Landlord v. Tenant

Rent: 10% Late Fee Excessive

Former tenant sued landlord to recover a security deposit and late fee payments totaling $5,000. Landlord claimed that tenant owed $1,944 in back rent. Tenant showed that he had paid a security deposit of $3,080 and late fees of more than $2,000 under a lease clause assessing a penalty of 10 percent of tenant's rent. The court ruled for tenant and against landlord. Landlord appealed and lost. The court's decision provided substantial justice to the parties. Tenant was entitled to the return of his security deposit. And a 10 percent late fee was unenforceable as a penalty since it was clearly disproportionate to any loss that landlord may have suffered by tenant's late payment.

• Wilsdorf v. Fairfield Northport Harbor, LLC: NYLJ, 3/2/12, p. 24, col. 5 (App. T. 2 Dept.)

Rent Reduction Ordered: Landlord Didn't Document No-Access Claim

Rent-stabilized tenant complained of a reduction in services based on various apartment conditions. The DRA ruled for tenant and reduced his rent. Landlord appealed, denying any reduction in services and claiming that tenant failed to give access for repairs. The DHCR ruled against landlord. The DHCR inspection showed, among other things, that the stove was defective; the kitchen floor was uneven and had cracked, missing tiles; and the kitchen ceiling and walls had peeling paint and cracked plaster. And landlord didn't prove a valid no-access claim. Landlord should have submitted copies to the DHCR of two letters written to tenant attempting to arrange access for repairs. Each letter must have been mailed by certified mail, return receipt requested, at least eight days before the date proposed for access.

• Schertz: DHCR Adm. Rev. Docket No. ZC110025RO (2/3/12)

Rent Stabilization Coverage: Landlord Can Seek Rescission of Stabilized Lease

Tenant sued landlord, claiming that his apartment was rent stabilized. Landlord had rented it to tenant as an unregulated unit. The court ruled for tenant. Landlord then asked the court for permission to amend its answer to add a claim for rescission. Tenant argued that a rent-stabilized lease wasn't subject to rescission and that landlord couldn't add this claim since the court had already decided that he was rent stabilized.

The court ruled for landlord. When tenant rented the large apartment, he told landlord he earned $170,000 per year, that his fiancee was moving into the apartment with him, and that they planned to have a large family. But tenant lied about his employment and fiancee. He was unemployed, used the apartment as a bed and breakfast, and rented rooms at excessive rents. There was no final decision in the case yet, and if landlord proved that it relied on tenant's fraudulent representations, it could have grounds to rescind the lease.

• Garcia v. D. Camilleri, LLC: 2012 NY Slip Op 50535(U), 2012 WL 987611 (Sup. Ct. NY; 3/23/12)

Rent Overcharge: Tenant's Garage Rent Subject to MBR Increases

Rent-controlled tenant complained of a rent overcharge after landlord increased his monthly garage rent from $65 to $135. This increase was more than the annual 7.5 percent MCR increase permitted under rent control. The DRA ruled against tenant, finding that the garage rent was a separate charge from the apartment rent, wasn't included in the MCR, and that the garage space was an optional service not covered by rent control regulations.

Tenant appealed and won. Tenant pointed out that prior landlord had issued only one garage lease to tenant in 1970 and had previously limited garage rent increases to 7.5 percent. Although the garage space wasn't included as an essential service for the apartment on April 30, 1962, nothing in the rent control regulations prevented landlord and tenant from later agreeing to a new service. The maximum rent for the garage space was $65 per month plus tax between Jan. 1, 2010, and Dec. 31, 2011. Starting Jan. 1, 2012, landlord could increase the garage rent by the 7.5 percent if MBR increases were granted for 2012-13. The rent would be subject thereafter to future MBR increases.

• Cooper: DHCR Adm. Rev. Docket No. ZJ120032RT (2/1/12)