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Landlord-Tenant—Summary Holdover Proceeding—Apartment Was Not Subject To Rent-Stabilization—Tenant’s Use Of Commercial Space Did Not Make the Space a “Lawful Housing Accommodation”

New York Law Journal

September 16, 2015

By Scott E. Mollen


 

A landlord had commenced a summary holdover proceeding, claiming that the subject tenancy was unregulated and had been terminated by a 30-day notice. The tenant countered that “there were, in the recent past, six apartments in the subject building, and that she is therefore a rent stabilized tenant entitled to a renewal lease.”

The court explained:

In order to be subject to rent stabilization, an apartment must, among other things, be located in a building with six or more “housing accommodations” on the date when the building becomes subject to regulation or at any time thereafter…. A “housing accommodation” is defined by the Rent Stabilization Code as “that part of any building or structure occupied or intended to be occupied by one or more individuals as a residence, home, dwelling unit or apartment.”

The building had become subject to regulation in 1974 pursuant to the Emergency Tenant Protection Act (ETPA). The parties agreed that at that time and thereafter, the second and third floors of the building contained two apartments on each floor. “At present, and since the early 2000’s, the first floor has contained two commercial premises and no residential units.”

At trial, the tenants introduced “I-cards for the…building.” Those records established that “the building had six residential units when it was built, sometime before 1938.” The I-cards also showed that “the building had a residential unit behind each commercial space on the first floor, for a total of six units.” However, a Rent Control MBR document from 1973, just prior to the enactment of the ETPA, showed that “at that point there were a total of five residential units, the four on the upper floors and one behind that left commercial space.” A contract of sale (contract) for the building in 1970 also identified five residential units, “four on the upper two floors and one behind the store on the left hand side.” The witness testimony was “consistent with both the MBR document and the contract of sale.”

A tenant testified that there was a separate residential apartment on the left side of the first floor, behind the commercial space until about 2000. The court assumed that that was the fifth unit referred to in the MBR document and the contract. Thus, the salient issue concerned “the use of the space in the right rear of the first floor.”

The tenant testified that the commercial space on the right side of the building had been occupied by a dress shop until the early 2000’s. The tenant and another long-time tenant testified that the front room on the right side contained merchandise and displays relating to the dress shop. There was also “a middle room set up like a living room with a sofa, coffee table and television.” A long-time tenant testified that some merchandise had also been stored in that middle room and customers tried things on in that area as well. The middle room was separated from the front room by “an opening in the wall with a curtain across it. There was no door.” There was a third room in the back of the right side which contained “a table and chairs, a shower stall and a stove.” The back room was separated from the middle room “by an opening in the wall without any door.” There was no evidence that either the stove or the shower were connected or functional during the relevant time period. There was no bathroom in the right hand space. There was a bathroom off the first floor public hallway.”

The tenant presented “persuasive circumstantial evidence” that the dress store operator “ate and slept regularly in the space behind her store.” Moreover, “[s]he gave the address of the store as her address on her voter registration and other official documents.” The court explained that such facts did not mean that the “rear space was a separate sixth housing accommodation.” There was no evidence of a separate rental agreement for the right rear space and, in fact, “it was not even a separate space.” The court noted that “the middle room was used as part of the store and as a place to keep additional merchandise and as a changing room. There was no evidence of gas or water connections to the rear area” and there was “no evidence that the landlord knew that [the dress store owner] lived there.”

The court thus found that the right part of the first floor was “a single commercial space whose proprietor slept behind the store,” there was “no housing accommodation, as that term is defined by the Code, on the first floor right, and that the building is accordingly not rent stabilized.” The court granted a final judgment in favor of the landlord for possession.

Comment: The tenant’s attorneys, noted, inter alia, that the landlord was attempting to evict tenants who had lived in the building for 20 years. They asserted that there was no evidence that the dress shop owner resided at any address other than the subject address and photographs had depicted a residential area, not a “changing area or storage location.” They claimed that the middle room appeared to be a “living room with what may be a pull out couch” and the rear room of the “apartment” is a kitchen with a full set of kitchen appliances, shower, kitchen table with kitchen chairs.

Adam Leitman Bailey, of Adam Leitman Bailey, P.C., attorney for the landlord, asserted that the tenants “provided little evidence regarding the alleged legality of a residential dwelling unit on the ground floor right. The scarce testimony that was provided was inconsistent or contradicted by objective facts.” Bailey further stated, inter alia, that a finding that the building was subject to stabilization would ‘impose a draconian sanction on the current owner of the building, which would affect all of the building units.’”

124 Meserole v. Recko, Civ. Ct., Kings Cnty., Index No. 96170/13, decided June 19, 2015, Schneider, J.

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