Philadelphia Skyline

A Tale of an Illegally Deregulated Apartment and the Elephant in the Room

In this chronicle, I represent a residential tenant[1]. I’ve been thinking for a while about how to present this story. The truth is, it’s a very routine and boring story. A tenant needed repairs. He was having trouble scheduling the repairs with the landlord. The landlord sent my tenant-client a scary letter, telling him they were coming into the apartment, one way or another, on a certain date and time. My client was very upset because on that date he had to attend a medical appointment with his sick, elderly mother. I, therefore, sent a letter to the landlord. The landlord backed down, my office helped to schedule access, the landlord accommodated the tenant, the work got done, the story is over. But…not really.

In the course of my representation of the tenant, I discovered that this was an illegally deregulated Rent Stabilized tenancy, being treated as free market. I see these every day. I estimate there are 250,000 illegally deregulated Rent Stabilized apartments out there. I, of course, informed the tenant. I apprised the tenant of his options for enforcing his rights, which are actually many in this situation, and the pros, cons, costs, time frames, and risks of each. I let the tenant know that he was likely being overcharged on the rent. 

The tenant told me, however, that he did not wish to pursue his right to a Rent Stabilized lease and an overcharge. In fact, he forbid me to mention my discovery in any way in any of my communications with landlord. The landlord wasn’t moving to evict him, he was comfortable with his rent, he had a long and generally good relationship with the landlord, he wasn’t a litigious fellow, his mother was sick. His position was simply – if it aint broke, don’t fix it. 

I couldn’t argue with that, and it wouldn’t matter if I did. It was the client's choice. I have witnessed this odd form of détente between landlords and tenants before in illegally deregulated apartments. Rent regulatory status is the elephant in the room that neither landlord nor tenant ever invokes against the other. For now anyway…

If a developer buys the building and sees tenant’s apartment on the rent roll as “Free Market” and then refuses to renew tenant’s next lease, I am guessing that tenant will be emailing me.

Respectfully submitted,

Michelle Itkowitz

[1] Details changed to protect people’s privacy.

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Defeating a Motion for Legal Fees; Sometimes a Cigar is Just a Cigar

December 26, 2017

In this saga I represent an owner of a multifamily building[1]. The tenant in this story has decided that her apartment should be the subject of a million dollar buyout. It doesn’t matter that the building is filled with other tenants and that the owner’s plans for redevelopment are years away from even beginning. This guy thinks his million bucks awaits him, if he can just torture the landlord enough.

Therefore, in three years, he has never once paid the rent in this nearly violation-free building. Never once. The landlord has had to sue him three times. The first two times, the tenant paid in full on the eve of trial. 

In an almost comical progression, this guy has variously been represented by NINE (9) different tenant lawyers. Each, in succession, has called me up and asked me if there was a buyout to be had here. Each time I said…no. Each tenant lawyer subsequently quit or asked the court to be relieved. 

The last poor firm, however, got stuck in the case. On the third lawsuit for rent, the tenant had to try the case. He knew another substantial rent payment on the eve of trial would set up the ball for a chronic non-pay case. So, try the case we did. After a two-day trial, the tenant received a partial abatement of the rent for the period sued for. Tenant, again, cut the check for the large balance immediately. Tenant’s lawyer then moved for a determination that tenant was the prevailing party and that, therefore, landlord should pay tenant’s legal fees. The general rule is that if a tenant is withholding rent to get repairs, and wins an abatement, they might well be considered the prevailing party. But, this tenant did NOT withhold rent in order to get repairs! First, the condition that resulted in the small abatement arose 9 months after the latest default began! Second, this tenant’s agenda in withholding rent was solely and clearly because someone told him that making the landlord sue you is a pathway to a buyout. It’s not. So, thankfully and correctly, the judge agreed with me and denied the tenant’s motion for legal fees. 

What’s the lesson? Sometimes a cigar is just a cigar. Sometimes an apartment is just an apartment. Not every Rent Stabilized apartment is a million dollar buyout waiting to happen. Some landlords still actually just want their tenants to pay the rent.

Respectfully submitted,

Michelle Itkowitz

[1] Details changed to protect people’s privacy.

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When a Historic Townhouse Goes Back to Its Roots

November 30, 2017

We helped an owner of an historic town house recover a building through a package of generous buyouts and tenant relocation assistance, which were mutually-beneficial-to-tenants[1]. The Tenant Association was represented by one of the absolute best tenant-buyout lawyers in the City. The Tenant Association was strong and filled with an eclectic group of insightful people who needed to carefully weigh their decisions about accepting buyouts. In the end, both sides came together, we got it done, and everyone moved on to better next chapters. 

This story is the story of the physical building’s better next chapter. The building was once a grand, single-family home. By the time our story here starts, the building was chopped up into tiny SRO apartments and oddly shaped and tiny regular apartments. When my client purchased the building a few years ago, it was shockingly run down. These big old houses were simply never intended to become apartment buildings. But, many were hastily carved up about 60 years ago, when their owners had given up on an economically ailing New York.

On the day of vacatur, I accepted the last set of keys and stayed behind awhile. There I was, standing in the silent, empty building. The sun was streaming through from the skylight at the roof, down to where I was seated on the steps. The air was dusty and warm. I walked around a little, to make sure the house was empty, although I knew it was. And, to just peek at the detritus left behind by people’s lives. Bottles of Windex sitting on sinks that no one would ever clean again. Books that no one would ever read. Pieces of things - exercise equipment and computer monitors - just the crap that we all collect and don’t want to take with us when we move.

As I opened apartment doors and didn’t shut them, as I roamed freely around, I could feel the house breathing again. I could not only feel the ghosts of all the people from the past who had lived their lives there, but I could see the ghosts of the future as well. I could see a big family eating Thanksgiving dinner at a long table.

Small apartments are needed, for sure. Micro units. Co-living. Affordable. It’s all good. But SRO’s never belonged in that land-marked building, which was a single-family home and an almost ancient piece of New York City’s architectural history. New York City needs to hold on to some of its past as it moves towards its future.

Respectfully submitted,

Michelle Itkowitz

[1] Details changed to protect people’s privacy.

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This is What happens When You Give a Defaulting Tenant a Mountain of Leverage

November 6, 2017

I get substituted in for other landlord’s counsel a lot - I mean no disrespect to other counsel by that statement. The problem is that most firms that represent landlords have a low-price-volume-case-load business model. That actually makes perfect sense for most non-payment cases. But not for all cases.

In this cluster-mess of a case in Brooklyn[1], the owner got four pieces of terrible legal advice. 

First, the lawyer told the owner that the tenant had no right to have two roommates. Well, that may be true (see the booklet on this topic on my Booklets page). But, the two occupants were not both roommates. One was the same-sex life-partner of the tenant. That person was the tenant’s family and had every right to be in the apartment - and the family had a right to a roommate.  

Second, the lawyer was trying to force a backdated Rent Stabilized lease on the tenant. That is not legal. 

Third, the lawyer told the owner not to accept an $11,000.00 HRA arrears payment check. You can’t do that! A defense to a nonpayment case is…hello?...payment. Not to mention that this is possibly source-of-income discrimination. 

Fourth, the tenant was always in arrears. There were no repairs issues. Yet, every time the case got close to trial, owner’s counsel told her to settle with a large abatement. 

The tenant took his case to very-experienced-tenant’s-counsel. What did very-experienced-tenant’s-counsel see? They saw a tenant who was being hassled about the occupancy of her spouse, who was being hassled over her Rent Stabilized lease date, whose welfare payments were being baselessly rejected by landlord, and who was getting sued all the time, even though she was getting abatements! Very-experienced-tenant’s-counsel brought a discrimination case against owner!

That’s when owner came to me. I had to give them lots of tough love. They were fighting all the wrong fights, and in doing so, they had given this perpetually defaulting tenant a mountain of leverage. 

It took about two years to extricate owner from the situation. I started from the beginning and did everything by the book, from the lease forward. It is difficult in these situations to recreate trust between the parties. Opposing counsel typically needs to see me walk the walk, as well as, talk the talk. Ultimately, the tenant and her counsel decided that she really could not afford the unit and she decided to move in with family elsewhere. Owner helped her on her way with a fair buyout. 

What’s the lesson? The lesson is that owners and their volume-priced-counsel need to identify when a case is no longer a good fit for a volume practice. 

Respectfully submitted,

Michelle Itkowitz

[1] Identifying details changed to protect the innocent. 

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Itkowitz PLLC Helps Couple Keep Wilson, the Emotional Support Animal Kitty

October 19, 2017

We helped a couple keep their cat, Wilson[1], on the basis that the cat is an Emotional Support Animal.

This case was a little different, only because the unit wasn’t Rent Stabilized. That exposed the family to the vulnerability that their rent could later go way up, allegedly based on market conditions and not on landlord’s resentment over the ESA letter I was sending. Moreover, the tenant was provided the apartment as part of her compensation package for her job with a large corporation, making the situation even more delicate. 

The lesson here is that in such cases it’s important to keep the tone of an ESA letter positive, as opposed to confrontational, and let the landlord know that the tenant takes his or her responsibilities as a member of the building community seriously. The person just really needs the animal, because of a duly diagnosed disability, in order to use and enjoy the unit, and one little cat is a reasonable accommodation for that disability.

Respectfully submitted,

Michelle Itkowitz

[1] All feline names were changed to protect the innocent. 

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