Opinion
17010357
11-01-2017
Bonham Strand, LLC, Petitioner-Landlord, v. Richard Paredes / Leonor Hilda Carvajal (AKA) Hilda Carvajal, Respondents-Tenants.
Bonham Strand, Petitioner-Landlord appeared pro se Richard Paredes/Leonor Hilda Carvajal was represented by Christopher Schweitzer of Legal Services of the Hudson Valley
Bonham Strand, Petitioner-Landlord appeared pro se Richard Paredes/Leonor Hilda Carvajal was represented by Christopher Schweitzer of Legal Services of the Hudson Valley Bonnie L. Orden, J.
Richard Paredes and Leanor Hilda Carvajal (AKA Hilda Carvajal), Respondent-Tenants in the instant action, have been residing in Apt 4N at 2 Main Street in Dobbs Ferry, NY, since 2011. The building, ostensibly owned by Petitioner-Landlord; Bonham Strand, LLC, is registered as a rent-stabilized building with the Division of Housing and Community Renewal (DHCR).
On April 20, 2017, Respondents brought a motion for summary judgment pursuant to CPLR §3212. Respondents claim, inter alia, that summary judgment should be granted for one or more of the following reasons: Respondents have not waived their rights under the Rent Stabilization Code, even though Respondents signed a Rider that expressly waived their rights under the Emergency Tenants Protection Act (ETPA); Respondents cannot be charged for water usage as such would be violative of 9 NYCRR §2520.6 (r)(1); the late fee clause is unenforceable because it is unconscionable and penal in nature; and pursuant to RPAPL §711 (2), a summary proceeding may only be maintained for nonpayment of rent. Further, Respondent claims that since there is no base rent due, even if Petitioner has identified late fees, legal fees, parking fees, bike fees, water fees, pet fees, etc., as being part of "rent," these additional fees cannot form the basis of a summary proceeding in the case at bar where the subject premises are subject to ETPA regulations, and, as such, the Division of Housing and Community Renewal (DHCR) must approve the rent charged. Respondent also moves for Summary Judgment pursuant to RPAPL §741 (3) because the Petition fails to adequately describe the premises, and moves for Summary Judgment since the Petition does not "specify the state, country or government by or under whose laws the party was created" as required for a corporation pursuant to CPLR §3015 (b), and, as such the petition should be dismissed for failure to properly state the facts upon which the proceeding is based pursuant to RPAPL §741 (4).
Procedural History
On January 19, 2017, Bonham Strand, LLC; Petitioner-Landlord, commenced a summary proceeding, presumably pursuant to Article 7 of the Real Property Actions and Proceedings Law, (nowhere in the Petition is this statute cited), by serving a Notice of Petition for non-payment and by serving a Petition upon Respondent-Tenants, Richard Paredes and Leonor Hilda Carvajal (AKA Hilda Carvajal). Petitioner's Notice of Demand, marked on the notice as having been affixed to the door of Respondents, demanded payment of "rent" and "fees" in the amount of $3,092.83. Petitioner then requested a judgment against Respondents in the amount of $2,132.83 and prayed for appropriate relief from this Court. Petitioner has not clarified this discrepancy. Further, during the pendency of this action, the amounts Petitioner has claimed as owing have ranged from a little over $2,000.00 to amounts in excess of $16,000.00. Petitioner, appearing pro se, has made no attempt to amend the Petition during the pendency of this action, although updated, unsigned, and unsworn ledgers were offered to the Court throughout.
The Petition claims as due "rent/fees," as follows: December 2016 rent for $306.83; January 2017 rent for $1620.00; January pet fee for $15.00; January 2017 late fee for $81.00; and January parking fees for $110.00. The Petition also claims a lease rule violation under paragraph 7 of the lease for "alternation [sic], painted and altered fixtures without landlord's written approval." The Petition makes no mention of bike or water fees and there are no facts alleged in the Petition as to what Respondents did to violate the lease rule violation under paragraph 7 of the lease. Further, Petitioner claims that "Respondents hold over and continue in possession of the premises without landlord's permission after said default."
The Petition was calendared for January 26, 2017, on which date Respondent appeared pro se and paid Petitioner $776.00, without prejudice to any defenses. Respondent had previously paid Petitioner $1,050.00 for January's rent and for "other" charges and fees. On January 26, 2017, Petitioner submitted a ledger dated from April 14, 2016 to January 13, 2017, (unmarked and undated), which the Court now marks as Court Exhibit 1 (C EX1). C EX1 indicates a balance due as of January 13, 2017, in the amount of $1,832.83, which is $300.00 less than the amount claimed in the Notice of Petition and Petition, and $1,260.00 less than the amount in the Demand Notice. The Demand Notice was never mailed to Respondents and Petitioner's lease and riders indicate that upon any alleged default, Landlord is not required to serve any Demand Notice.
It is undisputed between the parties that the monthly base rent is $1,620.00. Petitioner's own ledger (C EX1) shows that $1,745.00 was paid for the month of December 2016. The Court takes notice of the fact that in C EX1, Petitioner estimates the water fee for December to be $42.15, which estimate is included in Petitioner's running balance. Additionally, C EX1 also shows an amount due and owing for "bike parking rental fees" in the amount of $400.00, dating back 20 months, commencing on April 1, 2105 up until November 30, 2016, at $20.00 per month. Petitioner inserts this "fee" in his ledger as a one-time charge, and offers no sworn allegations as to why or on what basis these bike fees were included, commenced or ended. Bike fees are not included in the lease or the riders. On January 26, 2017, the matter was adjourned for March 2, 2017.
On March 2, 2017, Respondent again appeared in court and paid Petitioner $600.00, without prejudice to any defenses. Only days earlier, however, on February 28, 2017, the Court was informed that Respondent had obtained legal counsel, through a notice of appearance duly filed with the Court by her attorney; Christopher Schweitzer of Legal Services of the Hudson Valley, at which time he requested an adjournment, due to a scheduling conflict, until later in the month of March. The matter was adjourned until March 30, 2017, when Respondent could appear with counsel.
On March 30, 2017, Petitioner submitted to the Court a new ledger dated from April 4, 2016 to March 30, 2017, (unmarked, unsworn, and undated), which the Court now marks as Court Exhibit 2 (C EX2). As represented by Respondent in court, and confirmed by C EX2, Respondent paid $1,826.00 to Petitioner in February 2017, which constitutes $210.00 over the base rent of $1620.00. Petitioner's ledger (C EX2) indicates that Respondent paid Petitioner $1,600.00 in March. Further C EX2 indicates that the previously estimated "water fee" of $42.15 in C EX1 was, in fact, $35.07.
C EX1 and C EX2 indicate continuing charges and balances for "parking fees," to be discussed more fully below. C EX2 also has an additional "late fee" charge, (pursuant to Rider 1 of the lease), of $15.00 per day for 245 days beginning August 1, 2017, up until March 30, 2017, totaling $3,575.00. This additional "late fee" is above and beyond the 5% or $81.00 late fee on any continuing balance - whether rent, fees, fines, or damages - according to Petitioner's ledgers (CE1 and C EX2).
On March 30, 2017, this case was adjourned for Respondent to file a Summary Judgment Motion, Petitioner's Response, Respondents' Reply, and the Court's Decision.
On April 20, 2017, the instant Motion for Summary Judgment was filed.
On April 25, 2017, a "Motion to Dismiss Motion to Adjourn Trial," unsupported by any sworn allegations of fact, was filed by Petitioner. No signature appears on this document.
On May 9, 2017, a "MOTION TO REINSTATE PETITION TO RECOVER POSESSION [sic] OF REAL PROPERY [sic] NON-PAYMENT," unsupported by any sworn allegations of fact, was filed by Petitioner. The purported motion is signed by an individual whose name is illegible and no typed name appears beneath the signature. This Court is unable to decipher who signed the document, although it appears to bear the name Dickon Tong, in handwriting completely different from the signature of Dickon Tong on the sworn Petition.
Three days later, on May 12, 2017, Petitioner files a motion which reads as follows: "MOTION TO REINSTATE PETITION TO RECOVER POSESSION [sic] OF REAL PROPERY [sic] NON-PAYMENT and lease rule violation And Dismiss Notice of motion [sic] for Summary Judgment." This motion is again unsupported by any sworn allegations of fact, was filed by Petitioner with what appears to be the name written "Dickon Tong, Agent of Bonham Strand LLC," again in a different handwriting than that which appears as the signature of Dickon Tong on the original Petition.
On June 8, 2017, Respondents filed an Affirmation in Reply.
On July 13, 2017, a pre-trial conference was held to bring this Court up-to-date, since the matter was transferred from Judge Walter Rivera; now a Court of Claims Judge, to the undersigned. Brief oral arguments were entertained on the Summary Judgment Motion. Petitioner also submitted to the Court a new ledger of what Petitioner claimed was due and owing as of that date in the amount of $9,949.58. The Court ordered Respondents to update the Court on amounts paid by Respondents to date, (July 13, 2017), and ordered that said submission was to be filed with the Court by July 21, 2017. Petitioner requested an opportunity to submit the entire lease, as he alleged that it previously may not have been a part of the Court record, and the Court granted him the opportunity to do so by the same return date of July 21, 2017.
Further, in court, Petitioner alleged that on May 2, 2017, he submitted a renewal lease to Respondents to sign, as the current lease was set to expire on August 31, 2017. Since the renewal lease as of July 13th remained unsigned, Petitioner warned Respondents in a letter that another eviction process would commence. It was brought to the Court's attention, however, that written into the new lease, was a requirement that Respondents had to pay all outstanding fees, rent, added rent, and fines; as claimed by Petitioner, before a new lease would be accepted by Petitioner. Respondents were unwilling to sign such a lease until there was a decision from the Court as to what rent and/or fees were due and owing the Petitioner. Respondents' counsel pointed out that Respondent is entitled to a new one- or two-year lease renewal since the apartment is rent-stabilized.
Additionally, during the pre-trial conference, Petitioner claimed for the first time during the pendency of this action that "our building is not under DHCR." Petitioner claimed that he "accidentally" applied to DHCR and "didn't get a chance to pull out." Respondent claimed that in the Summary Judgment Motion previously submitted to the Court, the DHCR history shows that the building has been registered since the early 1980's.
The Court indicated that it was the Petitioner's responsibility to present the tenant with a lawful lease, and until such has been presented, the time period within which Respondents must sign a lease would be tolled.
On July 20, 2017, Respondents filed updates to the exhibits attached to the Motion for Summary Judgment. In Respondents' update, Respondents also included a DHCR Rent Overcharge Complaint and Harassment Complaint filed by Respondent, which was finally docketed by DHCR in July of 2017. Petitioner responded to the Complaint and made reference to past actions that he brought against the Respondent-Tenants within the Town of Greenburgh. While this Court will not consider the truthfulness of the statements made by Petitioner in his DHCR Harassment response as it applies to past actions brought before this court, (Docket No.'s 15110137, 16040509, 16080108 and 160900360), this Court notes that Petitioner never alleged in his response that he is not subject to rent-stabilization guidelines. Stated in the affirmative, Petitioner's response to the Harassment claim is a virtual admission that both ETPA regulations and DHCR are controlling as it applies to the building in the instant action, even though Petitioner claimed during the July 13, 2017 oral arguments before this Court that the building was not subject to ETPA regulations or DHCR procedures since the building was "built" in 1981.
On July 21, 2017, Petitioner filed an "Affirmation IN SUPPORT OF MOTION TO DISMISS REPSONDENT'S [sic] MOTION, Grant Judgment and Warrant to Petitioner." The signature on the submission is indecipherable and is different from all that have come before this Court. Petitioner's self-titled "AFFIRMATION" is unsworn. This Court takes no notice of the unsworn allegations within Petitioner's moving papers or updates, but notes that Petitioner, herein, again attempts to allege that the apartment is not subject to EPTA guidelines, as "it was built in 1981."
On July 28, 2017, after the July 21, 2107 deadline ordered by the Court, Petitioner submits a new unsigned, untimely, unaffirmed, and untitled submission to the court wherein Petitioner claims that according to his newest calculation, Respondents now owe $11,044.58.
On August 10, 2017, Petitioner files yet another "AFFIRMATION IN SUPPORT OF MOTION TO DISMISS REPSONDENT'S [sic] MOTION, Grant Judgment and Warrant to Petitioner." This document, as well, is untimely and unaffirmed with an unrecognizable signature. Regardless, although not minimizing the above, according to Petitioner, Respondents now owe $11,275.58 in outstanding "rent" and fees. In addition, Petitioner claims that the lease violation damages, now including two new lease rule violations, are estimated to be $5,000.00 with no facts supporting any allegation, and increases the total amount Petitioner is seeking to $16,275.58. No application to amend Petition has ever been provided to this Court.
While awaiting a decision on the Summary Judgment Motion, on September 1, 2017, Petitioner filed an action with the Court, (Docket # 17090015), entitled "PETITION TO RECOVER POSSESSION OF REAL PROPERTY HOLD OVER [sic]." The basis for this action is that Respondents were living in said premises without a lease since the existing lease expired one day earlier on August 31, 2017. (See Supra at 6) This holdover proceeding was calendared for September 7, 2017, at which time Petitioner submitted a ledger to the Court claiming Respondents owed $18,306.58. On that date, the case was dismissed by Town of Greenburgh Justice Delores Scott Brathwaite for failure to serve a lawful predicate notice.
The Court record on the holdover proceeding is bereft of any indication that Judge Brathwaite was informed that the failure to sign the renewal was premised on the fact that Petitioner had written into the renewal lease a mandate for Respondents to pay any and all sums that Petitioner decided, on his own, were due, owing, and the subject of the instant summary proceeding in the same court, albeit before a different Justice. Moreover, by filing such holdover proceeding, Petitioner went against the explicit instructions of the undersigned; from the July 13, 2017 pre-trial conference, when Petitioner was instructed by this Court not to include the amounts subject to dispute in the instant summary proceeding as part of a condition precedent for Respondents to renew their lease. Clearly, Petitioner thought little, if anything, of this Court's directive to submit a new lawful lease to Respondents and until such was done, the time period within which Respondents had to sign a renewal lease would be tolled. Putting aside the applicable case law, why wouldn't any landlord of a rent-stabilized apartment who has a Landlord-Tenant dispute, merely wait for the time to renew and then require that the tenant pay all fees the landlord believes he is entitled to as a condition precedent to obtaining a renewal, in the hopes that the tenant might decide not renew their lease, regardless of the legitimacy of their defense(s), or their rights to a renewal under rent stabilization laws, thereby obviating the need for a Judge to determine the legitimacy of landlord's claims? It is clear that Petitioner was trying to circumvent the Court's direction and manipulate the legal system to further his own self-interest.
On September 22, 2017, Petitioner filed a new holdover action, (Docket # 17090685), after ostensibly curing any Predicate Demand deficiencies. In this action, Petitioner was represented by counsel; Glen Malia, Esq., and, of note, in counsel's affirmation, he states: "Upon information and belief, the premises herein are covered by ETPA as they are located in an eight (8) unit building in the Village of Dobbs Ferry, and Petitioner has complied with all Federal, State and local laws, rules and regulations applicable to the lease and premises herein" (emphasis added).
On September 27, 2017, Respondents' counsel submitted to the Court a letter indicating that that there is a pending summary proceeding before Judge Orden and that the Judge "instructed Ms. Carvajal not to sign the lease renewal until receiving the decision in the previous case." Respondents' counsel requested that the instant holdover action be adjourned to Judge Orden's calendar. On September 28th, 2016, the newest holdover action was heard before Judge Brathwaite and adjourned to November 9, 2017, so that this matter would be heard before Judge Orden.
This Court has reviewed the entire Court file, including all of the documents referred to above and below. This Court will take all submissions that were submitted in a timely fashion, under consideration; however, the Court cannot give credibility to allegations contained in the unsworn submissions proffered by Petitioner except when appropriate exceptions to hearsay, such as an admission are present. Although appearing pro se, Petitioner-Landlord is held by law to the same standard as any litigant appearing with counsel, particularly as it applies to evidentiary matters. Pro se litigants are held to the same standard of proof as those represented by counsel and proceed at their own peril (see Tanenbaum Assoc., L.L.P. v. Yudenfreund, 13 Misc 3d 138 (A) [2d Dept 2006]).
Findings of Fact and Conclusions of Law on Summary Judgment Motion
This Court finds that the movant-Respondents herein, have submitted sufficient credible evidence, in the form of copies of money order receipts, etc., to prove that "rent," (discussed more fully infra at 19-20) has been paid in full to Petitioner as of July 13, 2017. Petitioner's ledgers demonstrate receipt of the rent. Moreover, this Court has not received any sworn allegations of fact or proof in admissible form from Petitioner in opposition to Respondents' Summary Judgment Motion. As a result, Petitioner has failed to raise a triable issue of fact with respect to rent paid by Respondents to Petitioner.
The law on granting a Summary Judgment motion is fairly well-settled:
"Summary judgment requires the proponent to make "a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact . " (Alvarez v. Prospect Hospital, 68 NY2d 320, 324, 508 N.Y.S.2d 923, 925 [1986]; CPLR § 3212[b].) The burden then shifts to the opponent to "show facts sufficient to require a trial of any issue of fact." (CPLR § 3212[b].) Should the opponent fail to produce proof in admissible form to raise triable issues of fact , the court must then grant summary judgment to the movant.(Alvarez, 68 NY2d at 324; Zuckerman v. City of New York, 49 NY2d 557, 560 [1980].) Although a drastic remedy, (Andre v. Pomeroy, 35 NY2d 361, 364, 320 N.E.2d 853, 362 N.Y.S.2d 131 [1974]), the court may award summary judgment on any defense where the movant establishes entitlement to judgment as a matter of law. (CPLR § 3212[b].) Thus, summary judgment may be awarded on a laches defense. (Vigilance v. Bascombe, NYLJ, May 25, 1989, at 30, col. 1 [App Term 2d & 11th Jud Dists]; Marriott v. Shaw, 151 Misc 2d 938, 940, 574 N.Y.S.2d 477 [Civ Ct Kings Co 1991]; Rodriguez v. Torres, NYLJ, January 22, 2003, at 22, col. 1 [Civ Ct Kings Co]; 446 Ocean, LLC v. Marcel, NYLJ, January 9, 2002, at 22, col. 1 [Civ Ct Kings Co]; Harlem Restoration Project v. Alexander, NYLJ, July 5, 1995, at 27, col.2 [Civ Ct NY Co]; and Jerweb Realty Co. v. Smith, NYLJ, June 30, 1993, at 25, col. 5 [Civ Ct Kings Co].)"(A & E Tiebout Realty v. Johnson, 23 Misc 3d 1112(A) [2009] [emphasis added]).
I. Defenses Asserted
A. Emergency Tenants Protection Act / Waiver of Rights
Respondents claim that Summary Judgment should be granted for the following reason: "Respondents have not waived their rights under the Rent Stabilization Code, even if respondents signed a lease that expressly waived their rights under the Emergency Tenants Protection Act (ETPA)."
Petitioner claims that Respondent-Tenants waived their rights under ETPA in the Riders that they signed with Landlord.
As noted by Respondents in the Summary Judgment Motion, Petitioner's building is registered as a rent-stabilized building under Building ID # 651964 and is on-file with DHCR (Respondents' Exhibit A). There is a caveat in the DHCR document provided, which reads in relevant part, that this document "merely reflects the statements made by the owner in the registration(s) filed by such owner . . .. DHCR does not attest to the truthfulness of the owner's statements or the legality of the rents reported in this document." The last listed "Legal Regulated Rent" is in the amount of $1608.00, which appears to reflect a base rent lower than the rent currently being charged to Respondents.
In Respondents' Exhibit B of said motion, there is a two-page lease agreement. However, and of note, next to the term "Rider" at the top of the lease agreement, it reads: "Additional terms on ______ page(s) initialed at the end by the parties is attached and made a part of this Lease." The lease leaves this "Rider"/"Additional terms" portion blank, leading this Court to question whether DHCR was ever apprised of any additional Riders and if any Riders were ever made a part of the initial lease as submitted to DHCR. Respondents' Exhibit B also includes undated, yet signed documents entitled "Rider 1" and "Rider 2."
Under paragraph 40 of Rider 1 it reads: "If any of the provisions of this Rider conflict with the provisions of Lease Agreement, this Rider shall govern and control." Paragraph 41 states: "The tenant expressly waives and agrees not to assert in any dispute with the Landlord, all rights, if any, of the Tenant under the Emergency Tenants Protection Act, the regulations promulgated thereunder, the Rent Stabilization Law, the regulations promulgated thereunder, and any other rights, if any, to a renewal lease as promulgated by any State, County, City, local or municipal, statute, regulation, rule of ordinance" (emphasis added).
Section 11 of the ETPA states that a waiver of such rights is contrary to public policy and accordingly, void. Additionally, 9 NYCRR §2520.13 states that "an agreement by the tenant to waive the benefit of any provision of the Rent Stabilization Law or this Code is void" (see Estro Chemical Co. v. Falk 303 NY 83 [1951], Riverside Syndicate, Inc. v. Monroe, 10 NY3d 18, 882 N.E. 2d 875 [2008], Drucker v. Mauro, 30 AD3d 37 [2006]).
While the Court cannot state with certainty whether DHCR had within its file copies of the two Riders, it defies logic to assume that DHCR would approve Riders that mandate that tenants give up all rights and benefits conferred upon them pursuant to ETPA, when the ETPA itself has ruled that such a waiver is against public policy and void.
The Court rules that Paragraphs 40 and 41 of Rider 1 are null and void as against public policy and represent an attempt to circumvent the laws, rules, and regulations as referred to above.
B. Water Fees
Respondents claim that the Motion for Summary Judgment should be granted because Respondents cannot be charged for water usage as such would be violative of 9 NYCRR §2520.6 (r) (1). Pursuant to 9 NYCRR § 2520.6(r) (1), a landlord in a rent-stabilized building must pay and provide the
". . . space and those services which the owner was maintaining or was required to maintain on the applicable base dates set forth below, and any additional space or services provided or required to be provided thereafter by applicable law. These may include, but are not limited to, the following: repairs, decorating and maintenance, the furnishing of light, heat, hot and cold water, elevator services, janitorial services and removal of refuse."
The applicable base date in the instant case is June 30, 1974 pursuant to 9 NYCRR §2520.6(r)(4)(i), and the landlord must provide and pay for water if it was an included service on or prior to June 30, 1974. In light of the failure by Petitioner to provide any evidence that water was not included as an essential service to Respondents' apartment on or before June 30, 1974, this Court, based upon the evidence provided by Respondents, must infer that such water service was provided and finds that water charges cannot be charged by Petitioner in addition to the base rent.
In addition, this Court notes that the lease under Paragraph 6, entitled "Services," reads, in pertinent part: "Landlord will supply; (a) heat as required by law, (b) hot and cold water for bathroom and kitchen sink . . ." (emphasis added). By contrast, Rider 1, paragraph 46 reads as follows: "Tenant will be responsible for the payment of all utilities including and not limited to gas heat, Water (divided by 7.5 of water bill, payable semi-annually), cable and electricity." As noted supra, Petitioner has been billing Respondent-Tenants on a monthly basis for water and his submitted ledgers include estimatedamounts. Petitioner has failed to provide any proof of what the water bills actually were or proof that it has been paid. Further, during the July 13, 2017 brief oral argument on the Summary Judgment Motion, Respondent Hilda Carvajal, herself, indicated that despite repeated requests of Petitioner to produce the water bill, Petitioner has never done so and represented that she is being charged 8.5% of the water bill, not 7.5%. Based on the facts as presented and the applicable law, this Court finds that Rider 1, paragraph 46, violates 9 NYCRR § 2520.6 (r)(1) and is unenforceable.
Should Petitioner get an affirmative declaration from DHCR that he is legally permitted to charge Respondents for water, such changes to the lease must be approved by DHCR. Until that time, and based upon the above, Petitioner is prohibited from charging Respondents for water.
C. Late Fees
Respondents claim that the Motion for Summary Judgment should be granted because the late fee clause in Rider 1, paragraph 47 is unenforceable and penal in nature pursuant to RPAPL §235-c.
Rider 1, paragraph 42, states that "If rent is not paid after three (3) days (1st of the month), it is in default." Rider 1, paragraph 47 states, in pertinent part, "There will be a 5% late charge if rent is paid six (6) days after due date of each month. And a $15 late charge will be added for each additional day after 30 days [sic] late until rent is paid in full."
Case law, throughout the State of New York, makes it clear that the late fee clause in Rider 1 is void as unconscionable.
"This late fee is excessive and grossly disproportionate to the amount of damages, if any. The monthly rent under this lease is $ 405. If the tenant must pay $ 50 on the 11th day of the month, this would amount to an annual interest rate of about 450%! The landlord of course incurs no damage of such magnitude and the fee is therefore disproportionate. The late fee cannot be considered a reasonable means of insuring prompt payments. The landlord already has legal recourse through summary proceeding for nonpayment of rent when due. The court holds that this fee is to be considered liquidated damages and a penalty which cannot stand" ( Spring Valley Gardens Associates v. Earle, 112 Misc 2d 786, 787 [1982]) (internal citations omitted).
"The charge, while not technically interest, is at the rate of 60% a year. Examined in the light of the public policy expressed in section 190.40 of the Penal Law, which makes an interest charge of more than 25% a criminal offense, we find the charge unreasonable and
confiscatory in nature and therefore unenforceable" (943 Lexington Avenue, Inc. v. Niarchos, 83 Misc 2d 803, 373 N.Y.S.2d 787 [App Term, 1st Dept 1975]) (internal citations omitted).
"Notwithstanding Petitioner's claim that the Respondent is contractually obligated to pay the late fees, and the lease states that such sums are due, "without notice or demand and without abatement, deduction or set-off", this Court, pursuant to the above case authority and RPAPL 235-c, finds that the late fee claims, under these particular facts, are unreasonable, are intended as a penalty and therefore, unenforceable. Moreover, the Petitioner's assessment of late fees with interest are "unreasonable and confiscatory in nature" ( Brenner v General Plumbing Corp., 46 Misc 3d 1215(A) [2015]) (internal citations omitted).
The fact that Respondents signed a Rider with unconscionable late fees is to no avail. As the Court noted in Seabrook v. Commuter Housing Co., 72 Misc 2d 6, 8; 338 N.Y.S. 2d aff'd 363 N.Y.S. 2d 566 (1972), a "lessee that has no choice but to sign an unconscionable lease agreement must be protected against the bad bargain he enters into" because "[l]aissez faire has no place in our enlightened society where the lessor and lessee do not deal on equal terms."
In Ramana Realty Corp. v. Louis Rotondi Restaurant Corp., NYLJ, Jan. 19, 1991 at col 3 [1st Dept, NY County], a late charge of 4% per month, amounting to 49% per year, was clearly disproportionate to any probable loss and the Court found that provision unenforceable. In Parkchester Apartments Co v. Lewis, NYLJ, Apr. 22, 1998 (1st Dept, Bronx Co), 5% was struck down as unreasonable, excessive and unenforceable.
In the case at bar, Respondents are charged 5% late fees if they are six days late for any portion of rent, additional rent, fees, or fines. Yet, in addition to the 5%, Respondents are also charged $15.00 per day after thirty days, ad infinitum, if any part of rent, additional rent, fees, damages, or fines remain unpaid, bringing the additional late fees above the 5% to potentially incalculable numbers.
This Court finds that not only is the 5% late fee charged by Petitioner in Rider 1, unconscionable, excessive, punitive in nature, and grossly disproportionate to any loss suffered by Petitioner, but Petitioner's additional late fees on top of the 5%, bring the late fees charged beyond the realm of rationality.
RPAPL§ 235-c states that a court may find a lease or clause unconscionable at the time it was made as a matter of law. If a court does find a clause unconscionable, it may refuse to enforce the lease, it may enforce the remainder of the lease without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.
Further, in Knudsen v. Lax, 17 Misc 3d 350 [2007], the Court wrote that:
"[T]here exists in every contract certain implied-by-law covenants, such as the promise to act with good faith," and, "[i]n a , similar vein, the law has developed the concept of unconscionability so as to prevent unjust enforcement of onerous contractual terms of which one party is able to impose [on] the other because of a significant disparity in bargaining power (e.g., Uniform Commercial Code, § 2-302)."
In Williams v. Walker-Thomas Furniture Co., 350 F.2d 445, 449 [1965], the Court ruled similarly:
"Ordinarily, one who signs an agreement without full knowledge of its terms might be held to assume the risk that he has entered a one-sided bargain. But when a party of
little bargaining power, and hence little real choice, signs a commercially unreasonable contract with little or no knowledge of its terms, it is hardly likely that his consent, or even an objective manifestation of his consent, was ever given to all the terms. In such a case the usual rule that the terms of the agreement are not to be questioned should be abandoned and the court should consider whether the terms of the contract are so unfair that enforcement should be withheld." Id. at 449-450.
Unconscionability, particularly pertinent in the instant case, was also addressed by the Williams Court:
"Unconscionability has generally been recognized to include an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party. Whether a meaningful choice is present in a particular case can only be determined by consideration of all the circumstances surrounding the transaction. In many cases the meaningfulness of the choice is negated by a gross inequality of bargaining power."Id. at 449.
Nowhere in the Petition does it recite the fact that the apartment is registered with the DHCR and is subject to Rent Stabilization Laws. Unlike the City of New York which requires such a recitation, there is normally no such mandate in Westchester County. However, in this case, the Court finds that Petitioner attempted to mislead the Court and Respondents in order to improperly collect as "rent" that which were improperly designated as additional fees in contravention of both the ETPA and DHCR rules and regulations.
The Court points to the July 21, 2017 submission by Petitioner that "ETPA Regulation was formed to stabilize rents for apartments built prior to 1974. This apartment was built in 1981 . . .." This allegation by Petitioner contrasts with his statement regarding a renovation and conversion of the apartment in 1981, in his unsworn motion of May 9, 2017, as well as the oral arguments made to the Court on July 13, 2017. Yet, as noted supra at 8-9, Petitioner concedes in his response to the Harassment Claim filed by Respondents before DHCR that ETPA regulations and the jurisdiction of DHCR are controlling and Petitioner's newly retained lawyer in the holdover action indicates "the subject premises are subject to rent-stabilization guidelines."
The attempts by Petitioner to ignore restrictions and/or requirements set forth in leases on apartments regulated by the DHCR cannot stand.
". . . deliberate misrepresentation of the rent-stabilized status of a leasehold subjects a petition to strict construction as a matter of equity, subjecting the summary proceeding to dismissal" (546 W. 156th St. HDFC v. Smalls, 43 AD3d 7, 11 [2007] (internal citations omitted).
The Court sees no difference in deliberate misrepresentations or deliberate material omissions in a Petition and subsequent misrepresentations to mislead this Court. Based on Petitioner's deliberate attempts to mislead the Court with respect to whether the subject premises were subject to rent-stabilization laws, the lack of any evidence that Riders 1 and 2 were ever approved by ETPA, and the fact that Rider 1 charged Respondent-Tenants grossly unconscionable late fees, the Court, in its discretion, finds Rider 1, paragraphs 40, 41, 42, 46 and 47 unconscionable and/or illegal on its face and as such, void and unenforceable.
D. Parking Fees
Petitioner's unsworn ledgers and running balances indicate parking fees for three vehicles, which agreement is contained within a separate parking contract, a point repeatedly emphasized by Petitioner. Rider 1 makes reference to a separate contract for parking. Rider 2, paragraph 49 refers to the parking fees, as contained within a separate contract as "additional rental fees." The Court notes that Petitioner has repeatedly submitted ledgers to the Court which allegedly charge Respondents for three cars throughout their tenancy. However, based upon two separate emails that Petitioner sent to Respondents, dated January 26, 2017 and March 30, 2017, regarding his demand to increase "parking fees" per car, Petitioner acknowledges in both emails that Respondents have two (2) cars. (It should be noted that in Petitioner's last e-mail, Petitioner refers to the "signed parking contract" as " separate from lease agreement " (emphasis added). [See Exhibit D of Petitioner's unsworn "AFFIRMATION IN SUPPORT OF MOTION to dismiss respondent's Motion Grant Judgement and Warrant to petitioner," [sic] dated July 20, 2017]. Of significance to this Court is the fact that contained in these e-mails, when Petitioner totals the amounts that Respondents must pay for parking, given the new increases, the amount due is below the amounts he claims as due on the ledgers he submitted to this Court. Taken in a light most favorable to Petitioner, Petitioner's submissions to the Court are, at a minimum, a clear misrepresentation of the facts about monies allegedly due and owing.
Although hardly insignificant, regardless of the above, since the parking contract itself is not part of the lease or the Riders, (mere mention is made so that Petitioner can attempt to categorize the fees as additional rent), it is not rent and therefore cannot be the basis for a non-payment proceeding (See Silverset Properties Prisco, 142 Misc 2d 849 [1988]). Rider 2 paragraph 49 that refers to an additional rental fee for vehicles as an "additional rental fee," is stricken from the Rider as void and unenforceable in a summary proceeding.
E. Pet "Fees"/Fines
Rider 2, paragraph 50, indicates that "pets are allowed only with additional fee and a separate rider/contract (may required [sic] additional deposits). Pet found without a contract will be fined $40*12 month/pet" (emphasis added). This Court was not presented with any separate rider or contract with regards to pet fees, only a ledger that includes fines. Fines are not rent and therefore cannot be the basis for a non-payment proceeding. Silverset, 142 Misc 2d 849.
F. Bike "Fees"
Petitioner has failed to allege where in the lease or any Rider there is a provision for bike fees. Petitioner has only submitted what appears to be a letter to Respondent-Tenants as to what Petitioner intends to charge Respondents as rental fees for bicycles. [(See Exhibit D of Petitioner's unsworn "AFFIRMATION IN SUPPORT OF MOTION to dismiss respondent's Motion Grant Judgement and Warrant to petitioner," [sic] dated July 20, 2017)]. This purported letter is not part of the lease or any Rider and, as such, is not properly before this Court during a summary proceeding. (See Silverset, 142 Misc 2d 849) Conclusion
Section 6 of the ETPA states that no landlord shall "charge or collect any rent in excess of the initial legal regulated rent until such time as a different legal regulated rent shall be authorized." The definition of "rent" is critical in the instant action:
"Where an owner acts as a provider of a utility service (including, but not limited to electricity, gas, cable, or telecommunications), the owner may collect surcharges which shall not be part of the legal regulated rent, and shall not be subject to this Code." NY Comp. Codes R. & Regs. tit. 9 § 2522.10. (emphasis added)
(c) Rent. Consideration, charge, fee or other thing of value, including any bonus, benefit or gratuity demanded or received for, or in connection with, the use or occupation of housing accommodations or the transfer of a lease for such housing accommodations.
Rent shall not include surcharges authorized pursuant to section 2522.10 of this Title. NY Comp. Codes R. & Regs. tit. 9, § 2520.6Related Tiffany, L.P. v. Faust, 743 N.Y.S.2d 802, 803-04 (App. Div. 2002) (emphasis added)
The Rent Stabilization Law of 1969 makes it unlawful to charge any "rent" in excess of the legal regulated rent (Administrative Code of City of NY § 26-512 [a]; see also, 9 NYCRR 2525.1). Thus, lease clauses deeming legal and late fees additional rent have been held to be unenforceable against rent stabilized tenants (e.g., 4220 Broadway Assoc. v Perez, 187 Misc 2d 602 [App Term, 1st Dept]; Brusco v Miller, 167 Misc 2d 54 [App Term, 1st Dept]; MacNish Assoc. v Harris, NYLJ, Oct. 20, 1987, at 15, col 4 [App Term, 2d & 11th Jud Dists]). Because the unenforceability is predicated on the proscription of the collection of excess rents, no distinction can be drawn between attorney's fees and late fees on the one hand and utility surcharges on the other (see, Matter of Binghamton Hous. Auth. v Douglas, 217 AD2d 897; cf. Port Chester Hous. Auth. v Turner, 189 Misc 2d 603). The amended Code provision clarifies that collection of utility surcharges is not an improper circumvention of the prohibition against collecting more than the legal regulated rent . However, the amendment does not provide that these surcharges are collectible as "rent." On the contrary, the Code was also amended to expressly state that "rent shall not include surcharges authorized pursuant to section 2522.10 ." (9 NYCRR 2520.6 [c])
Paragraph 3 of the lease refers to the fact that Tenant may be responsible to pay other charges. "They are called added rent." Thus, any reference to surcharges or additional charges on the Riders, according to this paragraph of the lease, is considered by Petitioner as added rent. In accordance with the laws and cases cited, supra, this is unenforceable and all attempts to collect these additional sums of money are an unlawful attempt to collect additional rent beyond what is legally permissible.
In addition, the Court may not award lease rule violation damages in a summary proceeding. Rather, Landlord may pursue damages in a plenary proceeding. (See Chelsea 18 Partners, LP v Mak, A.D., 3d, 38, 933 N.Y.S 2d 204 [App. Div. 1st Dept 2011]). In addition, the Court did not see a reference to legal fees in the lease or riders provided, and hence, no attorney's fees will be provided to the prevailing party, without further application and justification in the law.
Petitioner has failed to prove that any claims for late fees, water fees, lease rule violation damages, legal fees, bike fees, parking fees, and pet fines have been approved by the DHCR as part of the legally collected rent.
" So long as the tenant continues to pay the rent to which the landlord is entitled, no tenant shall be removed from any housing accommodations by action to evict or to recover possession, by exclusion from possession, or otherwise, nor shall any person attempt such removal or exclusion from possession,except on one or more of the grounds specified in this Chapter ." (9 NYCRR § 2504.1) (emphasis added)
Petitioner has failed to present any proof, affidavits, or affirmations sufficient to rebut Respondents' sworn claims and submitted proof that the legally regulated rent has been paid in full. As a result, there are no triable issues of fact and Respondents' Motion for Summary Judgment is granted.
Based on this Court's ruling, the Court need not address Respondents other claims; to wit, that Summary Judgment should be granted because the Petition fails to adequately describe the premises, and does not "specify the state, country or government by or under whose laws the party was created as required for a corporation pursuant to CPLR §3015 (b), and that Petition should be dismissed for failure to state the facts upon which the proceeding is based pursuant to RPAPL §741 (4)." FOR THE REASONS STATED ABOVE THE MOTION FOR SUMMARY JUDGMENT IS GRANTED AND THE PETITION IS DISMISSED WITH PREJUDICE.
The Court ORDERS:
1. Petitioner to submit to Respondents and Respondents' counsel a new one- or two-year renewal lease, with lawful riders, in accordance with this decision;
2. That said renewal lease and riders comply with all rights that Respondents are entitled to pursuant to the Emergency Tenants Protection Act, the regulations promulgated thereunder, the Rent Stabilization Law, the regulations promulgated thereunder, and any other rights to a lease or renewal lease promulgated by State, County, local or municipal statute, regulation, rule or ordinance;
3. That said renewal lease and riders be submitted to Respondents and Respondents' Counsel on or before November 9, 2017.
SO ORDERED, Dated:November 1, 2017 HON. BONNIE L. ORDEN J.J.C.