Opinion
34838/2018
08-13-2019
DANI LAKE LLC, Petitioner-Landlord, v. Jose TORRES, Diana Alvarez, Respondents-Tenants.
Petitioner's Attorney, Law Office of Jeffrey Edelman, 200 Schermerhorn Street, Brooklyn, New York 11201, (718) 305-4131 Respondents' Attorney, Emilio Paesano, Esq., Mobilization for Justice, Inc., 424 East 147th Street, 3rd floor, Bronx, New York 10455, (212) 417-3818, HPD, NYC Dep't of Housing Preservation and Development, Division of Code Enforcement, 100 Gold Street-6th floor, New York, New York 10038
Petitioner's Attorney, Law Office of Jeffrey Edelman, 200 Schermerhorn Street, Brooklyn, New York 11201, (718) 305-4131
Respondents' Attorney, Emilio Paesano, Esq., Mobilization for Justice, Inc., 424 East 147th Street, 3rd floor, Bronx, New York 10455, (212) 417-3818, HPD, NYC Dep't of Housing Preservation and Development, Division of Code Enforcement, 100 Gold Street-6th floor, New York, New York 10038
Diane E. Lutwak, J.
BACKGROUND & PROCEDURAL HISTORY
This is a nonpayment proceeding commenced by Dani Lake LLC (Petitioner) to recover possession of Apartment 7 at 403 East 139th Street, Bronx, New York 10454 (the premises) based on the allegation that Jose Torres and Diana Alvarez (Respondents) failed to pay past due rent. The Petition is dated July 2, 2018, states that the premises are subject to Rent Stabilization and are "located in a single room occupancy building" and alleges that Respondents are in possession pursuant to a written lease agreement with a monthly rent of $1200. The Petition seeks arrears of $3350, comprised of $1200 for each of the months of June and July of 2018 and a $950 balance due for May 2018. Respondent Diana Alvarez, without benefit of counsel, filed an Answer to the Petition on July 20, 2018 asserting a defense of conditions in her apartment and/or the building which Petitioner did not correct, as well as a "general denial".
On the initial court date of July 31, 2018, a notation on the court file jacket indicates that the court made a referral to APS (Adult Protective Services at the New York City Human Resources Administration/Department of Social Services) . The case was adjourned to September 4 by stipulation stating that the landlord was to fill out a "W-9 form" and produce a copy of the deed and rental history. On September 4 the case was adjourned by stipulation to October 10 for Respondents to seek legal assistance. Respondent Alvarez retained legal representation from Mobilization for Justice who filed a Notice of Appearance on October 10.
The court file contains a letter dated 10/19/2018 from HRA/DSS indicating that Respondent Alvarez was ineligible for protective services.
The case was adjourned to November 27 in an agreement which set up access dates for a list of conditions to be inspected and repaired as required by law. Those conditions were listed as: "(a) exterminate; (b) floors throughout; (c) mold throughout; (d) bedroom window; (e) electric wiring throughout." On November 27 the case was adjourned to December 17 for trial or settlement, with a "Final Both Sides" notation on the court file jacket.
On December 17 the case was adjourned to January 22, 2019 with access dates scheduled for Petitioner to inspect and repair, as legally required, the following items: "water leak and ceiling damage in the living room and bathroom; exterminate for rodents, roaches and spiders; broken window in bedroom (window falls out of frame when opened); exposed wiring in kitchen next to stove/oven; all improvements listed in 3/15/17 agreement between Brett Francis and MJK30 LLC, Dani Lake LLC; finish bathroom ceiling and door saddle on shower; floor boards coming up; no heat-heater broken and insufficient heater units (only 1 heater in bedroom and that one broken)." A notation on the court file jacket states "No further adjournments w/o judge's approval." On January 22 the case was adjourned to February 19 for trial and marked final against both sides. On February 19 the case was transferred to Part X and then to Part T for pre-trial conference on March 7.
On March 7 the proceeding was adjourned by stipulation for trial on March 28 with access dates scheduled for Petitioner to correct the following conditions: "(a) Damaged wall (HPD violation); (b) Damaged ceiling (living room cracked); (c) Damaged flooring, holes; (d) Water damage throughout; (e) Damaged stove; (f) No kitchen cabinets; (g) No heat; (h) Damaged sink." By court order, an appointment was scheduled for one of the court's Resource Assistants to visit the premises on March 12 "to assure access has been provided as per stip." The stipulation also reflected the personal delivery to Petitioner's attorney of Respondent Alvarez's Amended Answer, which included three counterclaims: breach of the warranty of habitability, rent overcharge and harassment. While the stipulation provided Petitioner an opportunity to reject the Amended Answer and, if that occurred, a briefing schedule for motion practice no such motion practice ensued and Respondent's Amended Answer was filed on March 13, 2019.
The trial began on March 28, 2019. Petitioner's counsel appeared but Petitioner's agent did not, even after the court extended the calendar call several times until shortly after 11:00 a.m. Upon Petitioner's default, the court dismissed the Petition and allowed Respondents to proceed to trial on the counterclaims Respondent Alvarez had raised in her Amended Answer. On the first continued trial date of April 15, Respondent Alvarez's attorney filed a new Notice of Appearance, this time on behalf of both Respondents. Petitioner's attorney orally requested vacatur of the default. The court denied Petitioner's request without prejudice to a written motion and adjourned the case to May 3 for Petitioner to make such a motion and for continued trial. Petitioner did not serve and file a motion and the trial continued on May 3 and concluded on June 12. Only Respondents' attorney filed a post-trial brief.
TRIAL
Respondents presented their case through the testimony of Andrew Jones, Esq. and Respondent Torres as well as documents and photographs which were admitted into evidence without objection. Petitioner is the owner of 403 East 139th Street pursuant to a deed dated January 5, 2017. The building is registered with the New York City Department of Housing Preservation and Development (HPD) as a multiple dwelling containing 11 apartments: 1 "A" unit and 10 "B" units. The head officer and managing agent is Dani Kates, who has an office at 205 North 9th Street in Brooklyn. HPD has placed 47 violations on the building, six of which are in Respondents' unit on the third floor and comprised of one Class "A" violation for an illegally erected stud and sheetrock wall and five Class "B" violations for a broken/defective wall; infestations of mice and roaches; and missing smoke and carbon monoxide detectors.
Records from the New York City Department of Buildings' (DOB) website for 403 East 139th Street were also entered into evidence, comprised of:
• Alteration Application, permit issued 2/10/2017 for "Partial Job", described as "to remove ECB violation #34412311J & minor interior renovation also minor interior renovation work at all floors." A box marked "Owner's Certification Regarding Occupied Housing (Remain Occupied)" is marked "Yes" and a box marked "Owner Certification Regarding Occupied Housing (Rent Control/Stabilization" is marked "No".
• Overview for Complaint #2239567, last inspection date 2/21/2017, disposition date 2/22/2017, for "Partial Stop Work Order for newly installed water and sanitary piping installed without permits, inspections or test from cellar through the 1st floor".
• Open ECB Violations #35204320L and #35204321N dated 2/21/2017 for work without a permit for "newly installed water & sanitary piping and fittings installed from cellar to 1st floor", and "failure to have new or altered plumbing system tested", with respective outstanding penalties for $8000 and $5000, imposed on default.
• List of 21 complaints at 403 East 139 Street; seven are dated after the 2/21/2017 inspection date for #2239567 (described above), including:
• #2242299 with inspection date of 4/26/2017 for "work being done throughout the building without a permit. new floors and walls have been placed up. Most of the work has been completed at this point. Electrical and plumbing work complete."
• #2271966 with inspection date of 11/21/2018 for "exposed wires all throughout the apartments as well throughout the building" marked as "high priority".
• Property Profile Overview indicating "Partial Stop Work Order Exists On This Property" with "SRO Restricted" marked "Yes" and "DHCR Number of Units" marked "0010".
Respondents' apartment is registered as Rent Stabilized with the New York State Division of Housing and Community Renewal (DHCR), as reflected in certified copies of two rent registration history statements which were admitted into evidence, one certified on 9/11/18 (Respondent's Exhibit A) and the other certified on 3/6/19 (Respondent's Exhibit B). Both indicate "REG NOT FOUND FOR SUBJECT PREMISES" in every year from 1984 through 2012 as well as in 2014 and 2015. For the years 2013 and 2016, both reflect an apartment status of "RS" (Rent Stabilized), a tenant by the name of Victor Colon, weekly rents of $200.00 in 2013 and $700.00 in 2016 and filing dates of 12/12/2016 and 12/13/2016, respectively.
Where the two registration history statements differ are in the registrations for 2017 and 2018. For 2017, whereas the 9/11/18 registration statement states "REG NOT FOUND FOR SUBJECT PREMISES", the 3/6/19 statement reflects a registration filed on 11/21/2018 with a "Legal Regulated Rent" of $1306 and an apartment status of "VA" (Vacant). The 3/6/19 statement also reflects a 2018 registration, also filed on 11/21/2018, listing a "Legal Regulated Rent" of $1450, apartment status of "RS" and Respondents Diana Alvarez and Jose Torres as the tenants.
Also admitted into evidence without objection pertaining to the Rent Stabilized status of the premises were a DHCR Fact Sheet # 42 entitled "Hotels, SROs and Rooming Houses"; the New York City Rent Guidelines Board's (NYCRGB) chart listing all Hotel Orders issued from 1971 to 2019 which reflect no annual rent increases permitted since RGB Order # 38, for the period of 10/1/2008 through 9/30/2009, and no vacancy allowances authorized since 1983; and the NYCRGB's Hotel Orders for 2016, 2017 and 2018.
Mr. Jones, a staff attorney at Mobilization for Justice, attorneys for Respondents, testified about his observations at two home visits to the premises on March 12, 2019 from 10:30 to 11:30 a.m. and, prior to that, on the afternoon of December 14, 2018. At the March 12 visit also present was a Court Resource Assistant, who arrived at approximately 11 a.m. Mr. Jones observed workers in the building, although he did not observe any repairs being done. Thirty photographs taken by Mr. Jones that day — twenty-one taken in Respondents' apartment and nine in the common areas of the building — were entered into evidence. Mr. Jones described the apartment as having a bedroom, living room, kitchen and bathroom, all of which were in poor condition. The walls throughout the apartment looked old, cracked and crumbling, except for a new-looking wall separating the kitchen from the bedroom. An exposed brick wall in the living room had many holes in it and was covered in dust. The kitchen had exposed electrical wires, a nonworking stove and two long boards for shelving instead of cabinets. Mr. Jones described the bathroom as looking like a "construction site" - there was a toilet and shower but no sink and the ceiling needed plastering and painting. The floor boards were coming up throughout the apartment. There was no radiator in the bedroom. The condition of the common areas was also poor, with exposed wiring, walls in need of plastering and painting, and loose boards on the staircases and flooring which were crumbling and in a state of disrepair.
Respondent Jose Torres testified that he and Respondent Diana Alvarez have known each other for 35 years, have lived together for 25 years and receive "SSI" (Supplemental Security Income benefits from the Social Security Administration). Respondents moved in to the premises two and a half years ago, in early 2017. Prior to moving in they were living in a one-room apartment at 411 East 141 Street where they paid a monthly rent of $600. Steve Kates bought that building and "wanted everyone out". Mr. Kates offered Respondents $6000 to leave and they asked him if he could help them find a new place. Mr. Kates showed Respondents the subject apartment, where they saw there was no bathroom, no kitchen cabinets, a disconnected stove and various repairs needed. Mr. Kates initially said the monthly rent would be $700, and then they agreed it would be $800, although there was no written lease. Mr. Kates told Respondent Torres the apartment would be fixed and that "if you want a bathroom we can talk about it". After he moved in, Mr. Kates started giving Respondent Torres jobs to do, including installing a bathroom in the apartment.
Respondent Torres told Mr. Kates to keep the $6000 to put towards the security deposit, first month's rent and future months' rent until the money ran out. Respondent Torres testified that, "everything was verbal. I expected him to be honest. That was supposed to cover a year and two months." Respondent Torres testified that "after the $6000 ran out" he started to pay $800 a month, and at the direction of Mr. Kates did so by depositing the funds into a bank account at TD Bank that belonged to Mr. Kates' daughter. The bank gave him receipts for his payments and he did this "for a couple of months" until, about a year ago, the landlord tried to raise the rent to $1200 by offering a lease which Respondents refused to sign.
Regarding the condition of the apartment, Respondent Torres testified that there are "rat holes" throughout the apartment, some of the floor boards are loose and the walls have peeling paint. Rust comes down from the living room ceiling when it rains and now the sheetrock is falling leaving a big hole; Respondents have had to cover and remove things from that room to protect them. In the kitchen, the sink is "decent" and the refrigerator works, but the only cabinet is one that was installed above the sink and the stove is still disconnected. There are also infestations of cockroaches and mice; Respondent Torres testified he "must have killed over 65 mice", purchased glue traps and asked Mr. Kates many times to send an exterminator; an exterminator came only once, after this case started. Photographs taken approximately a year and a half ago of mice and cockroaches in the apartment were admitted into evidence without objection. Respondent Torres testified that Mr. Kates made many promises to take care of the conditions but did not follow through and instead told the super to cut the chain on his bike and slash his tires and told other people to harm him to get him out of the building. Respondent Torres spoke to Mr. Kates about these things and Mr. Kates offered to give him $6000 to move out. The super also told Respondent Torres that the landlord would give him money to leave. Respondent Torres testified that Mr. Kates "has a filthy mouth" and referred to Ms. Alvarez as "your low-down wife".
Regarding the access date of March 12, 2019 which was agreed upon in court on March 7, 2019 in a written Stipulation, Respondent Torres testified that he thinks that was the day Mr. Kates "was talking nasty, calling me names." The ceiling was repaired with a "2x4 board, sheetrock and some compound" and painted; however, it is still leaking. They also installed a light fixture in the bathroom and a cabinet above the kitchen sink. However, they did not put in a sink in the bathroom, did not scrape and paint, did not fix the holes where the rats come in, did not fix the floors and did not connect the stove.
On cross examination and in response to a few questions from the court Respondent confirmed that he and Ms. Alvarez moved in with no written lease, just a verbal commitment to pay $800 per month. He would go to TD Bank with $400 at a time and deposit it into Mr. Kates' daughter's account. The bank would give him receipts, which he did not bring to court but has at home. The last time he paid rent was about a year ago. Respondent testified that he does plumbing, electrical work and carpentry and that he charged Mr. Kates $3000 to "do the bathroom — plumbing, everything". Mr. Kates told Respondent that upon completion of the bathroom he would charge $200 more per month for the rent. The bathroom has a functioning toilet and shower, which Mr. Kates purchased and Respondent installed, but no sink and the floor was not tiled. Mr. Kates only gave him $500 on Christmas so he stopped working on the bathroom. Mr. Kates purchased other plumbing pipes which Respondent installed from the first to the third floor of the building. Respondent also did other work for Mr. Kates in another building for which Mr. Kates was supposed to pay him $150 per day for 39 days of work. All of the agreements with Mr. Kates were verbal and "he didn't want anything on paper." About six months after they moved in is when someone approached Respondent with the lease that neither he nor Ms. Alvarez signed.
Respondents rested and moved to amend the answer to conform to the proof pursuant to CPLR § 3025(c). A decision on this motion was reserved.
DISCUSSION
As a preliminary matter, while the Petition was dismissed upon Petitioner's default at trial, the Court may consider the counterclaims raised in Respondent Alvarez's Amended Answer. See, e.g., 13 E 9th St LLC v. Seelig (2019 NY Slip Op 50582[U], 63 Misc 3d 1218[A][Civ Ct NY Co 2019] ) and cases cited therein.
Further, the Court grants the request to deem Respondent Alvarez's Answer amended to conform to the proof at trial under CPLR § 3025(c), which allows a party to amend a pleading "before or after judgment to conform the [pleading] to the evidence". Absent prejudice, courts are free to permit amendment after trial, and a request to amend "is determined in accordance with the general considerations applicable to such motion, including the statute's direction that leave ‘shall be freely given upon such terms as may be just’ ( CPLR 3025 [b] )." Kimso Apts, LLC v. Gandhi (24 NY3d 403, 411, 23 NE3d 1008, 1013, 998 NYS2d 740, 745 [2014] ). Accordingly, Respondent Alvarez's counterclaims based on breach of the warranty of habitability and harassment are deemed amended to include all the conditions and allegations as to which there was testimony at trial.
First Counterclaim — Breach of the Warranty of Habitability
New York Real Property Law § 235-b provides for an implied warranty of habitability which requires landlords of residential premises to keep them "fit for human habitation" and free of conditions that are dangerous to the life, health or safety of the tenants. Park West Management Corp v. Mitchell (47 NY2d 316, 327, 391 NE2d 1288, 1294-1295, 418 NYS2d 310, 317 [1979] ). As explained by the Court of Appeals in Park West Management Corp v. Mitchell, supra, "a landlord is not required to ensure that the premises are in perfect or even aesthetically pleasing condition; he does warrant, however, that there are no conditions that materially affect the health and safety of tenants. For example, no one will dispute that health and safety are adversely affected by insect or rodent infestation, insufficient heat and plumbing facilities, significantly dangerous electrical outlets or wiring, inadequate sanitation facilities or similar services which constitute the essence of the modern dwelling unit." If a landlord breaches the warranty of habitability, the proper measure for damages is "the difference between the fair market value of the premises if they had been as warranted, as measured by the rent reserved under the lease, and the value of the premises during the period of the breach." Park West Management Corp v. Mitchell, supra. The award may take the form of a sum of money awarded the tenant in a plenary action or a percentage reduction of the contracted-for rent as a setoff in a summary nonpayment proceeding in which the tenant counterclaims, or pleads as a defense, breach by the landlord of its duty to maintain the premises in habitable condition. Id.
Respondent Torres testified credibly as to the fact that most if not all of the current conditions in the apartment have existed for the entire length of his tenancy. There was no evidence as to the specific date Respondents moved in, and initially Respondent Torres, who took the witness stand on June 12, 2019, testified that he and Respondent Alvarez had lived there for "two years and six months" which would date the commencement of the tenancy back to mid-December 2016. However, he also acknowledged that he moved in in 2017. Accordingly, the Court finds that the tenancy commenced in January 2017.
The current conditions in the apartment, not including the bathroom which is discussed below, include severely cracked plaster and peeling paint on the walls and ceilings throughout the apartment; crumbling mortar on the exposed brick wall in the living room; defective flooring; infestations of mice and cockroaches; and a nonworking stove and oven. In the common areas of the building there is exposed electrical wiring, defective flooring on the stairs and landings, cracked plaster and peeling paint on the walls and ceilings. These conditions were well documented in the photographs which were admitted into evidence through the testimony of both Respondent Torres and Andrew Jones, who took photographs on March 12, 2019 and testified that the apartment on that date was in the same condition it was in when he visited three months earlier on December 14, 2018.
Petitioner has had notice of the conditions both because they existed when its agent Steve Kates showed the apartment to Respondents before they moved in and because Respondent Torres has spoken about them with Mr. Kates on many occasions. Further, HPD found one "Class A" (non-hazardous) and five "Class B" (hazardous) violations under Section 27-2115 of the New York City Housing Maintenance Code in Respondents' apartment on August 2, 2018 and notified Petitioner of them on August 8, 2018. In addition, DOB issued a partial "stop work" order on February 21, 2017 which has still not been resolved.
Regarding the bathroom, Respondent Torres testified that there was no bathroom in the unit when Mr. Kates first showed it to him and that he is the one who installed it. There was no testimony about whether or not Respondents had access to a shared bathroom in the public hallway, as appears on the "I-Card" to exist, and bathrooms are not required in "B" units such as the one Respondents live in on the third floor of the subject building. See generally Sierra v. City of New York (579 F Supp 2d 543, 544 [SDNY 2008] )(noting that single room occupancy units are defined as " ‘rooming units’ that lack either an in-unit kitchen or an in-unit bathroom"); and see DHCR Fact Sheet # 42, discussed below. Mr. Jones described the bathroom as looking like a "construction site" and testified that it had no sink and the ceiling needed plastering and painting. However, it was unclear from Respondent's testimony what exactly was the agreement he had with Mr. Kates regarding responsibility for completing and legalizing the work. Accordingly, the court is not willing to abate the rent due to the condition of the bathroom. The absence of kitchen cabinets until recently when a cabinet was installed above the sink to replace open shelving also does not warrant an abatement, as Respondents point to no legal requirement that there be cabinets in a kitchen.
Based on the conditions described above, the value of Respondents' apartment has been reduced by 15% for the 30-month period of January 2017 through June 2019 and Respondents are entitled to a money judgment, the amount of which is calculated based on a monthly rent of $800, which is the amount Respondent Torres testified he was charged and did pay for a period of time. Respondents are entitled to a money judgment for $3600, comprised of $800 x 15% abatement x 30 months.
Second Counterclaim — Rent Overcharge
As a starting point the Court notes that it is undisputed that Respondents are Rent Stabilized tenants of a "single room occupancy [SRO] building" (Petition at ¶ 6). While there is no Certificate of Occupancy for the building, the Court takes judicial notice of the "I-Card" (Initial Inspection Card) which is available on HPD's website and which indicates that the building was erected prior to 1929 and that as of July 11, 1940 it contained one duplex "Class A" apartment located in the basement and on the first floor and ten other "Class B" units, also described as "sleeping rooms", one on the first floor, four on the second floor and five on the third floor. Respondents' apartment on the third floor of the building, accordingly, is a "Class B" unit. Regarding "w.c.'s" (water closets i.e. toilets), the I-Card indicates that there were three in the building in 1940: one in the "Class A" apartment and one in each of the public halls on the second and third floors, with a "1 to 5" ratio of w.c.'s to "sleeping rooms".
Aside from the Petition's assertion that Respondents are Rent Stabilized SRO tenants, the facts presented and as described above fit within the general description of a Rent Stabilized SRO tenant as described by the DHCR in its Fact Sheet # 42:
Generally, in New York City, for a hotel, Single Room Occupancy Hotel (SRO) or rooming house to be subject to the Rent Stabilization Code (RSC), it must have been constructed on or before July 1969, and contain six or more housing accommodations. This universe contains Class A and Class B Multiple Dwellings. Generally, Class A Multiple Dwellings are used for permanent residence purposes and consist of units that contain kitchens and bathrooms. Generally, Class B Multiple Dwellings, which include SRO Hotels and rooming houses and which became subject to rent regulations on June 4, 1981, contain units occupied by transient residents and are not required to have a kitchen or bathroom in each unit. The occupant of a hotel, SRO or rooming house may only be protected by rent stabilization if he or she becomes a "permanent tenant". A permanent tenant is an individual or his or her family member residing with such individual, who: (1) has continuously resided in the same building as a principal residence for a period of at least six months; or (2) who requests a lease of six months or more, which the owner must provide within 15 days; or (3) who is in occupancy pursuant to a lease of six months or more even if actual occupancy is less than six months.
See also Rent Stabilization Code, 9 NYCRR § 2520.6(j) (definition of "permanent tenant").
The subject building at 403 East 139th Street in the Bronx was constructed before July 1969, there are six or more housing accommodations in the building and Respondents are "permanent tenants" as they have continuously resided there for at least six months.
A landlord cannot charge a Rent Stabilized SRO tenant more than the legal regulated rent, which "is equal to the most recent rent charged the prior permanent tenant (assuming that the rent so charged was legal), plus any lawful guidelines increase in effect at the time of the commencement of the permanent tenancy, in accordance with Hotel Orders promulgated by the RGB". Kanti-Savita Realty Corp v. Santiago (18 Misc 3d 74, 852 NYS2d 579 [App Term 2nd Dep't 2007] ). Further, under Part F of the recently enacted Housing Stability and Tenant Protection Act [HSTPA], 2019 Session Law News of NY, Ch 36 [June 2019], the Court is to consider all available rent history and "the legal regulated rent for purposes of determining an overcharge, shall be deemed to be the rent indicated in the most recent reliable annual registration statement for a rent stabilized tenant filed and served upon the tenant six or more years prior to the most recent registration statement, plus in each case any subsequent lawful increases and adjustments." HSTPA Ch 36, Pt F, § 1(1)(i).
Here, whereas the Petition alleges there is a lease for $1200 and seeks arrears at this monthly rate, the undisputed testimony of Respondent Torres was that the parties never executed a written lease and the only agreement they had was an oral one for Respondents to pay $800 per month which they did for a period of time. When Petitioner thereafter offered them a lease for $1200 they refused to sign it and stopped paying rent.
Turning to the DHCR Rent Registration history, it appears that the most recent reliable annual registration statement is the one filed on December 12, 2016 for Registration Year 2013, showing a prior tenant by the name of Victor Colon with a weekly rent of $200, which translates to a monthly rent of $866 (4.33 weeks per month). The amounts registered in the following years of 2014 through 2018 are not reliable, as follows:
• 2014 and 2015 — no registrations filed at all;
• 2016 — registered in the name of the prior tenant Victor Colon with a weekly rent of $700, more than three times what he had been charged three years earlier even though the NYCRGB had not authorized any increases for "hotel" tenants, which includes SRO tenants such as Respondents;
• 2017 — registered as vacant with a monthly rent of $1306, when the undisputed testimony was that Respondents had moved in at the beginning of that year and therefore should have been listed as the tenants for that year's registration, although not with a rent of $1306.
Accordingly, the current legal regulated rent for Respondents' SRO unit is $866 per month. However, Petitioner never charged this amount and accepted rent from Respondents at the lower monthly rate of $800, in the form of semi-monthly payments of $400 each by direct deposit into a bank account in the name of Steve Kates' daughter. As Respondents never paid more than the legal regulated rent there is no overcharge.
Third Counterclaim - Harassment
Pursuant to the Housing Maintenance Code, Administrative Code of the City of New York (NYC Admin Code) § 27-2005(d), "[t]he owner of a dwelling shall not harass any tenants or persons lawfully entitled to occupancy of such dwelling as set forth in paragraph 48 of subdivision a of section 27-2004 of this chapter." NYC Admin Code § 27-2005(d) "protects residential tenants from harassment by building owners," and was created "to address a perceived effort by landlords to empty rent-regulated apartments by harassing tenants into giving up their occupancy rights ...." Aguaiza v. Vantage Props (69 AD3d 422, 423, 893 NYS2d 19 [1st Dept 2010] ).
NYC Admin Code § 27-2004(a)(48) defines harassment as the following, in relevant part:
any act or omission by or on behalf of an owner that (i) causes or is intended to cause any person lawfully entitled to occupancy of a dwelling unit to vacate such dwelling unit or to surrender or waive any rights in relation to such occupancy, and (ii) includes one or more of the following: a. using force against, [or making threats] that force will be used against, any person lawfully entitled to occupancy; a-2. making a false statement or misrepresentation as to a material fact regarding the current occupancy or the rent stabilization status of a building or dwelling unit on any application or construction documents for a permit for work which is to be performed in the building; b. repeated interruptions or discontinuances of essential services; b-2. repeated failures to correct hazardous or immediately hazardous violations of this code; f-2. contacting any person lawfully entitled to occupancy of such dwelling unit to offer money or other valuable consideration to induce such person to vacate such dwelling unit or to surrender or waive any rights in relation to such occupancy, unless [owner provides certain disclosures in writing]; f-3. offering money or other valuable consideration to a person lawfully entitled to occupancy of such dwelling unit to induce such person to vacate such dwelling unit while engaging in any of the following types of conduct: (1) threatening, intimidating or using obscene language; g. other repeated acts or omissions of such significance as to substantially interfere with or disturb the comfort, repose, peace or quiet of any person lawfully entitled to occupancy of such dwelling unit and that cause or are intended to cause such person to vacate such dwelling unit or to surrender or waive any rights in relation to such occupancy.
See generally Giacobbe v. 115 Mulberry, LLC (2018 NY Misc LEXIS 836, 2018 NY Slip Op 30415[U][Sup Ct NY Co 2018] ). The Housing Maintenance Code further provides that, upon a finding of harassment, the court shall impose a civil penalty of not less than $2,000 and not more than $10,000. NYC Admin Code § 27-2115(m)(2).
The credible, undisputed testimony and government agency documents admitted into evidence established that Petitioner engaged in several types of prohibited conduct that constitute harassment:
• Petitioner's agent Steve Kates threatened Respondent Torres with force by telling the super to cut the chain on his bike and slash his tires and telling other people to harm him to get him out of the building, which constitutes harassment under § 27-2004(a) (48)(a-1) ;
• Petitioner filed an alteration application with the DOB "to remove ECB violation #34412311J & minor interior renovation" which includes a misrepresentation as to the rent regulated status of the building's occupants in that the box marked "Owner Certification Regarding Occupied Housing (Rent Control/Stabilization)" is marked "No", which constitutes harassment under § 27-2004(a)(48)(a-2) ;
• Intentional failure to make repairs and correct outstanding violations, including five categorized as "Class B"/hazardous, which constitutes harassment under § 27-2004 (a)(48)(b-2) ;
• Petitioner's agent Steve Kates offered Respondents $6000 to move out of the subject premises without complying with § 27-2004(a)(48)(f-2), and spoke to Respondent Torres with a "filthy mouth", referring to Respondent Alvarez as "your low-down wife", which constitutes harassment under § 27-2004(a)(48)(f-3).
All of these actions by Petitioner were intended to illegally force Respondents out of possession of the subject premises and constitute prohibited harassment within the scope of the Housing Maintenance Code. See, e.g., Leprovost v. Pitts (46 Misc 3d 1216[A], 9 NYS3d 593 [Civ Ct NY Co 2015] )(finding that landlord harassed tenant "by breaking down her door, breaking into her room, destroying her property, having others intimidate her, and denying Petitioner essential services").
While it was not clear from the evidence exactly what Steve Kates's role and/or title is with regard to Petitioner Dani Lake LLC, or what his relationship is to Dani Kates - the person listed as Petitioner's managing agent and head officer on the multiple dwelling registration on file with HPD - based on Respondent's testimony it is evident that Steve Kates falls within the Housing Maintenance Code's broad definition of an "owner", which includes the "lessee, agent, or any other person, firm or corporation, directly or indirectly in control of a dwelling." NYC Admin Code § 27-2004(a)(45). Steve Kates is the only person connected to Petitioner with whom Respondents dealt directly and is the person who showed them the subject premises, spoke with them about the terms of their tenancy and repairs and directed them to pay rent by making deposits into his daughter's bank account.
Based on the foregoing the court finds that Petitioner has harassed Respondents in violation of NYC Admin Code § 27-2005(d). Such harassment constitutes a "Class C"/ "immediately hazardous" violation under NYC Admin Code § 27-2155(m)(1) warranting imposition of a penalty in accordance with that section of the Housing Maintenance Code.
CONCLUSION
Accordingly, Respondents are entitled to a money judgment on their counterclaim for breach of the warranty of habitability in the amount of $3600 comprised of 15% of the rent at the rate of $800 per month for the period of January 2017 through June 2019. On the counterclaim for harassment, Petitioner is hereby directed to restrain from engaging in any conduct in violation of NYC Admin Code § 27-2004(a)(48). Further, based on Petitioner's undisputed conduct constituting harassment under the Housing Maintenance Code, the Court directs that a "C" violation be entered and imposes the minimum penalty of $2,000 on Petitioner, payable to the New York City Commissioner of Finance. This proceeding is restored to the Court's calendar for a hearing on Respondents' claim for attorneys' fees on October 30, 2019 at 9:30 a.m.
This constitutes the Decision and Order of this Court, copies of which are being mailed to HPD and to the parties' respective counsel, unless picked up in the Part forthwith. The documents entered into evidence at trial by Respondents will be held for thirty days and may be picked up from the Part S/T clerk in Room 409/410 of the courthouse.