Opinion
Index No. CC-60049-20/BX
03-28-2022
Helmsley Corp., Claimant, v. Parkchester South Condominum, Defendant.
Unpublished Opinion
Hon. Jeffrey S. Zellan, J.C.C.
After Trial, the Decision and Order of the Court is as follows: Judgment for claimant in the amount of $1,240.00.
On the eve of trial, defendant made an application to dismiss this action - in which claimant seeks damages resulting from lost rent due to uninhabitable conditions in a residential condominium unit claimant purchased with the intent of renting it to others - for failure to state a claim, premised on the position that a condominium board cannot be held answerable under a warranty of habitability by a non-resident unit owner. However, defendant has not sought to transfer this action pursuant to CCA § 1805(b) out of the small claims part, and courts have noted that "[o]ne of the hallmarks of the New York small claims procedure is the absence of legal niceties of procedure." Weiner v. Tel Aviv Car & Limousine Service, Ltd., 141 Misc.2d 339, 341 (Civ. Ct., New York Co. 1988) (quotations and citations omitted). Rather, "[t]echnical rules only thwart the proper function of small claims courts," and that "[f]or those reasons, motion practice is generally discouraged." Id. " The rule precluding motions is particularly applicable to motions to dismiss for failure to state a cause of action." Id. This is especially true as to motion practice against self-represented litigants such as claimant, which appeared through its president. Williams v. Friedman Mgt. Corp., 11 Misc.3d 139 (A), *1 (App. Term, 1st Dept. 2006) (collecting authorities and reversing dismissal of small claim). Rather, "substantial justice will be best served by a prompt, transcribed trial of plaintiff's claim," and the Court elected to do so here. Id., at *2.
Beyond that procedural hurdle though, defendant's motion also fails substantively, and would be denied on the merits as well. Although the board of a condominium is not held to a warranty of habitability sounding in Real Property Law § 235-b for residential units within a condominium to a condominium owner seeking to rent a unit to others - Frisch v. Bellmarc Mgt., Inc., 190 A.D.2d 383, 384 (1st Dept. 1993) - that is not the end of the question. The owner of a multiple dwelling building - including a condominium building - has a nondelegable duty to maintain common areas and structures in good repair. This specifically includes a building's roof, which the parties do not dispute was the source of the uninhabitable conditions at issue in this action. Multiple Dwelling Law § 78. While defendant relies on Frisch in support of its motion, Frisch has been distinguished on this exact issue in an action involving defendant in the past. Pershad v. Parkchester South Condominium, 174 Misc.2d 92 (Civ. Ct., New York Co. 1997), affd. for reasons stated below, 178 Misc.2d 788 (App. Term, 1st Dept. 1998)(denying motion to dismiss housing part action seeking removal or correction of water leaks resulting in damage to ceilings and walls based upon the Multiple Dwelling Law and Housing Maintenance Code). Condominium boards - which defendant is - have been held as the owner of common building elements for relevant purposes here. See, William Walzer, Should the Warranty of Habitability Apply to Condominiums? Enforcing Owners' Rights Against Delinquent Boards, 38-2 NYRPLJ 16, 17 (2010) (collecting cases, including Pershad). While defendant is correct that there is no viable cause of action in Real Property Law § 235-b, claimant did state a cause of action that could be construed in the Multiple Dwelling Law and the Housing the Maintenance Code. Accordingly, defendant's motion fails.
Turning to the merits, the facts of this claim are uncontested in a number of material respects. In May 2019, claimant purchased a residential unit in a building in defendant's condominium for $125,000.00 with the intent of leasing the unit to a renter as part of claimant's business. At the time of purchase, the unit was not habitable due to extreme moisture conditions caused by a roof leak, and claimant's purchase price was generally lower than the average sale price of similar units in Parkchester South, although nothing in the contract of sale or any other document submitted in evidence indicates that the sale price was lowered as consideration for the uninhabitable condition of the unit. Defendant engaged in a series of remedial measures to make repairs to the unit, some of which were considered temporary measures and, later, some more permanent. Notwithstanding the moisture conditions affecting the unit, claimant sought approval from defendant to lease the unit, beginning on June 1, 2019, to a residential tenant ("Tenant-1"). Defendant approved claimant's lease, with a listed rent of $930 per month, by letter dated May 29, 2019. Tenant-1 was unable to move into the unit on June 1, 2019, as it remained uninhabitable, and, as a result, broke her lease agreement with claimant. Claimant subsequently recruited a new tenant family (collectively, "Tenant-2") to lease the unit beginning September 1, 2019 and submitted a new lease with Tenant-2 for approval, which defendant approved by letter dated August 30, 2019. The unit did not become habitable until September 10th, at which point Tenant-2 moved into the unit and began paying claimant rent.
Defendant offered a chart listing the sale activity and average sale price of similar units within Parkchester South from May 2018 through April 2019. In the month claimant executed the contract of sale for the unit, the average sale price for similar units appears to have been $156,150.00, although claimant testified that he was aware of certain other units selling at a more comparable price at that same time.
Although the parties agree that claimant was required by Parkchester South rules to obtain approval to lease the unit, neither party offered a copy of that or any other rule governing the relationship between Parkchester South, defendant, or defendant's tenants. While claimant offered that it had demanded copies of such materials from defendant for trial, claimant waited until well into the trial to seek relief from the Court, which the Court denied given the lateness of what was essentially a motion to compel compliance with a discovery demand (limitations on discovery in small claims aside) in the middle of a trial.
The parties initially presented two different leases - both executed by claimant and the same tenant - for the unit at issue, but for very different rental amounts: a lease submitted by defendant that listed a monthly rent of $930 per month, and a lease submitted by claimant that listed a monthly rent of $1,711 per month. Both were facially genuine, fully executed, and were materially identical but for the rent amount. When questioned, claimant's representative admitted in testimony that he submitted to defendant only the lease listing a $930 per month rent because the other lease with a higher rent would not be approved by defendant - an apparent requirement for unit owners at Parkchester South - although claimant had intended to collect the higher rent from its tenant. The Court does not accept or acknowledge this other purported lease and is troubled that claimant failed to initially disclose the existence of the approved $930 per month lease.
While many of the material facts are undisputed, the parties differ on a number of other facts. Importantly, although claimant's representative testified that claimant did not inspect the unit prior to closing in May 2019, claimant asserts that he was assured the unit would be ready for occupancy by June 1, 2019 and was then was repeatedly told by defendant's staff that the unit would be ready "soon," but to no avail. Defendant's witness testified that she often had conversations with claimant's representative about the status of repairs to the unit, and admitted that such repairs should have been completed, and the unit ready for occupancy, by August 1, 2019. As to claimant's knowledge about the scale of the unit conditions, defendants note that in the contract of sale for the unit indicates that defendant inspected the unit, which he admittedly did not.
The Court, guided by CCA § 1805(a) "to do substantial justice between the parties," finds that claimant has established a cause of action for lost rent as a result of defendant's actions, established damages from those actions, and that defendant should compensate claimant for those damages. The source of the moisture damage caused by the damaged condition of the building's roof is undisputed, and the Multiple Dwelling Law and Housing Maintenance Code places the liability for that damage upon building owners like defendant. In determining damages for claimant, the Court is guided by the terms of the lease claimant submitted to defendant for approval to rent the unit to Tenant-1 at $930 per month. In approving said lease agreement, defendant was clearly aware of claimant's desire to rent to the unit at issue, and potential income claimant stood to receive from that unit. By the same token, Claimant does not dispute that the unit was uninhabitable when it executed the lease with Tenant-1 and had claimant inspected the unit as it stated it did in the contract of sale, claimant could not reasonably have expected the unit to be ready for occupancy on June 1, 2019. On the other hand, defendant admits that defendant represented to claimant that the unit would be ready for occupancy by August 1, 2019, which defendant acknowledged was a reasonable expectation of completion that ultimately proved inaccurate. Prorating the $930 monthly rent that claimant could have legitimately collected between August 1, 2019 and September 10, 2019 (when the unit became habitable), the Court grants claimant judgment in the amount of $1,240.00.
The Court declines to give any credence to the unapproved shadow lease submitted by claimant in support of its case.
The clerk is directed to enter judgment accordingly.
This constitutes the Decision and Order of the Court.