Background: The city's J-51 program gave landlords tax breaks in return for making some property improvements and keeping apartments rent-stabilized. Until 2009, when a landlord succeeded in deregulating an apartment because of a provision in the RS law, they would simply lose a pro-rata share of the J-51 tax benefit. Everybody happy. Then the Roberts decision came along, saying that no apartment... [more]
Background: The city's J-51 program gave landlords tax breaks in return for making some property improvements and keeping apartments rent-stabilized.
Until 2009, when a landlord succeeded in deregulating an apartment because of a provision in the RS law, they would simply lose a pro-rata share of the J-51 tax benefit. Everybody happy.
Then the Roberts decision came along, saying that no apartment could be deregulated as long as any J-51 benefits were being received. That threw a wrench into everything, with previously-deregulated tenants suing for the extra rent they'd paid since being deregulated.
The London Terrace Gardens landlord tried to get around Roberts, wanting to give back all the J-51 benefits it had ever received, in return for being able to deregulate as usual. Their theory was that J-51 is a contract that can be rescinded.
The Court of Appeals just said no, it's not a contract and therefore can't be rescinded.
I'd say the Legislature's due to inflict something on tenants, to help keep things in balance after the beatings landlords have gotten in the courts.
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Response by aboutready
about 13 years ago
Posts: 16354
Member since: Oct 2007
I don't know, NWT. It's an interesting question, but I think for such a long time that tenants really had little to no decent representation. I remember on this forum Malraux claiming that landlords have no duty to mitigate damages if someone vacates a premise before the lease was up. I was in family court waiting the other day, and I heard someone's attorney tell them that the landlord has a duty to mitigate.
the case that Malraux was relying upon, and which some lame ass judge used in housing court, was one involving a commercial lease. any attorney worth his or her salt could have distinguished it, and most judges/law clerks would have done so in a civil action that was more sophisticated. but tenants haven't gotten really any real systemic representation because they don't have the means or a large enough group for a more motivated, talented group of attorneys to take on the case.
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Response by huntersburg
about 13 years ago
Posts: 11329
Member since: Nov 2010
>and I heard someone's attorney tell them that the landlord has a duty to mitigate.
You were listening to someone else's private attorney conversation?
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Response by NYCNovice
about 13 years ago
Posts: 1006
Member since: Jan 2012
NWT - Interesting, and thank you for posting.
AR - I think landlords in New York are in a surprisingly strong position; I was shocked when I looked into question re landlord duty to mitigate for myself when I wanted out of an apartment months before lease was set to end. The below is not intended to be a substitute for review of any situation by a qualified attorney, but it is worth reading for any tenant who thinks it is a no-brainer that a landlord has a duty to mitigate. The excerpt is from a law review article by Jeremy Scheff, published in the Journal of Civil Rights and Economic Development in the sprint of 2011 (A TALE OF TWO CITIES: THE RESIDENTIAL LANDLORD'S DUTY TO MITIGATE, 25 JCIVRED 673):
"The past half century has seen sweeping changes to the legal regime applicable to the landlord-tenant relationship, particularly for residential properties. [FN2] As every first-year law student learns, the ancient feudal conception of a lease as a present transfer of an interest in land has given way to a more modern understanding of leases as contracts between a provider of a package of goods and services and their consumer. [FN3] Among the changes wrought by this conceptual shift has been the imposition of previously unknown obligations on landlords in the event of tenant abandonment. Called either the duty to mitigate or, perhaps more accurately, the avoidable consequences rule, [FN4] the rule requires a landlord seeking recovery of damages from a defaulting tenant who has abandoned possession to establish that he has made reasonable efforts to minimize the *674 damages flowing from the tenant's abandonment, for example by attempting to re-let the abandoned property. [FN5] This is a departure from the traditional rule that a landlord could, if he chose, allow property abandoned by a tenant during the term of a lease to sit vacant and idle, and still hold the tenant liable for the full rent due under the lease for the entire term thereof. [FN6] One recent survey reports that the District of Columbia and all but six states have adopted this rule by statute or judicial decision in the four decades since it first entered the American legal landscape. [FN7]
New York has been a studied exception to this trend. For decades, the lower courts in the state have variously imposed and rejected the landlord's duty to mitigate, at least in the context of residential leases. [FN8] This unsettled situation came to an apparent end in the summer of 2008, when the Appellate Division, Second Department, of the New York Supreme Court handed down its decision in the case of Rios v. Carrillo. [FN9] That case, extending the no-mitigation rule reaffirmed by the Court of Appeals with respect to commercial leases in Holy Properties, Ltd. v. Kenneth Cole Productions, Inc., [FN10] sided with those lower courts that had held that residential landlords have no duty to mitigate, and in so doing, effectively imposed the traditional no-mitigation rule statewide for the foreseeable future. [FN11]
*675 This Article argues that the Rios decision is worthy of criticism, but not because imposing a duty to mitigate on landlords is necessarily the best rule for every dispute arising out of a residential tenant's abandonment. Rather, Rios is bad law because it is the product of an unfortunate confluence of a poorly framed legal issue, a poorly organized judicial hierarchy, and an economically diverse jurisdiction."
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Response by aboutready
about 13 years ago
Posts: 16354
Member since: Oct 2007
That case was so poorly argued and briefed. I haven't seen any subsequent rulings on the issue. I have no idea why a court would extend the no-mitigation rule that applies to commercial leases. it has long been recognized that in commercial matters there are more sophisticated negotiators who both have input as to the terms of the agreement. i have yet to read a lease prepared for a major landlord that did not violate public policy. once we convinced a managing agent to take out a particularly egregious error (tenant would pay for all legal costs regardless of outcome), but i've signed leases that have made me cringe. including the 20 or so page one presented by MetLife for Peter Cooper Village.
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Response by NYCNovice
about 13 years ago
Posts: 1006
Member since: Jan 2012
AR - Unfortunately I do not think there are any subsequent rulings on the issue and thus this horrendous decision (Rios) may well be the law (appeared to be when I looked at it for myself, but this is not intended to be construed as a legal opinion by a qualified attorney). It would take a very deep and determined pocket to take the issue higher. That is why scholars such as Sheff try to draw attention to situations like this one; one hopes that the legislature will step in and fix the issue. I am totally with you that tenants are at a great disadvantage here.
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Response by HarlemFF
about 13 years ago
Posts: 63
Member since: Sep 2012
The landscape is changing rapidly
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Response by huntersburg
about 13 years ago
Posts: 11329
Member since: Nov 2010
Harlem, you've been posting frequently on a variety of issues since you joined in September. And always nice brief posts. Welcome to streeteasy. Welcome.
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Response by NYCNovice
about 13 years ago
Posts: 1006
Member since: Jan 2012
Is it just me, or is there something ominous in HarlemFF's pithy posts?
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Response by notadmin
about 13 years ago
Posts: 3835
Member since: Jul 2008
> Background: The city's J-51 program gave landlords tax breaks in return for making some property improvements and keeping apartments rent-stabilized.
Landlords as losers cause of a property tax break... interesting!
I don't know, NWT. It's an interesting question, but I think for such a long time that tenants really had little to no decent representation. I remember on this forum Malraux claiming that landlords have no duty to mitigate damages if someone vacates a premise before the lease was up. I was in family court waiting the other day, and I heard someone's attorney tell them that the landlord has a duty to mitigate.
the case that Malraux was relying upon, and which some lame ass judge used in housing court, was one involving a commercial lease. any attorney worth his or her salt could have distinguished it, and most judges/law clerks would have done so in a civil action that was more sophisticated. but tenants haven't gotten really any real systemic representation because they don't have the means or a large enough group for a more motivated, talented group of attorneys to take on the case.
>and I heard someone's attorney tell them that the landlord has a duty to mitigate.
You were listening to someone else's private attorney conversation?
NWT - Interesting, and thank you for posting.
AR - I think landlords in New York are in a surprisingly strong position; I was shocked when I looked into question re landlord duty to mitigate for myself when I wanted out of an apartment months before lease was set to end. The below is not intended to be a substitute for review of any situation by a qualified attorney, but it is worth reading for any tenant who thinks it is a no-brainer that a landlord has a duty to mitigate. The excerpt is from a law review article by Jeremy Scheff, published in the Journal of Civil Rights and Economic Development in the sprint of 2011 (A TALE OF TWO CITIES: THE RESIDENTIAL LANDLORD'S DUTY TO MITIGATE, 25 JCIVRED 673):
"The past half century has seen sweeping changes to the legal regime applicable to the landlord-tenant relationship, particularly for residential properties. [FN2] As every first-year law student learns, the ancient feudal conception of a lease as a present transfer of an interest in land has given way to a more modern understanding of leases as contracts between a provider of a package of goods and services and their consumer. [FN3] Among the changes wrought by this conceptual shift has been the imposition of previously unknown obligations on landlords in the event of tenant abandonment. Called either the duty to mitigate or, perhaps more accurately, the avoidable consequences rule, [FN4] the rule requires a landlord seeking recovery of damages from a defaulting tenant who has abandoned possession to establish that he has made reasonable efforts to minimize the *674 damages flowing from the tenant's abandonment, for example by attempting to re-let the abandoned property. [FN5] This is a departure from the traditional rule that a landlord could, if he chose, allow property abandoned by a tenant during the term of a lease to sit vacant and idle, and still hold the tenant liable for the full rent due under the lease for the entire term thereof. [FN6] One recent survey reports that the District of Columbia and all but six states have adopted this rule by statute or judicial decision in the four decades since it first entered the American legal landscape. [FN7]
New York has been a studied exception to this trend. For decades, the lower courts in the state have variously imposed and rejected the landlord's duty to mitigate, at least in the context of residential leases. [FN8] This unsettled situation came to an apparent end in the summer of 2008, when the Appellate Division, Second Department, of the New York Supreme Court handed down its decision in the case of Rios v. Carrillo. [FN9] That case, extending the no-mitigation rule reaffirmed by the Court of Appeals with respect to commercial leases in Holy Properties, Ltd. v. Kenneth Cole Productions, Inc., [FN10] sided with those lower courts that had held that residential landlords have no duty to mitigate, and in so doing, effectively imposed the traditional no-mitigation rule statewide for the foreseeable future. [FN11]
*675 This Article argues that the Rios decision is worthy of criticism, but not because imposing a duty to mitigate on landlords is necessarily the best rule for every dispute arising out of a residential tenant's abandonment. Rather, Rios is bad law because it is the product of an unfortunate confluence of a poorly framed legal issue, a poorly organized judicial hierarchy, and an economically diverse jurisdiction."
That case was so poorly argued and briefed. I haven't seen any subsequent rulings on the issue. I have no idea why a court would extend the no-mitigation rule that applies to commercial leases. it has long been recognized that in commercial matters there are more sophisticated negotiators who both have input as to the terms of the agreement. i have yet to read a lease prepared for a major landlord that did not violate public policy. once we convinced a managing agent to take out a particularly egregious error (tenant would pay for all legal costs regardless of outcome), but i've signed leases that have made me cringe. including the 20 or so page one presented by MetLife for Peter Cooper Village.
AR - Unfortunately I do not think there are any subsequent rulings on the issue and thus this horrendous decision (Rios) may well be the law (appeared to be when I looked at it for myself, but this is not intended to be construed as a legal opinion by a qualified attorney). It would take a very deep and determined pocket to take the issue higher. That is why scholars such as Sheff try to draw attention to situations like this one; one hopes that the legislature will step in and fix the issue. I am totally with you that tenants are at a great disadvantage here.
The landscape is changing rapidly
Harlem, you've been posting frequently on a variety of issues since you joined in September. And always nice brief posts. Welcome to streeteasy. Welcome.
Is it just me, or is there something ominous in HarlemFF's pithy posts?
> Background: The city's J-51 program gave landlords tax breaks in return for making some property improvements and keeping apartments rent-stabilized.
Landlords as losers cause of a property tax break... interesting!
Central planning stirring up trouble once again.