PAYING RENT LATE FOR HABITUAL BREACH OF WARRANTABILITY

The tenants here did not owe any rent, only late fees--charged 31 of 34 times they paid rent late. And they did this intentionally to prod the landlord to get work done as the wood floor sagged, the bathroom was never properly fixed after the ceiling collapsed, and there was water damage and mold.

156 E. 37th St. LLC v. Eichner, NYLJ 2/20/19, Date filed: 2019-02-06, Court: Civil Court, New York, Judge: Judge Jack Stoller, Case Number: 63915/2018:

"New York State implies into every residential lease a warranty that the demised premises are habitable, RPL §235-b(1), and any purported modification of this warranty is void as a matter of public policy. RPL §235-b(2). “The only meaningful weapon a tenant has against a landlord for refusing to maintain the premises in a habitable condition is to withhold rent.” Semans Family Ltd. Pshp. v. Kennedy, 177 Misc 2d 345, 348 (Civ. Ct. NY Co. 1998), citing 520 E. 86th St., Inc. v. Leventritt, 127 Misc 2d 566, 570 (Civ. Ct. NY Co. 1985)(Saxe, J.). See Ansonia Assocs. v. Ansonia Residents’ Asso., 78 AD2d 211, 220 (1st Dept. 1980)(referring, in dicta, to a “right” to withhold rent), Whitby Operating Corp. v. Schleissner, 117 Misc 2d 794, 800 (S. Ct. NY Co. 1982).1 Respondents proved the persistence of ongoing conditions in the subject premises in need of repair, which Petitioner’s own rebuttal witness essentially corroborated, and Respondents proved, particularly by their unrebutted letters in evidence, that they intended to prompt Petitioner to repair the conditions by withholding rent, even if they eventually paid the monthly rent before Petitioner could commence a nonpayment proceeding.

A warranty of habitability defense implicates a “clear public policy interest.” Windy Acres Farm, Inc. v. Penepent, 40 Misc 3d 63, 64-65 (App. Term 2nd Dept. 2013). To the extent that terms of a landlord/tenant relationship impair the ability of a tenant to withhold rent, then, such terms impermissibly modify the statutory warranty of habitability, as follows:

The New York City Housing Authority may not administratively penalize a tenant who withholds rent to enforce the warranty of habitability. Law v. Franco, 180 Misc 2d 737 (S. Ct. Bronx Co. 1999);

While a landlord otherwise has a cause of action for a judgment against a tenant when a tenant’s nonpayment of rent compels the landlord to commence an excessive number of nonpayment proceedings, Adams Tower L.P. v. Richter, 186 Misc 2d 620, 621-22 (App. Term 1st Dept. 2000), bona fide habitability defenses that caused a tenant to withhold rent preclude an eviction on that ground. Chama Holding Corp. v. Taylor, 37 Misc 3d 70, 71 (App. Term 1st Dept. 2012), Hudson St. Equities v. Circhi, 9 Misc 3d 138(A)(App. Term 1st Dept. 2005), citing Bennett v. Mantis, N.Y.L.J., Sept. 13, 2000, at 22:1 (App. Term 1st Dept.), 31-67 Astoria Corp. v. Cabezas, 55 Misc 3d 132(A) (App. Term 2nd Dept. 2017), Time Equities Assocs. LLC v. McKenith, 2019 NY Slip Op. 50123(U), 4 (Civ. Ct. NY Co.), Wonforo Assocs. v. Maloof, 2002 NY Slip Op. 50316(U), 11 (Civ. Ct. NY Co.);

A conditional limitation providing for the forfeiture of a tenancy upon nonpayment of rent is void as against public policy as it deprives tenants of their right to interpose a breach of warranty of habitability claim. Windy Acres Farm, Inc., supra, 40 Misc 3d at 64-65, Reinozo v. Eskander, 2017 N.Y.L.J. LEXIS 2151, *4 (Civ. Ct. Queens Co.);

A landlord may not invoke a lease rider forfeiting a rent credit on nonpayment where the tenant has asserted a good-faith claim of breach of the warranty of habitability. 1461 Amsterdam Ave. LLC v. Carrasquillo, 2015 NY Slip Op. 30831(U), 3 (Civ. Ct. NY Co.);

A landlord may not maintain a holdover eviction proceeding on no alleged cause against an unregulated tenant in retaliation for the tenant withholding the rent to enforce the tenant’s “rights under the warranty of habitability….” Barr v. Huggins, 41 Misc 3d 605, 613 (Civ. Ct. Bronx Co. 2013).

A late fee clause in a lease does not per se offend public policy, and may give rise to a cause of action for a money judgment in a summary proceeding, Brusco v. Miller, 167 Misc 2d 54, 55-56 (App. Term 1st Dept. 1995), as Petitioner seeks herein. However, as applied in this matter, the late fee would penalize Respondents as Respondents withheld rent over repairs. Petitioner’s application of the late fees to these particular facts would therefore impermissibly modify the warranty of habitability just as readily as a conditional limitation or a lease rider forfeiting a rent credit would. Accordingly, the Court finds that the late fee clause, as applied herein, is unenforceable as a matter of public policy.

A separate ground for rendering purported late fees unenforceable is that 5 percent per month, or 60 percent per year, amounts to an excessive and usurious charge. Cleo Realty Assocs., L.P. v. Papagiannakis, 151 AD3d 418, 419 (1st Dept. 2017).

Finally, although Petitioner charged a monthly rent at a so-called “holdover rate” after the expiration of Respondents’ most recent lease and before Respondents vacated, the lease in evidence does not entitle Petitioner to that relief.

Without the late fees and the holdover rate, Respondents do not owe anything to Petitioner. The Court therefore dismisses this proceeding with prejudice."