This is What happens When You Give a Defaulting Tenant a Mountain of Leverage

November 6, 2017

I get substituted in for other landlord’s counsel a lot – I mean no disrespect to other counsel by that statement. The problem is that most firms that represent landlords have a low-price-volume-case-load business model. That actually makes perfect sense for most non-payment cases. But not for all cases.

In this cluster-mess of a case in Brooklyn[1], the owner got four pieces of terrible legal advice.

First, the lawyer told the owner that the tenant had no right to have two roommates. Well, that may be true (see the booklet on this topic on my Booklets page). But, the two occupants were not both roommates. One was the same-sex life-partner of the tenant. That person was the tenant’s family and had every right to be in the apartment – and the family had a right to a roommate.

Second, the lawyer was trying to force a backdated Rent Stabilized lease on the tenant. That is not legal.

Third, the lawyer told the owner not to accept an $11,000.00 HRA arrears payment check. You can’t do that! A defense to a nonpayment case is…hello?…payment. Not to mention that this is possibly source-of-income discrimination.

Fourth, the tenant was always in arrears. There were no repairs issues. Yet, every time the case got close to trial, owner’s counsel told her to settle with a large abatement.

The tenant took his case to very-experienced-tenant’s-counsel. What did very-experienced-tenant’s-counsel see? They saw a tenant who was being hassled about the occupancy of her spouse, who was being hassled over her Rent Stabilized lease date, whose welfare payments were being baselessly rejected by landlord, and who was getting sued all the time, even though she was getting abatements! Very-experienced-tenant’s-counsel brought a discrimination case against owner!

That’s when owner came to me. I had to give them lots of tough love. They were fighting all the wrong fights, and in doing so, they had given this perpetually defaulting tenant a mountain of leverage.

It took about two years to extricate owner from the situation. I started from the beginning and did everything by the book, from the lease forward. It is difficult in these situations to recreate trust between the parties. Opposing counsel typically needs to see me walk the walk, as well as, talk the talk. Ultimately, the tenant and her counsel decided that she really could not afford the unit and she decided to move in with family elsewhere. Owner helped her on her way with a fair buyout.

What’s the lesson? The lesson is that owners and their volume-priced-counsel need to identify when a case is no longer a good fit for a volume practice.