Amerifirst Mtge. Corp. v Green

[*1] Amerifirst Mtge. Corp. v Green 2005 NY Slip Op 50805(U) Decided on May 31, 2005 District Court Of Nassau County, First District Fairgrieve, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on May 31, 2005
District Court of Nassau County, First District

Amerifirst Mortgage Corp., Petitioner(s)

against

Tracy Green and AIDA CLAUDIO, Respondent(s)



SP 821/05

Scott Fairgrieve, J.

ISSUES

1.Was a breach of warranty of habitability shown by respondents?

2.Is the landlord entitled to back rent of $9,100.00?

3.Did the tenant make additional payments of $500.00 per month from October 2001 until April 2004, which were allegedly held in escrow by petitioner toward the purchase of the house?

BACKGROUND

The petition seeks rent from respondents in the amount of $9,000.00 for the period of June 1, 2004 until February 1, 2005. However, during trial, the petitioner testified that rent of $10,000.00 is owed, namely, $6,000.00 for the year 2004 and $4,000.00 for the year 2005; petitioners acknowledge receiving the sum of $900.00 which reduces the amount owed to $9,100.00.

Respondents contest the amount of rent due petitioner because of two issues which will be discussed in detail, but summarized as follows:

(a)breach of the warranty of habitability;

(b)petitioner owes respondents the sum of $15,500.00 which represents the sum of $500.00 per month, which respondents paid petitioner from October 2001 until April 2004 towards the purchase of the said premises.

[*2]

BREACH OF WARRANTY OF HABITABILITY

Respondents rented the premises located at 59 James L.L. Burell, Hempstead, New York, pursuant to a one year lease from October 1, 2001 ending October 2, 2002, for the yearly rent of $12,000.00 or $1,000.00 per month. The written lease was never extended and the respondents continued to occupy the premises as month-to-month tenants. However, even though the written terms of the lease were not formerly extended, the terms of the lease continue to govern the parties' relationship by virtue of the tenants continued occupancy of the premises. See, Lynch v. Savarese, 217 AD2d 648, 629 NYS2d 804 (App. Div. 1995).

Pursuant to paragraph 8 of the lease, tenant was required to perform as follows:

8.Repairs, alterations

Tenant must keep, and at the end of the Term return the Premises and all appliances, equipment, furniture, furnishings and other personal property clean and in good order and repair. Tenant is not responsible for ordinary wear and damage by the elements. If Tenant defaults, Landlord has the right to make repairs and charge Tenant the cost. The cost will be added rent. Tenant must not alter, decorate, change or add to the Premises.

Tenant claims that the boiler didn't perform properly and thus the premises suffered from lack of adequate heat.

Does this lease provision relieve the landlord from having to provide a working heating system or does Real Property Law § 235-b impose a non-delegable duty upon the landlord to provide a working heating system? There appears to be little, if any, written analysis on this issue of the effect of a lease provision on the duty of a landlord to comply with the provisions of Real Property Law § 235-b which states as follows:

In every written or oral lease or rental agreement for residential premises the landlord or lessor shall be deemed to covenant and warrant that the premises so leased or rented and all areas used in connection therewith in common with other tenants or residents are fit for human habitation and for the uses reasonably intended by the parties and that the occupants of such premises shall not be subjected to any conditions which would be dangerous, hazardous or detrimental to their life, health or safety. When any such condition has been caused by the misconduct of the tenant or lessee or persons under his discretion or control, it shall not constitute a breach of such covenants and warranties.

Pursuant to Real Property Law § 235-b, landlords "impliedly warrant that the living quarters will possess those essential features and services which a residence is reasonably expected to provide." See, Finkelstein & Lucas, Landlord and Tenant Practice [*3]in New York § 10:70, at 10-32 (2002); Solow v. Wellner, 154 Misc2d 737, 595 NYS2d 619 (App. Term. 1992); aff'd as modified, 205 AD2d 339, 613 NYS2d 162 (App. Div. 1994), order aff'd, 86 NY2d 582, 635 NYS2d 132, 658 NE2d 1005 (1995).

In Solow, the Court of Appeals specifically stated that the warranty of habitability was to create an independent non-waivable uniform standard separate and apart from the lease terms:

The trial court's contrary interpretation, based on expectations arising from the terms of the lease, would make the statutory implied warranty or habitability coextensive with the parties' lease agreement. However, the statute's nonwaiver clause (Real Property Law § 235-b[2] indicates a legislative intent to insure the independence of the warranty of habitability from the specific terms of a lease. Moreover, as we noted in Park W. Mgt., section 235-b was intended to provide an objective, uniform standard for essential functions, while the trial court's standard creates an individualized subjective standard dependent on the specific terms of each lease. Furthermore, grafting the tenant's contractual rights onto the implied warranty would unnecessarily duplicate other legal and equitable remedies of the tenant (see, 3 Warren's Weed, New York Real Property, Leasing of Residential Property: Rights and Obligations of Landlords and Tenants §§ 6.03, 7.01 [4th ed]).

Similarly, in Park West Management Corp. v. Mitchell, 47 NY2d 316, 391 NE2d 1288, 418 NYS2d 310 (1979), the Court of Appeals explained that a warranty of habitability is essentially a sale of shelter with the following warranties:

A residential lease is now effectively deemed a sale of shelter and services by the landlord who impliedly warrants: first, that the premises are fit for human habitation; second, that the condition of the premises is in accord with the uses reasonably intended by the parties; and, third, that the tenants are not subjected to any conditions endangering or detrimental to their life, health or safety.

A residential lease is essentially a sale of shelter and necessarily encompasses those services which render the premises suitable for the purpose for which they are leased. To be sure, absent an express agreement to the contrary, a landlord is not required to ensure that the premises are in perfect or even aesthetically pleasing condition; he does warrant, however, that there are no conditions that materially affect the health and safety of tenants. For example, no one will dispute that health and safety are adversely affected by insect or rodent infestation, insufficient heat and plumbing facilities, significantly dangerous electrical outlets or wiring, inadequate sanitation facilities or similar services which constitute the essence of the modern dwelling unit. If, in the eyes of a reasonable person, defects in the dwelling deprive the tenant of those essential functions which a residence is expected to provide, a breach of the implied warrant of habitability has occurred.

Based upon the above, the failure to provide sufficient heat is a breach of the [*4]warranty of habitability. See also, Hurkin v. Mazzola, NYLJ, 6/2/78, at 6, col 1 (App. Term). The lease provision can't alter this nondelegable duty of the landlord.

In the case at bar, respondents properly asserted the breach of warranty as an affirmative defense and counterclaim to the non-payment action. See, Park West Management Corp. v. Mitchell, supra ; New York Eldonado v. Balson, NYLJ, 12/13/76, at 12, col 3 (App. Term.); Witherbee Court Associates v. Greene, 7 AD3d 699, 777 NYS2d 200 (App. Div. 2004) (holding that month-to-month tenant can claim breach of warranty of habitability).

The damages recoverable are the difference between the fair market value of the premises if the premises had been as warranted as measured by the rent reserved under the lease and the value of the premises during the breach. Park West Management Corp., supra . Expert testimony is not required to recover damages. See RPL 235-b. Oral notice of the alleged defective condition is sufficient. See Vanderhoff v. Casler, 91 AD2d 49, 458 NYS2d 289 (App. Div. 1983); See also Spatz v. Axelrod Management co., Inc., 165 Misc2d 759, 630 NYS2d 461 (Yonkers City Ct. 1995).

Robert Gray, the Building Inspector from the Village of Hempstead, testified that he inspected the said premises and observed the following conditions in the Notice of Violation, dated March 3, 2005:

Housing and Property Maintenance 78-7

- Kitchen - no cabinets; hole in wall and sink in disrepair

- Bathroom - no vanity, large hole in wall and tiles missing

- Hallway - no closet doors.

- Living Room - window inoperable and front door in disrepair.

Mr. Gray testified that these items were not safety and health issues. Thus the Court refuses to award any damages concerning same. See Bey v. Thomas, 166 Misc 3d 341, 633 NYS2d 95 (Mount Vernon City Ct. 1995); Aponte v. Santiago, 165 Misc2d 968, 630 NYS2d 869 (Civ. Ct. 1995); Cater v. Saunders, 2002 WL 31207219 (NY Dist. Ct. 2002).

However, this Court does credit the respondents testimony that a lack of heat condition existed during the winter of 2004 - 2005 and thus awards a 20% abatement in the rent due from the months of December, 2004 and January, February, March and April of 2005.

ISSUES OF PAYMENTS AND RENT OWED

This Court is faced with a very difficult issue of what rent is owed and the claim by the tenants that they paid $500.00 over and above the $1,000.00 rent toward the purchase of the house from petitioner. [*5]

The Court credits landlord's position that the total of $5,100.00 is owed for 2004 and that $4,000.00 is owed for 2005 making a total of $9,100.00. The $9,100.00 is subject to a 20% abatement or $200.00 for 5 months for a total of $1,000.00, making the amount owed the landlord the sum of $8,100.00. The evidence tends to support the landlord's position that an additional sum of $1,000.00 was not paid during the month of August, 2004, as claimed by respondents.

A more perplexing issue is whether respondents paid an additional $500.00 toward the purchase of the premises. By way of background, respondents testified that they had an agreement (oral) that they would pay the additional sum of $500.00 each and every month toward the purchase of the house and which sums were to be held in escrow by petitioner. Respondent stated that they were told the initial price of $165,000.00, but later the price increased to $279,000.00. Respondents never qualified for a mortgage because their credit score was too low. Respondents claim that petitioner, a mortgage broker, referred them to Acorn for a mortgage.

Petitioner denies receiving the $500.00 per month from tenants, and denies sending them for a mortgage. Thus, the parties present conflicting testimony which this Court must resolve.

Introduced into evidence is the letter dated April 19, 2004, on the letterhead of petitioner signed by its President Alexander A. Avello, Jr., which states:

To Whom It May Concern:

Please be advised that Tracy Green and Ida Claudio have been tenants at 59 James LL Burrell Avenue, Hempstead, New York, since October 1, 2001. Their current rent is $1,500.00/month, and tenant pays all utilities including heating. A review of our records indicates that all payments have been made in a timely manner.

If you need any further information, feel free to contact me at the office.

Petitioner testified that he kept records of payments made, but failed to produce these items at trial. Production of the petitioner's records was raised by this Court during trial, but petitioner declined to produce them. This Court draws an unfavorable inference against petitioner for failure to produce this evidence. See Bernstein v. Bernstein, 190 AD2d 626, 594 NYS2d 992 (App. Div. 1993); Gryphon Domestic VI, LLC v. APP Intern. Finance Co., B.V. 2005 WL 1160630, 2005 NY Slip Op 03957 (App. Div. 2005); Esterces & Associates v. Coastal Communications Corp., 271 AD2d 286, 707 NYS2d 62, 2000 NY Slip Op 03692 (App. Div. 2000); Gentle v. State , 4 Misc 3d 453, 778 NYS2d 660 (Ct. Cl. 2004).

Petitioner contends that the April 19, 2004 letter was written so that respondents could obtain welfare. Respondent strongly denied petitioner's testimony and stated that he has a good job working for the Transit Authority. Respondents contend that this letter [*6]was allegedly written so respondents could obtain a mortgage.

This Court credits respondents' position concerning this issue based upon the testimony and documents (or lack thereof). Thus, respondents are entitled to full refund of the $500.00 per month paid for a total of $15,500.00.

CONCLUSION

Respondents are entitled to judgment of $15,500.00, less rent owed of $8,100.00, equaling $7,400.00. Interest is awarded from May 1, 2004 on the $7,400.00 based upon the totality of the circumstances of this case.

So Ordered:

DISTRICT COURT JUDGE

Dated:

CC:Nassau/Suffolk Law Services, Committee Inc.

William D. Friedman, Esq.

SF/mp