BY STEPHEN C. SHULMAN,
BORAH GOLDSTEIN ALTSHULER & SCHWARTZ

On Wednesday, June 21, 2000 the New York Association of Realty Managers (NYARM) presented the seminar "Landlord/Tenant Issues Facing the Real Estate Professional" at the Buildings NY show. More than 100 management professionals attended this important forum at the Jacob Javits Convention Center. The panelists included Honorable Dawn Jiminez, Judge of Kings County, Civil Court, Housing Part; Scott Gross, Law Offices of Scott D. Gross and the author Stephen Shulman, Borah Goldstein Altshuler & Schwartz. Stephen Elbaz, Esquire Management Corp and NYARM secretary was moderator. Following is a review of Mr. Shulman's presentation.

I'd like to thank this organization for inviting me to speak as a panelist at an informative seminar, "Landlord/Tenant Issues Facing the Real Estate Professional" that took place during the Buildings New York Show at the New York Jacob Javits Center. Stephen Elbaz, Scott Gross, the Honorable Dawn Jiminez and I spoke on a variety of issues. I spoke about some important topics: the general state of landlord/tenant litigation; luxury decontrol; recovering apartments after the death of a tenant and private investigations of non-primary residence tenants.

LANDLORD/TENANT LITIGATION

The general health of landlord and tenant litigation is good. As the value of real estate rises the market for rent stabilized apartments creeps closer to $2,000. As such, there is greater intensity by landlords to recover apartments in the range above $1200 per month. The reason is simple. With a 20% vacancy increase for a two-year lease and some renovations these recovered apartments can often be decontrolled.

Two specific areas I am seeing more prevalent cases being brought are illegal subletting and nuisance. Since any holdover proceeding is an opportunity to negotiate a settlement for a tenant to vacate the premises for money, landlords are bringing illegal sublet causes of action. In luxury apartments the sensitivities of the tenants are greater to noise, and thus the opportunity to bring a nuisance proceeding is more likely to generate support and sympathy from tenants who would ultimately be called to court to testify.

These cases often end in better results for the landlords as the judges are more willing to enforce the leases to protect other tenants. Because these cases do not involve evictions of lower income strata, then the sympathies inherent in rent stabilized apartments toward tenants are not as prevalent with the judges in these types of proceedings.

With regard to the court system itself, there are enough judges in Manhattan that trials are within easy reach of a landlord who chooses not to settle the case. Most non-payment and simple holdover proceedings can be tried in one half day and since a judgment can result in a more expedient eviction they are more attractive to many clients.

LUXURY DECONTROL

Similar to the foregoing is the number of decontrol applications that my firm has been handling in the past few years. The lowering of the safety net to $2,000 and $175,000 income has opened a whole new area of litigation. Often these decontrol cases lead to the tenant voluntarily giving up possession instead of revealing their income/assets, etc.

RECOVERING APTS AFTER DEATH

When recovering an apartment after a tenant's death there is a difference between rent controlled apartments and rent stabilized apartments, the latter can be effected by the existence of a current lease. In a recent situation I was handling, a woman passed away with a current renewal lease. At the time of her death she was living in another apartment with her daughter and her grandchildren were living in her apartment. It took an application by the landlord in Surrogates Court to appoint an administrator for her estate so the administrator could be sued for illegally subletting (the estate had a right to the apartment until the lease expires, which will not be until 2001). In a rent control situation however, because there is no lease, the estate has no right to hold on to the apartment after the tenant's death and must surrender it immediately. Any occupants that remain after the tenant's death are usually merely licensees and rent should not be accepted by the landlord and a proceeding should be commenced immediately.

PRIVATE INVESTIGATIONS

Finally, I spoke about private investigations and recent situations where elderly people who reside in premises, have their children transfer the address on their own documents to the parents' premises to make a claim when their parent dies. I recommend to clients, who have this situation, to employ a private investigator to set up a security camera in the hallways and make a record as to who occupies the premises during the last months of the tenant's life and to document the child's address and obtain records of bank accounts and other information to be prepared for at the time of the death of the tenant.