Nicolae Gogarnow, Petitioner, v. Rosalia Silvia, Respondent, John Doe and Jane Doe, Respondent-Undertenants.
In this alleged month to month holdover proceeding, both Petitioner and Respondent Silvia were represented by counsel. No other Respondent appeared and the trial is deemed an inquest as to them.
It is largely undisputed that Petitioner is the owner of the subject five family house and resides on the first floor. The Court rejects Respondent's argument that Petitioner failed to demonstrate standing due to an attorney certified deed not having an address. Aside from the certification of an officer of the Court as permitted by the CPLR, the block and lot contained on the deed and the multiple dwelling registration were the same. The address on the multiple dwelling registration is the subject building. By connection of the two documents, ownership of the subject building was established. Additionally, the demonstration of ownership was not necessary as both sides agreed to the existence of a landlord tenant relationship.
Respondent became a tenant pursuant to a written agreement which expired many years ago. Respondent remained in possession and continued to pay rent at least through April 2016. It should be noted that while both sides agreed there was a written lease at the beginning of the landlord tenant relationship, neither side offered same into evidence.
Petitioner commenced this proceeding by service of a notice of petition and petition holdover. Said petition asserted that the subject premises is not subject to rent regulation as there are less than six residential units and there is no current lease between the parties. Counsel for Respondent interposed an answer asserting three defenses, an affirmative defense and a single counterclaim. Said defenses and counterclaim pertained to the rent regulatory status of the subject apartment. The affirmative defense alleges a breach of the warranty of habitability.
The parties agree that there are presently five (5) residential units in the subject building. It appears that the subject building has both a residential and commercial purpose. On the first floor, there is an entrance to the residential section and a separate entrance to the commercial part. The Court had an opportunity to view these entrances and the building itself on an inspection after the conclusion of the trial. The parties agree that the second and third floors each have two apartments that are occupied. Petitioner resides in one apartment (1L) on the first floor. The space in question is on the right side of the first floor as one enters the subject building and is hereafter designated ‘1R‘.
Respondent testified that in the time that she has resided in the subject apartment, she could recall four tenants in ‘1R‘. Two were Filipino families (though they may have resided in the space simultaneously) and the other two were white families. Respondent was unable to provide names or dates of the alleged tenancies. Nor had Respondent ever been inside the space in question.
Interesting to the Court was an alleged Zillow ad for the subject space. The Court observed that the pictures in the ad could be the subject space. However, the ad does not identify the subject space specifically. Said ad also stated that the space was neither for ‘rent or sale‘. From the Court's inspection, the picture in the ad could just as easily been to apartment ‘1L‘ or another apartment. A broker placed the ad but there was no information or phone number that could be connected to Petitioner. Respondent did not call the broker as a witness nor could she demonstrate that Petitioner or anyone connected to Petitioner placed the ad. Indeed, the Court had to question why such an ad would be placed since it was clearly not to entice anyone to rent or purchase a unit.
In the basement there were six electric meters. This was not surprising since the commercial space was still in use. Also, generally, there is a meter for the common areas in the building. While the Court did see mailboxes in the residential space, no mailbox was observed in the commercial area. The Court did not recall if names and/or apartment numbers were on the exterior of the mailboxes. However, photos offered into evidence demonstrated that at some point, two possibly three mailboxes were designated and the others were not.
Respondent did not offer any documentation demonstrating that there were tenants in ‘1R‘ at any time other than a photo of correspondence from Con Ed addressed to ‘Duncan Stift‘ at ‘1R‘ in November 2017. This, at least corresponded with when Respondent claimed she last saw someone in ‘1R‘. However, Respondent was unable to connect the mailing to a person in ‘1R‘.
Rent Regulatory Status
The question of whether or not ‘1R‘ is a sixth residence making the subject building rent stabilized rests on the definition of a housing accommodation and whether or not the Court believed that a sixth residential unit (housing accommodation) existed or exists in the subject building. Rent Stabilization Code § 2520.6 (a) defines ‘housing accommodation‘ 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, and all services, privileges, furnishings, furniture and facilities supplied in connection with the occupation thereof. The term housing accommodation will also apply to any plot or parcel of land which had been regulated pursuant to the City Rent Law prior to 1971, and which became subject to the RSL after June 30, 1974.‘
Case law has held that, if the other criteria are met, once a building contains six or more units, absent some other exemption, all units in that building become rent stabilized regardless of when the sixth unit is created. Wilson v. One Ten Duane Street Realty Co., 123 AD2d 198 (App. Div., 1st Dept., 1987) Case law has long held that the primary issue in determining whether a building is subject to rent stabilization is the function of the units, which ‘is not limited by physical or structural requirements.‘ Matter of Graecor Realty Co. v. Hargrove, 90 NYS 2d 355, 355, 660 NYS 2d 704 (1997) Rather it appears to be the use of the units as living space that is the primary question to determine regulatory status.
Whether or not the building is capable of being legally used as a six or more unit dwelling or whether the units in existence meet applicable code is not a question that trumps the question of coverage under rent stabilization. Robrish v. Watson, 48 Misc. 3d143(A) (AT 2nd , 11th and 13th Jud Dists 2015), 124 Meserole LLC v Recko, 55 Misc 3d 146(A) (App Term 2nd , 11th, & 13th Jud Dists, 2017) Even where the units were nothing more than windowless cubicles, the fact that they were used and intended to be used as residential spaces is sufficient to render the building subject to rent stabilization. White Knight Ltd. v. Shea, 2004 NY Slip Op 06728, 10 AD3d 567 (App Div 1st Dept. 2004) The lack of a kitchen and toilet do not preclude the conclusion that a sixth residential unit is in existence subjecting a building to rent stabilization. 128 Cent. Park v. Cooney, 1119 Misc 2d 1045 (1989).
Relevant case law takes a severe and pointed position on the issue of rent stabilization in that even if the landlord or its agents did not create the extra units, but only acquiesced, the building will be subject to rent stabilization if there is at least a sixth unit used for living purposes. R.G.P. Management and Realty Corp. v. Jones, Civil Kings, L & T 071656-16, NYLJ 7/26/17. Nor is a landlord's knowledge of the extra units necessary for the building to be subject to rent stabilization. Joe Lebnan LLC v. Oliva, 39 Misc 3d 31,32 (App Term 2nd, 11th & 13th Jud Dists, 2013) Even after the number of units is reduced to below six, the rent stabilized status of the remaining units continues. Rashid v Cancel, 9 Misc 3d 130 (A)(App. Term, 2nd & 11th Jud. Dsts., 2005).
Given the lack of specificity relating to the identities of said ‘tenants‘ and dates of occupancy, it is hard for the Court to determine that Respondent has established that there was a sixth residential unit in use at the premises. Further, Respondent was unable to present sufficient documentation or other witness testimony to support and/or corroborate her position. As such, the remaining question relating to rent regulation pertains to the phrase ‘or intended to be occupied‘.
An inspection of said space demonstrated that it is under construction to become, what the governing agencies related to housing issues, would recognize as an apartment. While there are currently fixtures such as a toilet, vanity, shower, AC unit, kitchen cabinets and sink installed, there is no water or electricity in the subject space. Though a circuit box was in the space, it was not connected to any power. Actually, at the time of the inspection the wiring was still exposed and though some light fixtures had been installed, other light fixtures were on the floor waiting to be installed. Sheet rocked walls were up and rooms made. How close said space was to being suitable for residential occupation was not clear but it was clear that said space was being made ready for residential use.
In fact, it appears that Petitioner has been preparing to make at least a sixth residential unit in the subject building for the past two years. DOB violation number 35141636M, dated March 8, 2016, asserted that the inspector ‘observed illegal bypass from boiler gas meter to 2 apts on first floor‘. A hearing on the violation was scheduled for April 26, 2016 but neither side presented the Court with a determination. A review of the DOB Job Overview page shows that for this violation a permit was sought and approved in August 2016.
Also in March 2016, DOB violation number 35144509N was issued against the subject building asserting ‘altered/changed building occupied without a valid certificate of occupancy as per 28-118.3.1, 28-118-3.2. Noted: Job No.402521614 Alt 1 to convert 4 family to 7 family not signed off. Building was occupied without a valid C of O at time of inspection.‘ The remedy recommended was to ‘obtain a valid C of O or discontinue illegal occupancy.‘ A hearing on the violation was scheduled for April 9, 2016. There is no indication of an outcome or if any further action was taken by Petitioner or DOB to address the violation or the condition.
There is little case law that determines/sets forth what ‘intended to be occupied‘ actually means. There is no set criteria that can be found as being determinative. Given the numerous facts that could possibly impact on this determination, a review of the totality of the circumstances seems the more appropriate approach to determine ‘intent‘. It would seem to be nonsensical for the standard to be as subjective as the instant an owner decides space previously not used residentially would be used residentially in the future. This abstracts mental exercise, without more seems fraught with snares and traps providing little guidance to litigants and the courts. It would seem that more than an off hand thought is required.
Instead, a decision and some kind of pro-active steps is a necessary combination to reach the conclusion that a particular space is ‘intended to be occupied‘. This interpretation is in accordance with the remedial purpose of rent regulation statutes but still protects landlords from overly subjective standards and arbitrary enforcement.
In the instant proceeding, Petitioner's witness acknowledged that there was an intent to have two apartments on the first floor. Petitioner hired an architect to draw plans to convert ‘1R‘ into a residential housing accommodation. Said plans were filed with DOB and a permit application has been approved by DOB. Though not shown to the Court, the DOB records indicate that an ALT 1 was filed which would require a change in the certificate of occupancy. It further appears that Petitioner has been ‘intending‘ to rent ‘1R‘ residentially for the last two years given the DOB violations.
‘1R‘ is configured to be an apartment. At the time of inspection, there were sheet-rocked walls, bathrooms and fixtures, a kitchen and fixtures, flooring, lighting fixtures and rooms contained in the space. It is true that, as of the inspection, ‘1R‘ was not ready to be occupied. The Court declines to find that the delay in completion of ‘1R‘ has been to avoid granting Respondent rent stabilization protections but Petitioner has not provided the Court with an explanation for what has taken more than two years to finish construction. Given that allegedly there have never been any occupants, access could not have been an issue. Whatever the reasons are, they are clearly solely of the Petitioner's creation.
Based on the foregoing, this Court can reach no other conclusion than that there is a sixth space, known as ‘1R‘ that is ‘intended to be occupied‘ residentially. That said space is not currently occupied or that Respondent is unable to demonstrate occupancy, does not appear to be the standard given the amount of work performed on ‘1R‘ to make it ready for residential use. The proceeding is dismissed as there are six housing accommodations in the subject building and Respondent is a rent stabilized tenant. In order for Petitioner to be successful in terminating Respondent's tenancy, one of the grounds set forth in the rent stabilization law and code must be asserted. The Court declines to reach any of the other issues raised at trial as moot.
This constitutes the decision and order of the Court.
Dated: April 24, 2018
Queens, New York
John S. Lansden, J.H.C.
John S. Lansden, J.