Michael P. Kozek's Interview On Loft Law

In a recent broadcasting for Bushwick's Bel-Air radio station called "Loft Law & Order," Michael P. Kozek explains how his personal interest in Loft Law developed, and discusses the prominent legal issues and potential remedies surrounding Loft Law. Check out the full interview: http://giothewriter.com/loftlaw/

Recent Supreme Court Decision Gives A Co-Tenant A Means Of Compelling A Noncontributing Co-Tenant To Pay Rent

A long frustrating problem that co-tenants have faced is what to do if their co-tenant/roommate refuses to pay their portion of the rent for an apartment.  If two co-tenants share an apartment, and one bails on the rent, the other remains liable for the entire rent, and is faced with the unenviable decision of whether to refuse to pay the non-paying co-tenant’s rent and face eviction for nonpayment of rent, or to simply pay up and hope that the co-tenant reimburses him or her.  The choice is necessary because the law is clear that co-tenants are jointly and severally liable for the entire rent.  Thus, whether one or both of the tenants pay the rent is not the landlord’s problem or responsibility.   According to a March 2014 decision by the Supreme Court, New York County, there is a solution to this problem.

In Stellweg v. Welch & N.H. Lyons, Inc., 2013 WL 6702832, 2012 N.Y. Slip. Op. 22157(U) (Trial Order) (Sup. Ct., NY Co.) the co-tenant/Plaintiff Stellweg, who by oral agreement with her co-tenant/Defendant Welch paid one-half of the rent on a shared apartment, was faced with this very issue.  Defendant Welch began to withhold such rent after being prohibited from entering the apartment by virtue of an order of protection from the New York City Criminal Court.  Stellweg commenced an action in the Supreme Court, New York County, seeking to partition her co-tenancy interest from that of Defendant Welch, and additionally named the owner as a defendant.  The owner commenced a separate proceeding in housing court seeking to evict Stellweg and Welch for nonpayment of rent.  That summary nonpayment eviction proceeding was consolidated with the Supreme Court action on Stellweg’s motion, which was granted on the condition that Stellweg pay Welch’s arrears.  Stellweg thereafter moved to recover such monies from Welch and to compel Welch to pay his half of the rent on an ongoing basis.   

The Court (Hon. Anil C. Singh, J.S.C.) granted Stellweg’s motion, holding that an implied in law contract existed between the co-tenants and that each tenant had “an unambiguous legal obligation to pay rent.”  Generally, a contract is void unless it is both in writing and signed by the parties to be bound.  N.Y. Gen. Oblig. Section 5-701(a).  Notwithstanding, a contract may be implied, either in law or in fact.  22A N.Y.Jur.2d Contracts Section 522.  A contract implied in law is “an equitable cause of action premised upon unjust enrichment, which is founded not on a contract or agreement but rather on an obligation that the law creates in the absence of an agreement when one party possesses what in equity and good conscience the party ought not to retain and that belongs to another.”  Id.

 In Stellweg, the Court determined that, as a matter of equity, it would be “unjust to relieve [the co-tenant] of his obligation to pay his share of the back rent and his obligation to pay one-half of the rent going forward.” The co-tenant was prohibited from entering the premises completely due to his own wrongdoing.  Moreover, the occupying co-tenant was already physically harmed by the co-tenant, and to be, in addition, financially harmed would not be an equitable outcome.

The Court explained that “an implied contract of this nature makes it possible for [an occupying tenant] to remain in the loft, while preserving [an excluded tenant’s] right to return to the loft when the Order of Protection expires.”  Thus, despite the fact that the co-tenant was not residing in the apartment, the Court held that he was still liable for rent that accumulated during such time.

This decision is a recent success for tenants who have been unjustly deprived of their co-tenant’s rent contribution.  Ms. Stellweg was represented by your author’s firm, Ween & Kozek, LLP.

-Written by Michael P. Kozek and Jessica L. Drury

Mayor de Blasio’s Decision to Increase the Income Threshold for the Senior Citizen Rent Increase Exemption Program will Benefit Numerous Additional Seniors Residing in NYC.

Senior Citizen Rent Increase Exemption (SCRIE), a program administered by the NYC Department of Finance, provides protection from rent increases for low-to-moderate income seniors living in NYC  rent-regulated apartments.  On July 1, 2014, the number of senior citizens eligible to apply for SCRIE will substantially increase.

The increase is the result of Mayor de Blasio’s recent decision to sign legislation increasing the household income eligibility cap from $29,000 to $50,000. If a tenant qualifies for SCRIE, his monthly rent will be frozen at its current level and be exempt from future rent increases. In addition, the City of New York will give the qualifying tenant’s landlord a property tax credit which is equal to the amount of the qualifying tenant’s future rent increases. 

In addition to the income eligibility condition, five additional requirements must be met: (1) the tenant must be at least sixty-two years old; (2) the apartment must be rent controlled, rent stabilized, or hotel stabilized; (3) the tenant must be named on the lease or the rent order or have been granted succession rights to the apartment; (4) the tenant must live in the apartment as his primary residence; and (5) the tenant must spend more than one-third of his monthly household income on rent.

            If the tenant is approved, the tenant will receive an approval letter with the amount of the tenant’s “frozen rent,” the amount the Department of Finance will be crediting the tenant’s landlord (Tax Abatement Credit, commonly referred to as TAC), and when the tenant’s SCRIE benefit period begins and ends.  The tenant’s landlord will also receive an approval letter.

If it takes a few months for the SCRIE unit to approve the tenant’s SCRIE application, the landlord will receive a retroactive SCRIE credit, which is required to be credited to the tenant for the rent payments made by the tenant.  For example, if the SCRIE unit receives the tenant’s application on May 15, 2014, but does not approve the application until August 15, 2014, then the tenant’s SCRIE benefit starts on June 1, 2014.  If the tenant’s application is denied, the tenant can fill out an appeal form and send it back to the SCRIE unit, however, the appeal must be postmarked no later than sixty days from the date of the denial letter.

            If the tenant is approved, the approval letter will indicate when the tenant’s SCRIE benefit period ends.  The landlord is legally required to continue the tenant’s SCRIE benefit for six months after the tenant’s SCRIE benefit expires, even if the tenant is not yet renewed.  If the tenant wishes to continue the SCRIE benefit after the end date, the tenant must submit a renewal application form.  If the SCRIE unit does not receive the renewal application form before the end of the six-month grace period, the tenant must start the process anew and submit the SCRIE Initial Application form.

The SCRIE Initial Application form can be found at nyc.gov/finance.  The application and all the required documents should be mailed to the following address:  New York City Department of Finance, SCRIE Unit, 59 Maiden Lane, 22^nd Floor, New York, New York 10038.

Written by Michael Kozek and Jessica Drury