RENT CREDIT WHEN APARTMENT IS NOT HABITABLE DUE TO LANDLORD NEGLIGENCE

Richardson v Akelius Real Estate Mgt. LLC 2021 NY Slip Op 50788(U) Decided on August 9, 2021 Civil Court Of The City Of New York, New York County Baron, J. :

"Claimant Kemberly L. Richardson brought this small claims action against Property Manager Akelius Real Estate Management LLC (Property Manager or Akelius) and 5504-301 E. 21st Manhattan LLC (Landlord) to recover $4,277.45 for being displaced from her apartment (premises) due to building negligence after her apartment was damaged during a rainstorm on August 22, 2019. At trial claimant amended her complaint to $3,150.01, representing the 34 days she had to stay in a temporary apartment, starting from September 5, 2019, at $113.16 per day, and accounting for $697.34 in rent and relocation credits she received from the Landlord.

Defendants concede that the building contractors failed to secure an opening in the roof before the rainstorm on the night of August 22, causing "tremendous" flooding in the building, and extensive water damage to claimant's apartment (tr at 59), which necessitated prolonged construction work to the premises and claimant's 34-day relocation to a vacant apartment in her building provided by the Landlord. Defendants acknowledge that overall it took 44 days from the initial damage to the claimant's apartment to fix the premises. In December 2019 defendants were further notified that there were problems with the quality of the construction work in the apartment.

Defendants argue, nonetheless, that rent credits of 18% for the 34-day time period claimant stayed in the temporary apartment sufficiently compensated claimant for the inconvenience of having her apartment destroyed by water in the middle of the night, the 44 days the apartment was damaged, and the claimant's necessary 34-day stay in the temporary apartment. Defendants argue that the provided apartment was superior to the premises. After trial, the Court awards $3,150.01 to the claimant, representing the full amount she seeks against the Landlord as discussed below. The Court dismisses the claim against the Property Manager.

TRIAL EVIDENCE

The claimant testified that she lived in her building for nearly twenty years before the [*2]incident. On August 22, 2019, around 2:30 in the morning (tr at 9, 67-68), claimant woke up to the "sound of rushing water" (tr at 9). When she turned on the light, she saw water "pouring down" the door frames and walls throughout her 607-square-foot one-bedroom apartment and water accumulating under plaster, forming bubbles on the walls and ceilings (tr at 9-10). Claimant's mattress, box spring, other belongings and furniture were full of water. Not knowing what was going on, claimant called the doorman, and was told that there was a leak in the roof and that "there was nothing that could be done" (tr at 10). She was further instructed to "just put out buckets and towels," which she did as she was "frantically trying to catch the water" (id.). Claimant spent the rest of the night moving furniture and doing "whatever [she] could do to minimize the damage" in her apartment (id.). A few hours later she called the building manager and the Property Manager. There was no testimony that anyone from the building management went to claimant's apartment to ascertain the situation after she called for help.

It is undisputed that there was extensive flooding in the building. Jacob Washington, the Property Manager for the building (tr at 47; exhibit 5), testified that the flood was "tremendous" as it rained significantly that night (tr at 59). He acknowledged that the building has a live-in handyman and an emergency line, which Mr. Washington believed was called on the night of the storm. Mr. Washington could not say what was going on in the penthouse above claimant's apartment; he did not remember if the penthouse called the emergency line. He claimed that from his experience "it's very likely that the water would have just been dripping behind the . . . exterior of the walls and [got] down to the [claimant's] apartment below without anyone noticing" (tr at 61). Mr. Washington further testified that management was not notified of the leak inside claimant's apartment until the next morning. That morning, Mr. Washington went to the building to "look at the leak damage in multiple . . . apartments" (tr at 59-60) and "found the hole that was left uncovered" by contractors that management no longer uses (tr at 61, 76). He acknowledged that in his years at Akelius, this was the "only major leak that occurred in this fashion" (tr at 76).

In an email dated August 26, 2019, a representative of the Property Manager emailed claimant, stating, inter alia, "I've spoken to my construction manager who has given me a timeline for the repair work that will be needed. The next steps for the leak are [w]ait for effected areas to dry = 1-2 weeks . . . [s]crape damaged areas, apply plaster, wait for plaster to dry = 3 hours + overnight dry . . . [s]and and apply second coat of plaster, wait for plaster to dry = 3 hours + overnight dry . . . [s]and and paint = 1 hour" (exhibit 5). Not "realiz[ing] the extent of what was going to lie ahead" (tr at 10), claimant stayed in the apartment, "sle[eping] on the dry side of the mattress" until August 27 (tr at 10, 70). According to Mr. Washington, claimant asked to stay in her apartment, and Akelius did not want to "force" her out (tr at 70). Claimant testified that on the evening of August 27 she learned that her father passed away and that she had to leave for Boston.

In an email dated August 30, 2019, Mr. Washington told claimant that the contractors could remove damaged plaster on September 3rd to speed up the drying process and that if claimant was not at home, the "onsite staff c[ould] give the contractors access" (exhibit 6). The email asked claimant to confirm access (id.). It is undisputed that claimant allowed access to her apartment. Mr. Washington acknowledged access confirmation in an email dated September 3rd (exhibit 17). Nevertheless, claimant testified that when she returned from her trip on September [*3]4th, "everything remained the same, as it was when [she] left on "August 27th" (tr at 11). The "previously white walls had turned brown from the water damage" (id.), and "[t]here was a strong smell of dampness" (tr at 12).

The evidence indicates that work began at some point on September 4th, because in an email dated September 4, at "4:20:06 PM," to Mr. Washington, claimant stated that the "crew just about finished the extensive scraping that needed to be done" and did a "good job cleaning up the incredible amount of white dust" (exhibit 10). Claimant testified that once the work in her apartment began "it was awful" and that she had "never seen anything like this" (tr at 14). The evidence shows substantial portions of plaster removed from walls and ceiling, piles of removed plaster and paint on the floor, cracked and separating plaster and paint on the walls, ceiling and doorways throughout the apartment, and personal belongings and furniture covered in plastic. In the email dated September 4, 2019, claimant reflected on the "mess" in the apartment and indicated that she was "not comfortable staying" there under the circumstances (exhibit 10). Defendants acknowledged at trial that "[i]t would have been inconvenient to stay in [the apartment] while work was done" (tr at 52). Claimant left her apartment in the evening to stay with her sister on the Upper West Side.

While on her way to her sister's, claimant received a call from management offering her a hotel room. No meal plan was offered. Claimant declined the hotel room because it lacked a kitchen. The Property Manager then offered claimant a vacant apartment in the same building where she lived. The apartment was unfurnished and was not cleaned. Claimant testified that she had to sweep and mop the apartment. The apartment also lacked any air conditioning, which affected claimant during "days of excessive heat" (tr at 14). Although management offered to have an air conditioner installed (exhibit 12), by that point the weather had cooled down, and claimant declined the offer. The unit's washer and dryer never worked and the common laundry in the basement area of the building was out of service as well. Although the temporary unit was overall a little larger—887 square feet—and had a slightly larger kitchen, while claimant's apartment was 607 square feet, the two bedrooms in the temporary apartment were smaller than the one bedroom in claimant's apartment. Claimant testified that she felt compelled to accept the offered vacant apartment because she "was happy [she] had a place to stay" (tr at 42). Defendants acknowledge that claimant repeatedly complained that she was uncomfortable staying in the provided apartment.

Mr. Washington testified that several units were available in the building, although he did not remember how many. Nevertheless, claimant was not offered any opportunity to select an apartment where she could stay while her unit was being worked on. Mr. Washington testified that the management team made "a collective decision" on which apartment was going to be offered to claimant although he did not remember whether it was him or the supervisor who had made that decision (tr at 63). In their opinion the apartment that was selected for the claimant was "above the market rate of [claimant's apartment]" (tr at 62-63).

Mr. Washington testified that he "assumed" it would have been apparent on September 4th that it was going to take longer than the initial 14-day timeframe provided on August 26th to fix the apartment (tr at 66). He acknowledged that the provided timeline "was not correct" (tr at 54), that "as the leak damage continued to dry, [defendants] realized that it was going to be more extensive than the initial timeframe provided" and that "the water took a very long time to dry" [*4](tr at 65). Mr. Washington further testified that the work took longer because they wanted to "finish the job properly" and "didn't want to rush to fit into a timeline that had been provided without the proper knowledge" (tr at 55).

It took 34 days for claimant to move back to her apartment on October 9, 2019 after she moved out on September 4th (exhibit 20; tr at 17). Mr. Washington testified that "[defendants] did understand what an inconvenience [being displaced] obviously was" for claimant (tr at 67). However, there was no testimony indicating that management attempted to use any specialized equipment, such as floor fans, to increase the air circulation inside claimant's apartment to speed up the drying process. Mr. Washington acknowledged that it was claimant who "was running the AC unit and opening windows" (tr at 65).

After the work was completed "portions of the walls . . . bubbl[ed] up" (tr at 16), as claimant notified the Landlord by email dated December 13, 2019 (exhibit 16). The photographs admitted at trial show extensive bubbling of paint on the walls, and a large crack in the ceiling with visibly separating paint and plaster, which, according to claimant, had just occurred the night before trial (tr at 45; exhibit 16).

It is undisputed that claimant's monthly rent for her leased apartment was $3,442.10 (exhibit A). The ledger indicates that she paid full rent of $3,442.10 for August, $4,603.00 in September, and $3,099.03 in October, totaling $11,144.13 (exhibit F), which is $817.83 more than if she had paid the contracted-for rent of $3,442.10 for those three months. Nonetheless, claimant only seeks reimbursement at the daily rental rate of $113.16 for the 34-day period she lived in the temporary apartment.

LAW

The crux of claimant's case is that she is seeking a rent credit in the form of money damages for being forced out of her apartment after it was destroyed by water, requiring extensive renovations that took a prolonged time period. A landlord is obligated to maintain a residential premises in habitable condition, and this duty cannot be delegated or waived (see Real Property Law § 235-b; Park W. Mgt. Corp. v Mitchell, 47 NY2d 316, 327 [1979]). This warranty of habitability, implied in every lease, extends to the "acts of third parties" (47 NY2d at 327). The landlord warrants that the "premises are fit for human habitation," that "the condition of the premises is in accord with the uses reasonably intended by the parties" and that the "tenants are not subjected to any conditions endangering or detrimental to their life, health or safety" (id. at 325). "The obligation of the tenant to pay rent is dependent upon the landlord's satisfactory maintenance of the premises in habitable condition" (id.).

A "violation of a housing code or sanitary regulation is not the exclusive determinant of whether there has been a breach" of the warranty (id. at 328). Although a landlord is "not required to ensure that the premises are in perfect or even aesthetically pleasing condition" (id.), "[i]f, in the eyes of a reasonable person, defects in the dwelling deprive the tenant of those essential functions which a residence is expected to provide, a breach of the implied warrant[y] of habitability has occurred" (id.).

In order for a tenant to recover for breach of the warranty of habitability, the landlord must have actual or constructive notice of the condition in need of repair (Matter of Moskowitz v Jorden, 27 AD3d 305, 306 [1st Dept 2006], lv dismissed 7 NY3d 783 [2006]; 386 Ft. Washington Realty LLC v Brenes, 46 Misc 3d 150[A], 2015 NY Slip Op 50286[U] [Sup Ct, App [*5]Term, 1st Dept 2015]; 1050 Tenants Corp. v Lapidus, 16 Misc 3d 70 [Sup Ct, App Term, 1st Dept 2007]; Wallace 18 LLC v Tucker, 66 Misc 3d 1209[A], *7 [Civ Ct, Bronx County 2020]).

The proper measure of damages for breach of the warranty "is the difference between the fair market value of the premises if they had been as warranted, as measured by the rent reserved under the lease, and the value of the premises during the period of the breach" (47 NY2d at 329). "The award may take the form of a sum of money awarded the tenant in a plenary action or a percentage reduction of the contracted-for rent as a setoff in [a] summary nonpayment proceeding" (id.). When determining damages, the Court must "weigh the severity of the violation and duration of the conditions giving rise to the breach as well as the effectiveness of steps taken by the landlord to abate those conditions" (id. at 330). Expert testimony is not required to determine the diminished market value of the dwelling (id.).

ANALYSIS

Although it is undisputed that the water damage to claimant's apartment occurred on the night of August 22, 2019, after a heavy rainstorm, claimant is only seeking damages for the time she had to stay in the temporary apartment while repairs were being made to her home. It is undisputed that this period encompassed 34 days, from September 5, 2019 to October 9, 2019. Claimant accounted for the two rent credits previously given by the Landlord and subtracted these amounts from the damages she is seeking. Defendants did not argue that they lacked actual or constructive notice of the conditions in the apartment, and the Court finds that claimant met her burden of establishing notice. Claimant testified that she contacted defendants during the rainstorm, and numerous emails were submitted showing ongoing correspondence between claimant and the Property Manager regarding the conditions and work in the apartment. The Court finds that petitioner established that the Landlord had notice of the conditions through its Property Manager (see Windemere Chateau, Inc. v Hirsch, 22 Misc 3d 1108[A], 2008 NY Slip Op 52614 [U], *4 [Civ Ct, NY County 2008][the landlord was on notice "through its agents"]).

The Court also finds that claimant established, by a preponderance of the evidence, that the conditions that persisted after August 22, 2019 breached the warranty of habitability. In a similar case involving "cascading" water from an above apartment, the Civil Court determined that the warranty had been breached, where repairs could not be made until walls had dried, property was damaged, and goods had to be packed and stored during the painting (Sargent Realtly Corp. v Vizzini, 101 Misc 2d 763 [Civ Ct, NY County 1979]). Although the Civil Court issued only a 50% abatement in that case, there was no indication that the tenant had relocated to another apartment. In a more recent case, the Civil Court granted a full rent abatement for the three months the tenant had granted the landlord access for repairs from water leaks and before the apartment was rendered habitable; it is not clear from that decision whether the tenant was living in the apartment during that time period (de Socio v 136 E. 56th St. Owners, Inc., 61 Misc 3d 1220[A], 2018 NY Slip Op 51623[U] [Civ Ct, NY County 2018]).

Here, claimant was displaced from her apartment while the repairs were being made, and the Court finds that the displacement was necessary given the small size of the apartment, the nature of the construction work that had to be performed, and the extensive time period the apartment was under construction. Given the necessary relocation, Mr. Washington's testimony that the defendants would have paid for a hotel for that time period, that the repairs took longer than anticipated due to no fault of claimant, that there are ongoing issues with water damage, and [*6]that claimant does not seek damages for the time she was living in the apartment after the storm (from August 22 to August 27), the Court finds that claimant is entitled to damages in the amount of $3,150.01 for the 34 days she had to stay in the temporary apartment.

The Court does not find any basis to hold the Property Manager liable. The renewal lease is between claimant and the Landlord, not the Property Manager (exhibit A) (tr at 80). As discussed above, the Landlord is obligated to maintain the premises in habitable condition and that duty is nondelegable (Park, 47 NY2d at 329).

Accordingly, the Court awards claimant $3,150.01 against the Landlord, 5504-301 E. 21st St. Manhattan LLC, with statutory interest from September 5, 2019, the date of the alleged breach (see CPLR 5001, 5004). The claim against the Property Manager, Akelius, is dismissed."