Maintaining Rent-Stabilized Status
I live in a rent-stabilized apartment in New York City. I also own a condominium in Florida, where I spend winters and some weeks at other times of the year when I visit family. I keep a car in my garage in Florida, and have it insured there. My landlord in New York City, with whom I have had a good relationship for years, is building a case that I am a Floridian, and not entitled to rent stabilization. He has done some checking and talked to unsuspecting neighbors in my absence. He is now asking me to leave my apartment voluntarily and hinting he will take me to housing court if I do not vacate. What are the rules about residency regarding stabilization? I am willing to do what I must, including selling the condo, in order to maintain my apartment.
Long Island City, Queens
Tales of the rent-stabilized tenant who owns a second home in some far-flung locale like Florida is the stuff of urban legend. It is also the stuff that catches the attention of landlords.
“Non-primary residence is one of the most common forms of bogus housing court cases that we see,” said Susan K. Crumiller, a lawyer who represents tenants. “This is clearly the landlord grasping at the lowest-hanging fruit.”
As a rent-stabilized tenant, you are allowed to own or rent a second home, so long as your rent-stabilized apartment is your primary residence. Primary residency is determined by a number of factors, like how many days a year you spend at your apartment; where you are registered to vote; and where you earn your income. If your case were ever to go to trial, a judge would weigh these things to reach a decision.
If your landlord wants to try to evict you for breaking the rule, he would have to serve a notice of nonrenewal 90 to 150 days before your lease expires. Proceedings could begin once the lease expires. If the landlord proves to a judge that your primary residence is in Florida, you could lose the apartment because you cannot change your residency to correct the violation.
By approaching you so casually about the issue, your landlord might be trying to avoid a trial, which can be costly and time consuming. If his evidence against you is thin, he might not want to take the risk. Not all landlords are so casual about the process. “If the tenant were in one of my buildings, I would serve him immediately” with a notice of nonrenewal, said Arthur Zabarkes, a real estate developer and consultant.
In the event that your landlord does sue to evict you, start keeping tabs of your whereabouts. Keep a journal marking the dates that you are in New York City. Hold onto receipts that can back up your claims, like airline tickets and restaurant bills. Make sure you are registered to vote in New York City and that you describe yourself as a New York City resident on your taxes. “But remember, you are entitled to live your life,” Ms. Crumiller said. “And it’s not necessary to go crazy trying to change your life around the specter of a lawsuit.”
A Green Co-op Board
About 10 days before the scheduled closing of our co-op apartment with a board-approved buyer, our lawyer received a memo from the managing agent saying shares could not transfer to the buyer unless we installed a low-flow toilet, added aerators on the faucets and installed Energy Star appliances. The toilet requirement was referenced in board minutes from February 2013, but the Energy Star appliances were not. None of this was in the sales application, and we received no advance notification. These alterations will cost us thousands of dollars and delay our closing. Can the board do this?
Upper East Side, Manhattan
A co-op board is allowed to enact policies that require shareholders to invest in costly new appliances and fixtures. But it is supposed to inform the shareholders of such changes and treat all shareholders equally when enforcing rules. It is possible that the board passed such a rule after you signed a contract with the buyer but before you closed on the apartment. Although the board would be allowed to force you to comply if it followed protocol, it strikes me as insensitive and tone-deaf to the inconvenience that might cause you.
“It was bad form for the board to change the rules for this transaction after the prospective purchaser was approved,” said Steven R. Wagner, a lawyer who represents condominium and co-op boards. “It is not, however, illegal if they did it correctly.”
If the board did not inform shareholders about the Energy Star appliance requirement, or did not pass the measure properly in an official board meeting, you would have reason to contest the requirement. Ask the managing agent when the rule was passed and when shareholders were informed about it. “The managing agent cannot just make things up,” Mr. Wagner said.
If you are ultimately responsible for the upgrades, see if a speedier solution might be possible to avoid delaying the closing. If the buyer plans to remodel the bathroom, for example, it might not make sense to replace the toilet now anyway. The co-op might allow you to put money in an escrow account so the buyer can do the work at a later, more convenient date.
Profits for a Co-op President
A few years ago two shareholders in my co-op foreclosed on their apartments, and the bank sold them for a fraction of their worth. The co-op bought one of the apartments and the board president at the time bought the other, without informing other shareholders of the bank sale. This president continues to sublet the apartment and earn a profit from doing so. Is this prohibited by law?
Upper East Side, Manhattan
The board president might not have broken the law, but it certainly sounds as if he broke your trust. Just like any shareholder, the board president is allowed to bid on an apartment that is for sale from foreclosure. But as board president, he was privy to exclusive information about the sale. To even the playing field, a notice about the sale should have been posted in a place where other shareholders could be informed about the listing, like the elevator.
“By not letting other shareholders know about it, some shareholders might claim that that board member has breached his fiduciary duties,” said Steven D. Sladkus, a lawyer who represents condominium and co-op boards in Manhattan.
What is your recourse? If you sued for breach of fiduciary duty, for example, you would have to prove that you suffered damages, and that might be a difficult hurdle. But he has sullied the trust of shareholders, and that might come to haunt him at a future election.