Court rules rent-controlled units are not distributable assets in divorce

June 21, 2012 08:30AM

The law just got a little bit murkier for divorced couples fighting for control of valuable rent-controlled apartments in New York City. Reuters reported that a state appeals court ruled that those properties are not subject to typical marital distribution laws following a divorce. “A leasehold interest in a rental apartment, even one subject to the rent control law, which is not expected to be converted into a form of ownership such as a cooperative, is neither marital nor separate property as defined by the Domestic Relations Law,” Justice John Leventhal wrote in an unanimous opinion released on Wednesday.

Reversing a lower court’s ruling, the state appeals court found that the Supreme Court does have the authority to award possession of the apartment to one spouse or the other, but not under the Domestic Relations Law, which is typically used to split assets following a divorce.

The ruling comes from a case between Frank Cudar, who moved into a rent-controlled Staten Island apartment in 1960, and his wife, Elizabeth, whom he married in 1969. The pair divorced in 2006 and Elizabeth stayed in the home while Frank moved out. Frank sued to have Elizabeth evicted.

The Judges Ruled That A Richmond County Supereme Court justice should decide the fate of the apartment. [Reuters]