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Despite Substantial Documentation Showing a NYC Address, Adam Leitman Bailey, P.C. Proves Rent Controlled Tenant’s Primary Residence Is in Puerto Rico and Secures Return of the Apartment for the Landlord

By Adam Leitman Bailey


By Scott E. Mollen 

February 05, 2019

Scott E. Mollen, a partner at Herrick, Feinstein, discusses “245 East 30th Street v. Alarcon,” where a rent-controlled apartment was given back to the landlord after it was found that it was not the tenant’s primary residence.


 

Landlord-Tenant—Rent Control Tenant Was Not Primary Resident—Substantial Documentation Showed NYC Address, But Tenant Failed To Maintain “Ongoing, Substantial, Physical Nexus” for Actual Living Purposes—Medical Care in Puerto Rico Did Not Establish “Medical Necessity” to Remain in Puerto Rico—Tenant Sublet NYC Apartment

A landlord commenced a holdover proceeding against a rent-control tenant. The landlord alleged that the tenant “does not maintain the subject premises (apartment) as her primary residence.” The tenant owned two homes in Puerto Rico, occupancy of one Puerto Rico home was a condition of mortgage, her “income tax returns…showed that [tenant] took home mortgage tax deductions” with respect to the Puerto Rico homes and had sublet the apartment.

The tenant is married. She testified that her husband lives in the apartment. She stated that she had some “personal issues,” a “little spat,” with her husband. The husband allegedly had a job as a super in another building, but did not have to be at that building 24 hours a day. The husband co-owns the Puerto Rico homes with the tenant. She claimed that her husband came to Puerto Rico “many times between 2013 and 2015.”

The tenant acknowledged that she had “some kind” of a personal relationship with a woman. The court referred to her as the tenant’s paramour. The paramour was given keys to the apartment and stayed at the apartment in 2013 or 2014. The tenant denied that the paramour sublet the apartment. However, she had testified in deposition that the paramour gave the tenant $500 a month “for a time including when respondent was not in the subject premises.”

The tenant also claimed that she took “psychiatric medications.” The tenant had allegedly bought the first Puerto Rico home so that she could “get some space” from her husband. She claimed that the paramour gave her “money sometimes as a casual gift” and her relationship with the paramour caused her “anxiety and shame about her sexual orientation….” She had allegedly gone to Puerto Rico “to think about things” and had become unhappy when she learned that in Puerto Rico, “English is not spoken there.” The tenant produced substantial documentation that listed the apartment as her address.

A friend of the tenant testified that the tenant had been in Puerto Rico for “a couple of months in 2014,” the tenant was unhappy in Puerto Rico because of the inability to speak Spanish and the tenant expected to live in the apartment for the rest of her life. Another tenant witness testified that between 2013 and 2015, she had observed the tenant’s furnishings and papers in the apartment and that had been told that the tenant was “stuck in Puerto Rico having oral surgery.”

The tenant testified that she received Social Security Disability income based on her suffering from a “major depressive disorder, panic attacks, agoraphobia, and paranoia.” The tenant’s credit card and/or debit card purchases showed purchases in Puerto Rico on numerous occasions in 2013, 2014 and 2015. Bank and credit card statements had been mailed to the tenant at the apartment between September 2013 through October 2015 and Social Security income had been sent to the apartment.

Car insurance, medical bills, voter registration records and insurance bills had also been sent to the apartment. Her driver’s license and reduced fare metro card listed the apartment as her address. The tenant’s federal and New York income taxes for 2013 and 2014, which were filed in 2014 and 2015, also showed the apartment as her address. The tenant noted her medical care in New York City, citing her “primary care physician, a gynecologist, an asthma specialist and an audiologist” and her purchase of a cemetery plot in Queens, New York, because her mother was interred there.

The tenant asserted that while in Puerto Rico, she required “painful dental procedures” and had remained in Puerto Rico “because she was afraid of getting a blood clot or asthma attack on the plane.” She stated that she returned to New York in 2014 when her doctor said it was safe to travel. However, she returned to Puerto Rico and remained there from February to April 2015. She argued that she never “intended to move to Puerto Rico permanently.” She also noted that her Puerto Rican home was furnished with “second-hand furniture left by the seller,” she never opened bank accounts in Puerto Rico and she receives no mail in Puerto Rico. She explained that she had to call New York friends who spoke Spanish to help her purchase items in Puerto Rico.

Although the tenant claimed that her husband was fixing up the Puerto Rico properties to sell, they had not been sold at the time of the trial. She also admitted that the paramour stayed in the apartment “a few nights a week.” She stated that although the paramour “would leave money on the table” for the tenant to “help (tenant) out,” she had not asked the paramour for money and did not remember how much money she received.

The court explained that notwithstanding the tenant’s important documents which listed the apartment as her residence, the tenant had to have maintained “an ongoing, substantial, physical nexus with the subject premises for actual living purposes in order for the court to find that she maintains the subject premises as her primary residence.” A “physical presence” is significant in primary residence disputes and an absence from an apartment is “probative that a tenant is not maintaining the apartment as a primary residence.”

Documentary evidence demonstrated that the tenant was in Puerto Rico for a significant amount of time between April 10, 2013 and Sept. 27, 2013, five-and-a-half months, and was also there from Feb. 27, 2014 through Oct. 15, 2014, seven-and-a-half months and also between Feb. 13, 2015 through May 11, 2015, three months. The tenant had been in Puerto Rico for 15 months out of the 24 months before the landlord had purported to terminate the tenancy.

The court noted that “an absence from a rent-controlled apartment for more than 183 days, i.e., half of a year, per year tends to show nonprimary residence.” Moreover, subletting a rent-controlled apartment also demonstrates nonprimary residence. Although the tenant denied that she sublet the apartment, the paramour gave her “periodic payments” while the tenant was in Puerto Rico. Bank statements showed deposits for several months unrelated to payments from the Social Security Administration. They do not show the source of deposits, but they have “probative value” that the tenant received money for the use of the apartment by the paramour, especially in conjunction with the tenant’s deposition testimony.

The court explained that when a rent-regulated tenant occupies an apartment for less than 183 days, the absence from the apartment has been excused in part when the regulated tenant did not sublet the regulated premises. The court also cited the home mortgage tax deductions on the Puerto Rico home and the Puerto Rico mortgage provisions which required the tenant to reside there.

The court reasoned that the objective evidence of tenant’s physical absence from the apartment outweighed the tenant’s “subjective evidence” and the “preponderance of the evidence” demonstrated that the tenant had not “maintained the subject premises as her primary residence.” Moreover, the tenant had not pled medical necessity as a defense and failed to produce evidence from “any medical professional showing a connection between (tenant’s) relocation to Puerto Rico and any psychiatric or medical need.”

The court noted that receiving medical treatment does not prove “medical necessity” to remain in Puerto Rico and the medical issues did not explain the subletting or utilization of a home mortgage tax deduction. Accordingly, the court awarded landlord a final judgment of possession.

Comment: Adam Leitman Bailey, counsel for the landlord, stated, inter alia, that the trial exposed “fraud” by a tenant who had two homes and mortgages in Puerto Rico and who had sublet her apartment. He noted that the court analyzed “almost every day of the tenant’s complicated life for two years.”

Unpublished Comment: Adam Leitman Bailey also stated, “This is one of those cases that makes you appreciate how difficult it is to be a housing court judge—Judge Stoller had to analyze almost every day of the tenant’s complicated life for two years and by doing so exposed a fraud demonstrating that Puerto Rico remained her home and primary residence as she had not only two homes and mortgages there but also exposed the alleged paramour as a subtenant who paid rent. The most problematic part of these cases is that New York’s tax payers had to pay for the defense as this tenant with two apartments in Manhattan and two homes in Puerto Rico has not only free legal services providing free counsel through trial and possible appeal but also a white-show law firm also provided pro bono counsel.”

245 East 30th Street v. Joanna Alarcon, Civil Court, New York Co., Index No. 70872/2015, decided Oct. 16, 2018, Stoller, J.

Original Article

Adam Leitman Bailey, P.C.

NEW YORK REAL ESTATE ATTORNEYS