearing out buildings with owner’s use evictions. Just two weeks ago, one tenant in a Haruvi building at 450 West 57th Street got a notice from Arthur Haruvi saying that he and Abe are co-owners of the building, and warning the tenant that his lease would not be renewed because he intends to take over four apartments for himself and his wife, Ester. That tenant has until February 28 to move, or Haruvi will sue to evict them. The other three are awaiting similar notices.
“What he wants is all four apartments-27 rooms-for his wife and himself!” says longtime tenant Ray Roderick. “We’re model tenants. It’s shocking to us that we might lose our homes. There’s almost nothing more painful than that. I was always under the impression that we were secure. That’s what the politicians always say the rent laws are about. A sense of security for the average New Yorker.”
Threatened as the Haruvi tenants may be, it is possible that they may survive an owner’s use case if a judge scrutinizes Abe Haruvi’s past use of the law. Carl Goodman, the Village tenant, seems to have no such luck. In May, his walk-up building at 30 Perry Street was bought by H. Allen Whitehead, an estates attorney, and Aric Johnson, both from Washington, D.C. In June, Whitehead’s lawyer, Todd Rose, sent tenants letters saying that Whitehead “is intending to recover possession of the apartment for his own personal use and that of his family.”
Unlike in the Haruvi cases, neither Whitehead nor Johnson appears to have made a owner’s use claim in other buildings; they appear to have no other primary residence in the city, and they own the building as individuals rather than as a corporation. In other words, they seem to be well on their way to legally evicting Goodman; his partner, Mario R. Cavero; and their seven neighbors. Only one tenant, a disabled woman, and a couple, Mario and Marion Saulig, who are over 62, seem to have a chance, since the owner’s use law cannot be used against such tenants.
One glitch in Goodman’s favor may at least buy him two years before he is evicted. By law, landlords must notify tenants 120 to 150 days before their leases expire that they intend to take the apartments for their own use. Owners who miss that window must honor another lease, for up to two years, then start the process again. That is the situation Goodman is in.
“We don’t have any wiggle room,” says Goodman. “The only thing is for us to prolong it for two years. I guess that’s two years to think about where we’re going to live. I mean, this apartment is less than 250 square feet; it’s like a college dorm. But Perry Street is lovely and I don’t want to give it up. The threat is enormous, but the risk of fighting it is great. If we fight and lose, we could end up paying the landlord’s legal fees.” Another scenario would be to agree to leave with a buyout. One such tenant has already made such a deal.
Goodman says Rose has opened that door. “He said to me, ‘Let’s cut to the chase. How much money do you want to leave?’ ” says Goodman. “Even if we did get a buyout, that means the city has lost eight rent-regulated units. It’s a terrible outcome from a public-policy perspective.”
Rose was on vacation and could not be reached at press time; Whitehead did not return several calls, and Johnson could not be reached.
In a superheated real estate market, even with a buyout tenants are unlikely to be able to afford other Manhattan apartments. Most tenants at 30 Perry pay below-market rents; Goodman’s is $429. “Leaving a rent-stabilized apartment today means at least tripling the rent, and maybe not even finding a stabilized apartment at all.”
Indeed, Whitehead and Johnson themselves probably avoided sky-high real estate prices by buying an occupied rather than a vacant building, which usually sells for much less because of the protracted legal battles that ensue when a building is emptied. “Buying a 10-unit building full of rent-stabilized tenants on Perry Street is probably cheaper than buying a same-size building with an owner’s duplex and one apartment to rent,” says Himmelstein. “If the tenants fight him and he pays $10,000 a case plus $200,000 or so to renovate, he’s still ahead.”
Housing activist McKee notes that in Nassau, Suffolk, and Westchester counties, rent-stabilized tenants who have lived in a building for 20 years or more are protected against owner’s use evictions-a rule that would help some of Goodman’s neighbors if it were adopted by the city. The fact that it has not been “goes back to the original rent-stabilization law drafted by a committee made up of the real estate industry with no tenant advocates,” says McKee; in fact, part of that committee has evolved into the Rent Stabilization Association, the city’s most powerful landlord lobby. Bills in Albany are regularly introduced to make more stringent the standards for evicting rent-regulated tenants, but the Republican-dominated Senate regularly ditches them.
“We obviously need legislation to counter this, but I think it’s under the radar screen for most policy makers,” says Goodman, who notes that “the dissent this has caused already in my own little household is astonishing.” His partner, Cavero, thinks they should move out of the city entirely-a prospect Goodman can’t stomach.
Indeed, while Goodman says the situation has made him feel “astonishingly naive,” Cavero offers some wisdom. “We have a saying in Spanish,” he says. “It roughly translates like this: ‘He who made the law made the trick.’ “