City and state officials are concerned that a bankruptcy suit involving 444 East 13th Street will lead to bad precedent undermining rent stabilization laws. (Image Credit: Google Maps)
Government officials fear bad precedent could make it easier for landlords to bypass rent stabilization laws. On March 13, 2019, New York Attorney General Letitia James, the New York State Division of Housing and Community Renewal (NYSHCR) and the New York City Department of Housing Preservation and Development (HPD) announced that the State and City moved to join in an action in United States Bankruptcy Court for the Southern District of New York as part of a fight to protect tenants in rent-stabilized apartments. The owner of 444 East 13th Street, in the East Village section of Manhattan, applied to reject tenants’ leases.
444 East 13th Street has 16 rent-stabilized units. Tenants had been withholding rent for months claiming the landlord failed to make necessary repairs and maintenance, including inadequate heat, plumbing issues, and sanitation problems with trash in the hallways and rodents. According to Council Member Carlina Rivera, the owner of 444 East 13th Street has harassed tenants in the past.
The owner of the building filed for bankruptcy and claimed that it should now be able to reject the tenants’ leases due to the bankruptcy proceedings. In a joint intervention motion filed in court, the City and State argue that the landlord’s claim was just an attempt to circumvent state protections for rent-stabilized tenants, including the tenants’ right to withhold rent if an apartment is uninhabitable. The City and State are concerned that if the Bankruptcy court allowed the landlord to reject the tenants’ leases, it would set bad precedent that would undermine rent stabilization law and encourage other landlords to file for bankruptcy as well.
Attorney General Letitia James stated “Bankruptcy Court should not be used as a tool to unjustly oust rent-stabilized New Yorkers from their homes. In filing this motion, my office is working to ensure that the tenants are not displaced. Housing is a right, and we will continue to use every legal tool available to stand up for tenants and to enforce their rights.”
NYSHCR Commissioner RuthAnne Visnauskas stated “New Yorkers have a right to live in safe homes free from harassment. We are proud to join our partners in standing up for these tenants against a landlord who is trying to take advantage of bankruptcy proceedings to cancel their regulated, affordable leases and dodge State law in the process. We cannot allow these proceedings to set a precedent that would undermine the rights of millions of New Yorkers.”
HPD Commissioner Maria Torres-Springer stated, “This administration remains unwavering in its commitment to stop tenant harassment in its tracks, and today we’re letting bad landlords know that we will not tolerate any attempt to displace our city’s hard-working families. This alarming and blatant end-run on the protections of our rent stabilization laws will not stand.”
By: Veronica Rose (Veronica is the CityLaw Fellow and a New York Law School Graduate, Class of 2018.)