The Real Deal New York

A rent-stabilized lease cannot be seized in bankruptcy: court

The court ruled that a rent-stabilized apartment counts as a public benefit

November 21, 2014 08:01AM

U.S. Court of Appeals for the Second Circuit in Manhattan

U.S. Court of Appeals for the Second Circuit in Manhattan

A federal appeals court has decided that rent-stabilized leases do not count as assets that can be seized during bankruptcy proceedings.

The U.S. Court of Appeals for the Second Circuit reversed a lower court decision on Thursday, the New York Post reported. The decision could prevent New Yorkers in rent-regulated apartments from losing their homes during bankruptcy proceedings.

The ruling treated a rent-stabilized apartment like a public benefit akin to Medicare or Social Security, according to Capital New York.

The ruling is a victory for Mary Veronica Santiago-Monteverde, the appellant in the case, who filed for bankruptcy in 2011 after falling behind on payments following her husband’s death. She pays $703 a month for a two-bedroom apartment on East 7th Street, where she has lived since 1963, according to the Post. She owes $23,000, most of which is credit card debt.

Landlord JVG Management has agreed to pay Santiago-Monteverde’s debt and let her keep the apartment, where she lives with her son, for the rest of her life. In return, the landlord regained control of the lease, the newspaper reported.

Ira Herman, an attorney at Thompson & Knight told the newspaper that “this decision helps a lot of needy New Yorkers.” [NYP] and [Capital NY] — Claire Moses 

  • Bullied and Damaged by Rent Re

    Why was this even included in the lawsuit? She wasn’t sued by the landlord for unpaid rent, was she? It’s not like her debtors are going to seize the unit and move into it themselves.

    All this does is to PLANT the idea that rent regulated apartments are an inalienable right to tenants even if they can no longer pay their rent and invite more protenant legislation citing the EMOTIONAL propaganda of this case and not the facts.

    Lawmakers should instead establish guidelines for succession so not just anyone can bribe a departing tenant to claim them as roommates, adopted adult daughters/girlfriends to screw with the owner who solely pays the bills on this building and is fined when the tenants are never fined for breaking the rules – not even committing perjury and using free legal services.

    http://newyork.cbslocal.com/2014/03/25/woman-claims-right-to-rent-controlled-apartment-after-being-adopted-by-former-tenant/

    It means any apartment as long as it is regulated can eventually become legally occupied by anyone even if they are associated with murderers of the landlord.

    • Edward Johnson

      dude – enough of your comments – you just don’t understand the rules – you post all over this board and most of it is only half true.

      There are specific laws about succession – these laws are detailed and have been rigorously negotiated for years – there are also hundreds of case law judgements regarding the topic – it’s hard to imagine the rules could be more clear than they are.

      You’re idea that “it means any apartment as long as it is regulated can eventually become legally occupied by anyone” is complete idiocy.

      Again, stop posting, you’re hurting your own cause with your nonsense.

      • Bullied and Damaged by Rent Re
        • Monica McLaughlin

          In the Sushi case, the landlord failed to prove that the tenant did not live there more than half the year. To evict a tenant based upon non-primary residency, the landlord must prove his case. In the other case, the person who lived there for years who was adopted by the tenant before he died — the landlord withdrew the case on technicalities and plans to refil — so that case is irrelevant. And the 3rd case involves harassment of tenants by the landlord — it has nothing to do with succession rights. NONE of these cases regard an alleged murderer or are relevant to prove anything.

          • Bullied and Damaged by Rent Re

            In the Sushi Defense case, the neighbors had no problem committing perury on behalf of the tenant and the judge didn’t question the unbelievable claim of the defendant. So the landlord had to have deep enough pockets to go to appeal. That just shows that something so brazen and unbelievable is NOT criticized by Housing Court judges because the machinery for the tenants is too strong, govt and press coverage is too biased.

            If you have Gov Cuomo intervening not because of an act of violence like murder but because Marolda made the mistake of looking into people with the EXACT same names – then we have a big message that something is wrong. Meanwhile, if you don’t look, the Flying Monkeys contingent blame the owner – blame them for not getting them out so you can afford to run the building – blame them for getting them out of the building based on misbehavior like nonprimary residency (Kushner).

          • Bullied and Damaged by Rent Re

            http://www.nydailynews.com/news/politics/court-collective-action-rent-stabilized-tenants-article-1.2022859

            I don’t have the problem with righting wrongs BUT there is no interest in righting wrongs when the tenants who do not qualify for free legal representation based on salary are represented (they might have grown up on the same block as the tenant advocate) AND the tenants lied and I can prove it but I was shushed by the judge and my own attorney – if they lied and this didn’t need to cost me legal fees, shouldnt there be some kind of fine or reimbursement – especially when having free legal representation means they are given the license to damage the premises knowing how costly it would be for us and cost free for them to litigate?

            This is very corrupt – this refusal for BID, lawmakers, govt, and tenant advocates to empower but not police the conduct of rent regulated tenants. They don’t deserve succession rights ever. It’s 1 million of them and 7.4 million of us and they get special treatment and I don’t believe that we can do affordable housing and make everyone one of the one million rent regulated and the problem wiill be solved.

          • Bullied and Damaged by Rent Re

            And it’s just a loophole but still a travesty if the punitive damages are in the form of fines DESIGNED to accrue by making sure that court appearance notices are NOT received.

            That’s CORRUPTION.

            Especially when the tenant representative stood in front of the owner representative and took TWO business cards with the proper street address AND told the judge in front of the running tape recorder that she sent them to the lobby on purpose.

          • Monica McLaughlin

            You clearly hate being a landlord. Why not sell if you are so miserable? I can only assume it is because you are making decent money. I suggest you stop your non-stop whining.

          • Bullied and Damaged by Rent Re

            That’s your projection – not the reality. I don’t hate anything but I object to the bias re rent regulation. I have a right to argue against it and to point out clear discrepancies and dishonesty.

    • Monica McLaughlin

      There are well-established laws regarding succession. Get a 2-week free trial membership to this site and you can read the many cases for yourself. These are short summaries. https://www.landlordvtenant.com/

  • Sh!t My Tenants Say

    Public benefit? How ridiculous! From one private owner to one private tenant….

  • Allan

    Its a private owner being forced to give a public benefit to a private tenant.

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