February 25, 2024

At this stage in my career journey and at my price-point, I typically do not get hired by landlords of Rent Stabilized buildings unless it is for consulting, development, or for a very hairy apartment or building situation. This story is about a very very hairy apartment situation.

To start with, the landlord, a recent purchaser of the building, did not even understand what was going on with the apartment. All the landlord knew was that it was told by the seller that, even though this was a generally violation-free building where all the tenants were paying their rent, this one apartment had not paid rent in years and the tenant was reportedly very difficult to deal with regarding access for the many needed repairs. They presented me with a dusty banker’s box filled with documents.

The first thing I did was cause my staff to scan everything, so we had electronic copies. Turns out there were 780 pages. Then I started wading through the material, as I prepared what I call a Legal Project Management Analysis Letter. Here is what I found at the conclusion of my analysis:

• The tenant had been there for 30 years.

• In this otherwise violation-free building, there were an astounding 82 HPD violations against this one apartment, and they were all posted within the last 4 years.

• There were also DOB violations posted against the apartment because leaks had caused structural issues.

• Over a period of 20 years, the tenant had filed 17 DHCR Proceedings, and had prevailed on most of them. The rent was effectively frozen at a rate from twenty years ago. Restoring the rent would require removing the conditions and filing DHCR proceedings to lift the rent reduction orders, which no former landlord had attempted to do.

• The tenant paid rent sporadically but (allegedly) owed years of back rent.

• The tenant was (again, allegedly) not providing access. Although the 780 pages seldom contained an appropriate access request from the former owners.

• The lease had not been renewed in years, a requirement under Rent Stabilization.

• A mill firm had recently brought a nonpayment case against the tenant. It was dismissed (for all the reasons I have set forth above), but tenant’s counterclaim against the landlord for a claim for his* legal fees was still extant and waiting for a hearing.

• There had been other Housing Court cases against the tenant as well, and he always came out on top.

In short, it was one of the biggest messes I had ever seen. What appears to have happened here is that each owner of the building, in succession, had gotten frustrated with the unit and just given up. A new owner came in, did NOT look through the voluminous file, and therefore, did not understand that the rent was frozen by DHCR. The new owner reflexively brought a new Housing Court case against the tenant, which resulted in the new owner getting its !@# kicked, because it was inadvertently bringing a defective case based upon a false rent. The tenant allowed some access for repairs but then changed his mind and barred access. The new busy managing agent, who was now in charge, threw up her hands and quit trying. Then the tenant filed a new round of DHCR proceedings and won those as well. The building got sold, and the cycle repeated with the next owner. And the next. And the next! Until it got to the present owner, who gave the case to me.

I started by explaining the situation to my client in my 41-page Legal Project Management Analysis Letter. I told them I could help, but only if I had free reign to operate at my discretion.

I sent the tenant a letter, chronicling all that I had unearthed in the 780 pages, telling him that I wanted a chance to be different than anyone he had dealt with on the landlord’s side before, and imploring him to give my letter to his counsel. It took a minute, but eventually my letter made its way up the food chain, and a senior legal aid attorney was assigned to represent the tenant. That lawyer was impressed with my letter and was willing to work with me.

We settled the case in a global way, designed to deal with absolutely every outstanding issue with respect to the apartment, and to get the tenancy back on track. We started by working on a joint spreadsheet. We agreed upon the collectible rent, based on a review of all the DHCR orders. Then we figured out what the overcharge to the tenant would have been, had he paid all his rent. Then we offset the overcharge with the unpaid rent, measuring, of course, the unpaid rent using the collectible amount and not the amount charged. The tenant stilled owed money after that calculation! But we offset what tenant owed with a legal fee award number we assumed that landlord might owe tenant if the Housing Court legal fee hearing went forward. We got the financial part done.

Then we made a plan for access. Legal aid agreed to keep autopsies over the matter in case there was a problem with access. The tenant agreed he would allow access, incentivized by a new refrigerator and his choice of custom light fixtures.

We also did important legal housekeeping. We created and included in the settlement agreement a chart of every single DHCR proceeding and rent reduction order, so that future landlord or tenant counsel on this matter would never have to re-invent the wheel as we did. This would also facilitate the landlord’s future attempts to get the DHCR rent reduction orders removed as the repairs got done.

The lease was renewed in the context of the settlement agreement and the tenant agreed to begin paying the collectible rent.

What’s the lesson? The tenant felt heard for the first time in 30 years. Because I listened. I organized and read the 780-page file. Then I communicated with the tenant in writing in a manner designed to get the attention of a sophisticated practitioner at whatever free legal services organization he was using, someone who would roll up their sleaves and work with me in untangling 30 years of a !@#$. I convinced my landlord-client that there was nothing to fight about here, it was all about putting the train back on the track. Better to buy the tenant a refrigerator than to pay me (or any lawyer) for a legal fee hearing at which the landlord was doomed anyway. I achieved the landlord’s goals of removing the violations (which were becoming problematic with their lender) and getting the rent stream flowing again.

Respectfully submitted,

Michelle Itkowitz

* Some details changed to protect the innocent.