Giachino Enterprises L.P. v. Inokuchi

7 Misc. 3d 738
CourtCivil Court of the City of New York
DecidedMarch 3, 2005
StatusPublished
Cited by2 cases

This text of 7 Misc. 3d 738 (Giachino Enterprises L.P. v. Inokuchi) is published on Counsel Stack Legal Research, covering Civil Court of the City of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Giachino Enterprises L.P. v. Inokuchi, 7 Misc. 3d 738 (N.Y. Super. Ct. 2005).

Opinion

OPINION OF THE COURT

Peter M. Wendt, J.

[739]*739Petitioner commenced the instant holdover summary proceeding seeking possession of the subject premises which are subject to the provisions of article 7-C of the Multiple Dwelling Law (commonly known as the Loft Law) on the ground that the respondent allegedly charged his former co-occupant or “roommate” rent in excess of that which he was lawfully permitted to charge. Petitioner argues that Rent Stabilization Code (9 NYCRR [RSC]) § 2525.7 (b), which prohibits tenants of rent-stabilized apartments from charging persons in occupancy pursuant to Real Property Law § 235-f (i.e., roommates) rent in excess of their proportionate share of the legal regulated rent, should be applied in this case. Petitioner argues that the Loft Law is in pari materia with the Rent Stabilization Law and regulations, and that therefore the above-referenced provision of the Rent Stabilization Code is applicable to the premises herein which is subject to the Loft Law.

Respondent, a tenant and resident of the subject premises for over 33 years, moves for dismissal pursuant to CPLR 3211 (a) (7) based on failure to state a cause of action and for summary judgment pursuant to CPLR 3212. Respondent contends that the prohibition against charging a co-occupant more than a proportional share of the rent contained in RSC § 2525.7 (b) does not apply to the subject premises, which is not a rent-stabilized apartment but is a loft covered by the Loft Law. Respondent contends that overcharging a roommate is not a valid ground to evict a tenant of a unit covered by the Loft Law.

Respondent concedes that another co-occupant, one Kahako Terakawa, occupied the apartment along with respondent for a period of over five months from February 20, 2004 until approximately July 31, 2004 and that respondent charged and collected from Ms. Terakawa an amount equal to the legal regulated monthly rent ($587.28) during that period. Respondent alleges that he subsequently refunded to Ms. Terakawa half of the rent collected from her, and provides copies of a cancelled check and receipt dated September 19, 2004 showing that he refunded a sum of $1,572.36 to Ms. Terakawa.

Respondent claims that he had not intended to live in the apartment with Ms. Terakawa, but had intended to sublet the apartment to her while he was on a planned trip to Japan. He claims that he decided to sublet the apartment because he needed someone to take care of his pet while he was away. He claims that this arrangement did not work out, that Ms. Terakawa turned out to be an unsuitable person to care for his pet. [740]*740Accordingly, respondent claims that he cancelled his trip to Japan. Respondent claims that he asked Ms. Terakawa to leave the apartment but she refused to do so and claimed that she was entitled to stay there for six months. He claims that she continued to pay and he continued to accept the monthly rent from her. Respondent claims he eventually served a termination notice on her and she moved out. Respondent claims that he did not know that he could not collect the full monthly rent from Ms. Terakawa, and when he learned of this he immediately refunded the money to her in order to protect his tenancy.

There is no provision in the Loft Law or regulations prohibiting the conduct respondent is accused of, i.e., charging a “roommate” rent in excess of the proportionate share of the legal rent. Neither is there any provision in the Loft Law or regulations giving the landlord a cause of action to evict a tenant for the conduct respondent is charged with. Landlord asks the court to manufacture a cause of action for eviction of a loft tenant for charging a co-occupant roommate rent in excess of her proportionate share of the lawful rent, although there is no basis in either the statute or any regulation providing for such a cause of action. There is simply no basis whatever for the landlord’s claimed cause of action.

While the Rent Stabilization Code was amended by the Division of Housing and Community Renewal (DHCR) in December 2000 to add RSC § 2525.7 (b), which prohibits rent-stabilized tenants from charging co-occupants more than a proportionate share of the legal rent, this section applies to rent-stabilized tenants but does not apply to units regulated by the Loft Law.

Certainly the DHCR could not have promulgated a regulation applicable to loft tenants because DHCR does not have jurisdiction over loft tenants. The court cannot and shall not rectify any perceived omission on the part of the Loft Board in not promulgating such a regulation. It simply did not do so. The court must presume it intentionally did not do so.

The Appellate Term, First Department, has declined to interpret RSC § 2525.7 (b) to provide a cause of action to evict a rent-controlled tenant for charging a roommate a disproportionate share of the legal rent. In 270 Riverside Dr., Inc. v Braun (4 Misc 3d 77 [App Term, 1st Dept 2004]), the court held that because there is no rent-control regulation parallel to RSC § 2525.7 (b) and, more critically, no rent-control provision authorizing eviction of rent-controlled tenants on this ground, the landlord did not have any basis to evict a rent-controlled tenant on this ground.

[741]*741The 270 Riverside Dr., Inc. v Braun decision noted that “[t]he restrictions against profiteering in sublet situations have traditionally not been applied to living arrangements involving roommates” (4 Misc 3d at 78-79, citing 520 E. 81st St. Assoc. v Roughton-Hester, 157 AD2d 199 [1st Dept 1990]). The court noted that prior to promulgation of ESC § 2525.7 (b) it was the firm rule of this department that “[t]here is no cause of action for rent profiteering with respect to a roommate.” (Id. at 79, quoting Handwerker v Ensley, 261 AD2d 190, 191 [1st Dept 1999].) The court held that, in light of this history, for charging a roommate a disproportionate rental amount to be a basis to evict a rent-controlled tenant, the governing regulations should affirmatively so state.

The Court in Roughton-Hester (decided before ESC § 2525.7 [b] was promulgated), based on the legislative history of the sublet and roommate laws, concluded that it should not extend to tenants who “rent” to roommates the restrictions against profiteering in sublet situations. The Court noted that, while the legislative history surrounding the sublet restrictions indicated an intent to eliminate speculation and profiteering in subletting arrangements, no such purpose was expressed in enacting the roommate law. The Court noted that the Legislature in enacting the roommate law criticized judicial decisions which refused to extend protection of the Human Eights Law to unrelated persons sharing a dwelling for “reasons of economy, safety and companionship.” (Roughton-Hester at 203.) Accordingly, the Court recognized that the “roommate law” was enacted to protect residential tenants from eviction because of their lifestyle.

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Bluebook (online)
7 Misc. 3d 738, Counsel Stack Legal Research, https://law.counselstack.com/opinion/giachino-enterprises-lp-v-inokuchi-nycivct-2005.