Court rules NYC landlords can’t seize rent-controlled units from bankrupt tenants

Ruling deems rent breaks a form of public assistance

TRD New York /
Mar.March 03, 2015 05:30 PM

In a boon to New York City tenants, the U.S. Court of Appeals for the Second Circuit has ruled that rent-controlled apartments cannot be taken from bankrupt occupants.

The decision makes official a November ruling by the New York State Court of Appeals. The court was asked to weigh in on the issue and ruled 5-2 that rent stabilization should be considered a form of public assistance that cannot be seized by a bankruptcy estate and sold off to a tenant’s creditors.

The case concerned a bankrupt woman whose landlord offered to buy her $700-per-month East Village apartment from the trustee; pay her $100,00 to move out; and pay her creditors in full, Bloomberg News reported. A federal district court initially ruled that this should be allowed, and that the rent-stabilized apartment should be considered property of the bankruptcy estate.

The decision Monday removes the threat that New York City tenants who file for bankruptcy will be evicted from their apartments even when they are currently paying rent. [Bloomberg News] — Tess Hofmann

 

Related Articles

arrow_forward_ios
Blackstone CEO Steven Schwartzman and Stuyvesant Town (Credit: Getty Images)

After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies

After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies
Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws

Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws

Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws
Real Capital Analytics data showed that New York’s multifamily market had a very slow July. (Credit: iStock)

New NYC rent law “beginning to shut down investment”

New NYC rent law “beginning to shut down investment”
(iStock)

New Yorkers’ exodus could unravel rent regulation

New Yorkers’ exodus could unravel rent regulation
2 Pierrepont Street in Brooklyn and Vincent Viola (Google Maps, Getty)

Ex-Trump nominee broke rent stabilization laws at his Brooklyn Heights building: lawsuit

Ex-Trump nominee broke rent stabilization laws at his Brooklyn Heights building: lawsuit
After the rent law of 2019 passed, multifamily market values plummeted. But tax assessments are unchanged (Credit: iStock)

Rent law dented property values – but not tax assessments

Rent law dented property values – but not tax assessments
The Court of Appeals ruled today that a portion of New York’s rent law violates due process. (Credit: iStock; UpstateNYer via Wikipedia Commons)

State’s highest court strikes down portion of rent law

State’s highest court strikes down portion of rent law
REBNY president James Whelan (Credit: Whelan by Evan Gutierrez)

NYC’s biggest landlords pledge to halt evictions for three months

NYC’s biggest landlords pledge to halt evictions for three months
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...