March 27, 2017

I represented a young, multifamily-building-owner in Queens(1) and I was hired to rescue the landlord after another firm had put him into suit on a holdover against a tenant that turned out to be Rent Stabilized, drawing some massive fire from Legal Aid.

Actually, a big part of my practice is what I have come to call “cleanup crew cases”. I clean up other landlord firms’ messes. Look. There is definitely a place in this town for the “mill” landlord and tenant firm; the firms that do a million cases a day for pennies an appearance and get defaulting tenants into stips, etc. Landlords need that service. Apparently, many tenants cannot get the public assistance they need unless and until a nonpayment is initiated. 

The problem is when such firms file holdovers in multifamily buildings. Please stick to the nonpayments!

The very first question that any landlord’s counsel has to ask when they are considering doing a holdover against an allegedly “free market” tenant in a multifamily building is simply this – is the tenant REALLY free-market??? Nine times out of ten, the answer is — NO — the tenant is NOT really free-market, just because someone registered the unit that way at DHCR. 

So, this was such a case. The tenant was engaging in some really bad behavior in the unit. The landlord told their mill-L&T lawyer about it. The mill-L&T lawyer said something like, “Oh look, the DHCR Rent Registration Roll says tenant is ‘High Rent Vacancy Deregulated’, let’s do a holdover. That will solve your problem!”

Brilliant idea. Except for the fact that such deregulation was a total farce. Stop! If registering an apartment as deregulated MADE it deregulated, then every landlord would just do that…so stop. Back to the story — In comes Legal Aid, demanding a Rent Stabilized lease, asserting an overcharge, and asking for legal fees. 

The landlord came running to me. 

I looked at it and told the landlord he had been badly advised and had made a mistake. This tenant WAS entitled to a Rent Stabilized lease. Curiously, however, there was no overcharge. The rent had flat-lined for 8 years. I wrote a letter to Legal Aid and said something to this effect, “I am here now. Landlord realizes the error of its ways. We will give you the lease. We will pay you for your trouble. And let’s talk about the tenant’s bad behavior that sparked all this in the first place and have a holistic settlement so these parties can live together in peace.”

Legal Aid wasn’t having it (by the way – this isn’t REALLY Queens, so you can’t know which Legal Aid office I am talking about, I respect them all.) I got an attorney over there who insisted there was an overcharge. But there wasn’t! So now, I went from the unreasonable former landlord’s counsel to the unreasonable tenant’s counsel. 

From here, it’s a long story, having to do with summary judgment motions and fraud, which are two concepts that do not belong in the same sentence together, but I digress…

It took longer than I wanted it to, but without having to do any serious litigation, I managed to convince tenant’s lawyer of the wisdom of a holistic settlement. My client really meant this tenant no harm. He was just badly advised. When he came to me and realized that fact, he was big enough to say mea culpa and to offer to make it right. If you punish people for honesty and humility, then how can you expect continued honesty and humility?

What’s the Lesson? I will repeat the lesson, because it is massively important. The lesson is, the very first question that any landlord’s counsel has to ask when they are considering doing a holdover against an allegedly “free market” tenant in a multifamily building is simply this – is the tenant REALLY free-market??? Nine times out of ten, the answer is — NO — the tenant is NOT really free-market, just because someone registered the unit that way at DHCR. 

Respectfully submitted,

Michelle Maratto Itkowitz

(1) Some details changed to protect the innocent.