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Lambert Houses Redevelopment Co. v. Jobi

[*1] Lambert Houses Redevelopment Co. v Jobi 2014 NY Slip Op 50819(U) Decided on May 23, 2014 Civil Court Of The City Of New York, Bronx County Vargas, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on May 23, 2014
Civil Court of the City of New York, Bronx County

Lambert Houses Redevelopment Co., Petitioner-Landlord,
Abiodun Jobi, Respondent-Tenant.

L & T 039411/2013

Javier E. Vargas, J.

Upon the foregoing papers and for the following reasons, the motion by Respondent Abiodun Jobi (“Tenant”) for, inter alia, leave to file an Amended Answer and for summary judgment dismissing the instant nonpayment proceeding, is granted, and the proceeding is hereby dismissed.

Since 2001, Tenant has resided in the subject Project-based Section 8 federally subsidized Department of Housing and Urban Development (“HUD”) building, known as the Lambert Houses East, located at 994 East 180th Street, Apt. 4F, in Bronx, New York, and owned by Petitioner Lambert Houses Redevelopment Co. (“Landlord”). Tenant, whose sole source of income is Public Assistance from the New York Department of Social Services, received a Section 8 Subsidy from the HUD Substantial Rehabilitation Program (see 42 USC 1437), and her share of the rent amounted to $312 per month as of her last recertification of March 1, 2012.

On November 1, 2012, Landlord allegedly personally served Tenant with the First Annual Recertification Reminder Notice reminding her of the need to recertify her family income and composition by March 1, 2013. The Second Recertification Reminder Notice was served upon Tenant on December 1, 2012. Finally, Landlord served by certified mail the Third Annual Reminder Notice/Notice of Termination to Tenant on January 2, 2013. Those Notices properly warned Tenant that her failure to recertify would permit Landlord to charge her the full market rent on the apartment of $1,423 per month, effective March 2013. Apparently, Landlord also served fourth, fifth and sixth Notices as well. Despite all these Notices, Tenant failed to recertify and her Section 8 Subsidy was terminated. Subsequently, on June 18, 2013, Landlord served Tenant with a Ten-Day Notice of Termination demanding $5,380 in rent arrears, which represented over four months of market rent in the amount of $1,423 per month. No payment was received by Landlord and Tenant did not vacate.

As a result, by Notice of Petition and Petition filed July 15, 2013, Landlord commenced [*2]the instant nonpayment summary proceeding to recover rent arrears of $6,803, which accrued following the termination of Tenant’s Section 8 Subsidy. Although the Petition describes the subject apartment as not subject to Rent Control or Rent Stabilization, but subject to the Section 8 HUD “Regulations governing Substantial Rehabilitation Program,” there is no allegation in the Petition regarding Tenant’s alleged lease violation by her failure to cooperate with the annual recertification requirements. On July 19, 2013, Tenant filed a pro se Answer only asserting that there were conditions in the apartment needing repairs.

However, she failed to appear and defaulted on the July 29, 2013 appearance date, and a Final Judgment was entered in favor of Landlord and against Tenant in the sum of $6,803. Thereafter, Tenant moved, pro se, to vacate the default Final Judgment. Pursuant to a Stipulation of Settlement dated August 13, 2013, Tenant’s motion to vacate was granted only to the extent of vacating the prior Judgment, and staying execution of the warrant to September 13, 2013 for Tenant to pay the new Final Judgment of rent arrears of $9,757. A warrant of eviction was subsequently issued on September 12, 2013. Two further Orders to Show Cause by the pro se Tenant resulted in Orders extending her period to pay arrears then amounting to $12,630, to November 30, 2013.

In the meantime, Tenant obtained counsel, the Legal Aid Society, which now moves, by Order to Show Cause dated February 18, 2014, for an order: (1) granting leave pursuant to CPLR 3025(b) to deem a proposed Amended Answer filed; (2) vacating all Judgments entered against Tenant because she was unlawfully charged the full contract rent without being properly represented and terminated from the Section 8 Program; (3) granting summary judgment pursuant to CPLR 3212(e) on the First Affirmative Defense dismissing the proceeding or, in the alternative, dismissing with prejudice those arrears that exceed the amount that can lawfully be charged as Tenant’s share of the rent; and (4) staying execution of the warrant of eviction to afford her time to pay any arrears so calculated. Tenant’s Amended Answer interposes as an Affirmative Defense that Landlord improperly terminated her Section 8 Subsidy in violation of the applicable HUD Handbook and Federal Law, and counterclaims for reasonable legal fees.

In support of her Motion, Tenant asserts that she entered into unadvisable and one-sided stipulations of settlement because she was unrepresented at the beginning stages of this proceeding. She additionally argues that Landlord’s three Recertification Reminder Notices and 30-day Termination Notice were not properly served upon her, and were deficient in that they did not set forth information required by HUD, specifically: the name and contact information and office hours of the person employed at Landlord’s property tasked with recertifying her. In opposition to the Motion, Landlord argues that it complied with the HUD Multifamily Occupancy Handbook by properly, timely and personally serving all the required Annual Recertification Reminder and Termination Notices upon Tenant and, indeed, that it went out of its way by serving additional fourth, fifth and sixth notices upon her, which she failed to heed. This Court is unconvinced.

“When the owner of Project-based Section 8 units commences a non-payment proceeding in Housing Court seeking a judgment for market rent based upon the suspension or termination of a Section 8 subsidy, Housing Court has jurisdiction to determine the propriety of the subsidy termination or suspension and the market rent charges” (East Harlem Pilot Block Bldg. 1 HDFC v Cordero, 196 Misc 2d 36, 39 [Civ Ct 2003, Acosta, J.]; see 1199 Hous. Corp. v McCartney, [*3]171 Misc 2d 239 [AT 1st Dept 1997]). In order to impose penalties on a tenant for failing to recertify her Section 8 Subsidy, an owner must provide her with a number of very detailed notices by very specific deadlines as mandated by the applicable HUD Regulations and Handbook (see Starrett City, Inc. v Brownlee, 22 Misc 3d 38 [AT 2nd & 11th 2008]; Lambert Houses Redevelopment Co. v Huff, 35 Misc 3d 1215[A], 2012 NY Slip Op 50709[U]; [Civ Ct 2012]). The HUD regulations define exactly what information must be included in each notice, detailing the annual recertification process for a Section 8 recipient’s eligibility, deadlines, and consequences of failing to recertify (see Clinton Towers Hous. Co. v Ryan, 26 Misc 3d 1229[A], *2, 2010 NY Slip Op 50305[U]; [Civ Ct 2010]). The failure to comply with these notice requirements invalidates any termination of a Section 8 Subsidy for failure to recertify, and bars collection of market rent from a tenant in a project-based subsidized apartment (see id.), thereby requiring dismissal of the proceeding (see Westbeth Corp. HDFC Inc. v Ramscale Prod., Inc., 37 Misc 3d 13, 15 [AT 1st 2012]).

Relevant to the instant proceeding, HUD Handbook 4350.3 Rev—1, Chapter 7, entitled: Recertification, Unit Transfers and Gross Rent Changes, requires an annual recertification for recipients and provides for a series of four notices apprising the tenant of, inter alia, the information needed, “the name of the staff person at the property to contact about scheduling a recertification interview, the contact information for this person, and how the contact should be made,” “the location, days, and office hours that property staff will be available for recertification interviews” (HUD Handbook, Ch 7, ¶ 7—7[B];[2];[b];[2], [3]), and “[s];pecify[ing]; the amount of rent the tenant will be required to pay if the tenant fails to provide the required recertification information by the recertification anniversary date” (id. at ¶ 7—7[B];[2];[b];[7], [B];[4];[b];[2]). These Notices must also be timely; for instance, the First Reminder Notice is required to be provided “at least 120 days prior to the recertification anniversary date” (id. at ¶ 7—7 [B];[2];[a]). If the tenant fails to respond to the First Reminder Notice within 30 days, the owner is required to provide a Second Reminder Notice to the tenant between 90 and 60 days before the anniversary date (id. at ¶ 7-7 [B]; [3]; [a]). If the tenant fails to respond to that Notice, the owner must send a Third Reminder Notice “no later than 60 days prior to the anniversary date” (id. at ¶ 7-7[B];[4];[a]; see Lower E. Side I Assoc. LLC v Estevez, 6 Misc 3d 632, 634 [Civ Ct 2004).

Applying these legal principles to the matter at bar, this Court finds that Tenant has sufficiently established good cause to vacate the Judgment and dismiss the proceeding as Landlord failed to comply with the Federal Regulations and HUD Handbook in terminating her Section 8 Subsidy. Initially, there is no evidence in the record that Landlord sent, or that Tenant received, the Initial Notice notifying her of the Upcoming Recertification on March 1, 2013. Although the subsequent three Reminder Notices properly instruct Tenant to mail all required documents for recertification to Lambert Houses’s address and state the consequences that would arise from her failure to do so, they all neglected to include some of the information required by the HUD Handbook. Specifically, the Notices fail to state the name of “the staff person at the property to contact about scheduling a recertification interview, the contact information for this person,” and do not “give the location, days, and office hours” during which the staff person would be available, as required by the HUD Handbook (id. at ¶¶ 7—7[B];[2];[b];[2], [3]; 7—7[B];[3];[b]; 7—7[B];[4];[b];[1]). Nor was the Third Reminder Notice, which properly declared that Tenant would be charged “market rent,” mailed in a timely fashion as it was mailed by [*4]certified mail on January 2, 2014, one day late from the required 60-days prior to the Recertification date (see Lower E. Side I Assoc. LLC v Estevez, 6 Misc 3d at 635).

Given the nature of the defects, this Court holds that there was an improper termination of Tenant’s Section 8 Subsidy. Such an improper termination bars the maintenance of this nonpayment proceeding to recover market rent from Tenant (see 1199 Housing Corp. v McCartney, 171 Misc 2d at 240). Consequently, since Tenant has sufficiently shown that she unadvisedly waived a substantial meritorious defense, her motion, insofar as it seeks to vacate all the Stipulations and the Final Judgment, and grant her leave to amend her Answer, is granted. Upon considering her Affirmative Defense, Tenant’s motion to dismiss the Petition, is also granted, and the proceeding is hereby dismissed. The foregoing constitutes the decision and order of the Court.E N T E R:

Dated: May 23, 2014

Bronx, New YorkJ.H.C.

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