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Successful Eviction of a Mitchell-Lama Occupant Despite Prior Issuance of Stock

The board of directors of the firm’s client, a Mitchell-Lama cooperative, faced a daunting problem: Based on a tip, they suspected that the current occupant of a unit in the cooperative was residing there illegally. However, all of the cooperative’s documentation — proprietary lease, application, and household income affidavits — indicated that the occupant was, in fact, the lawful successor to the apartment. And, to make matters even more difficult, the occupant of the unit in question was listed on the most recent stock certificate, a privilege reserved only for tenants. The board turned to its general counsel Adam Leitman Bailey, P.C. for its assistance with this matter.

While many attorneys assume that stock certificates are dispositive of right to occupancy, Adam Leitman Bailey, P.C. knew that the lease, not the stock, is dispositive of this right. Since the occupant’s name was not on the proprietary lease, the firm knew that the burden fell on the occupant to prove her right to succeed to the tenancy.

Adam Leitman Bailey, P.C. sent a letter to the occupant requesting documentary proof of her right to succeed to the apartment. Within one week the firm received a multitude of documents that at first review seemed to prove the occupant’s right to the apartment by means of succession from the tenant of record. The firm knew it had to dig deeper.

Knowing that the purported successor must prove requisite family relationship and cohabitation with the tenant of record for the two years prior to the tenant’s vacating the premises, the firm carefully studied the current tenant’s household income affidavits and examined the documents submitted by the occupant. While birth certificates proved the requisite family relationship, her proof of residency was weak. Bank accounts held in the tenant’s name with the address of the premises had very low balances and the credit cards held in the tenant’s name with the address of the premises had almost no activity. In addition, the occupant did not submit tax returns or W2s, both of which were specifically requested in the firm’s document request letter.

Once the firm determined that the occupant’s succession claim was tenuous, the firm performed an investigative database search. It found that the tenant owned a unit in a condominium in Miami during the two years she claimed to be living in the cooperative unit with the occupant. In addition, the firm found out that the tenant’s Miami condominium unit was homestead exempt, which meant that it was the tenant’s primary residence for the two years in question. Since a person may maintain only one primary residence, the apartment in the Mitchell Lama cooperative could not have been maintained as her residence during the pertinent two-year time period.

The firm therefore knew that the tenant had staged documents with the intent of illegally transferring the apartment to the occupant. It immediately denied the succession rights of the occupant and sent the tenant a notice of intention to terminate the lease.

Several days after the service of the firm’s denial and notice, it was contacted by the occupant’s attorney. The firm explained the breadth of its evidence and that, pursuant to the Mitchell-Lama Rules, its attorneys’ fees would be deducted from the tenant’s equity investment in the apartment. Within hours, the occupant agreed to surrender the apartment.

By conducting an investigation instead of spending time litigating in court, Adam Leitman Bailey, P.C. saved the cooperative thousands of dollars in legal fees and still recovered possession of the apartment.

Christopher Halligan represented the board in this case on behalf of the cooperative corporation.

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