Friday, March 11, 2011

$99/week Apartment on Upper West Side

As a former New Yorker, I tend to read stories like this with a mix of envy and disgust at the bizarre quirks in NYC landlord-tenant law.

On the other hand, as a current resident of central PA, I'm glad that I live somewhere with a better price per square foot.  There aren't that many places where that price for that place would be a good deal.

Ben Barros

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March 11, 2011 in Landlord-Tenant | Permalink | Comments (1) | TrackBack (0)

Tuesday, January 18, 2011

Anyone Need a Leaseholds Exam Question?

Cause I gotta beauty for ya, right here.

The New York Times reports that real estate developers have made such a visually appealing $80 million alteration to the facade and entrance of 112 West 34th Street in Manhattan that they are candidates for a prestigious development award.

The problem: they are tenants, not owners of the building, and the 1963 lease that the then-owners and then-tenants signed (both current owners and tenants are assignees) provides that the tenants must get prior written approval from the owner before making structural changes worth more than $100,000.  As a result, the owner wants the lease terminated and the tenants out.  The lease isn't supposed to expire until 2077.

Why on earth would a landlord object to a tenant making -- at its own expense -- $80 million dollars worth of awarding-winning improvements to a property, you ask?

Because the lease provides that the annual rent for the property is $840,000 per year.  This, for a 26-story building that sits across from Macy's.  This, for a building the tenants lease out to office and retail tenants for many, many times that sum.

So are the owners being unfairly opportunistic in trying to terminate a lease so they can capture the building's increase in market value?  Or are the tenants being hypocritical in arguing that a literal reading of the lease applies to the rent, but not the alterations clause?  How will a court likely decide the issue and why, or is it more likely that a market solution will be found, and how?

Life doesn't throw perfect hypotheticals at us very often.  Take it!

Mark A. Edwards

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January 18, 2011 in Landlord-Tenant, Teaching | Permalink | Comments (1) | TrackBack (0)

Wednesday, September 22, 2010

A Squatter in the Empire State Building

There is a short article in yesterday's New York Times that provides an interesting landlord/tenant issue for students to unravel.

Landlord leased an office suite in the Empire State Building to a mortgage broker.  Mortgage broker (apparently contrary to the terms of the lease) sub-leased a portion of the space to a law firm.  Law firm, through no written agreement, arranged for a solo practitioner to use "an alcove."  The attorney had keys to the suite and a building-issued security ID.

Mortgage broker defaulted on the lease and landlord pursued eviction proceedings.  Everyone but the solo practitioner left.  It apparently took the landlord seven months to officially notice that the solo practitioner was still there.

So question #1 would be to try to characterize the legal status of the solo practitioner both before and after the eviction of the mortgage broker. 

But the other interesting aspect of the article is that the lawyer didn't think he did anything wrong. 

Mr. Perlman said he did not consider himself a squatter or law-breaker. Yet he had no sympathy for the building’s management, which he complained had been trying to push out small tenants to make way for larger tenants. The mortgage broker was one of several small tenants that sued the Empire State Building over their electricity bills. “I didn’t think of it as a scam,” Mr. Perlman said. “If I’m guilty of anything, I’m guilty of procrastinating.”

Perhaps I represented landlords for too long, but I find it striking that an attorney can think that he can take something of value (possession of space in the Empire State Building) for seven months without paying the owner a dime and then think that he has done nothing wrong. 


Tanya Marsh

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September 22, 2010 in Landlord-Tenant | Permalink | Comments (3) | TrackBack (0)

Thursday, August 19, 2010

Bed Bugs -- Ick!

I love the Diane Rehm show, but I just listened to a very disturbing installment regarding bed bugs.  Apparently they are on the rise, particularly in New York City, although several people called in from Cincy, Kansas City, and other larger cities reporting they had problems.  It is also a big issue in college dorms.

A few key points:

1.  They are very difficult to get rid of.

2.  They are very easy to transmit from place to place, including from hotel room to home and from unit to unit in a multi-family development.

3.  They are difficult to detect unless you know what the signs are.

4.  They don't really like mattresses.  They don't like light, so they hide in crevices, clutter, behind pictures, baseboards, etc.

Of course, I think this has all kinds of interesting Property implications.  For example, should states require disclosure of bed bugs along with roof leaks and other latent defects in home sales?  Should landlords be required to disclose bed bugs to tenants?  Should tenants be required to tell their landlords if they have bed bugs in order to prevent transmission to adjoining units? 

I am suddenly very itchy.

Tanya Marsh

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August 19, 2010 in Landlord-Tenant, Nuisance | Permalink | Comments (2) | TrackBack (0)

Monday, June 21, 2010

Requiring a License to Rent in Fremont, Nebraska

Finally, an issue upon which The Huffington Post and the Daily Paul agree:  the "license to rent" ordinance being considered by the voters in Fremont, Nebraska today is a bad idea.  Designed to combat illegal immigrants, the ordinance would require verification of citizenship or residency status to: (1) rent residential real estate; and (2) to obtain employment.  The sample ballot and text of the proposed ordinance can be found here

According to an article in last Thursday's Fremont Tribune, the proposed ordinance would require anyone over the age of 18 to obtain an "occupancy license."  Current residents of rental properties would not be required to get a license until they change addresses.  If a child turned 18 while living in a rental property, they would also be required to obtain a license.  The ordinance would also apply to new residents in assisted-living facilities and nursing homes.

To obtain a license, a person would complete an application and pay a $5 fee to the Fremont Police Department.  The applications would require the prospective renter to verify his or her citizenship or residency status.  Those unable to verify their status would be denied an occupancy license.

Fremont, a town of approximately 25,000 residents located 20 minutes northwest of Omaha, seems an unlikely hotspot in the illegal immigration debate.  The homepage for the city calls it "livable and progressive."  However, two of the main employers in the area are meatpacking plants owned by Freemont Beef and Hormel.  Slaughterhouses and meatpacking plants throughout the Plains states are chiefly manned by immigrants, frankly because the jobs are so dangerous, disgusting, and low-paying that they are difficult to fill with people who have more options.  According to Huffington Post, attracted by those jobs, the number of Hispanic people living in Fremont rocketed from 165 in 1990 to 2,060 in 2009. 

Beyond the obvious issues related to racial profiling and discrimination, this proposed ordinance could have devastating practical consequences if it were uniformly enforced.  (And of course, if it isn't uniformly enforced, the racial profiling/discrimination issues just get worse.)  For example, read the perspective of a nursing home administrator in Fremont hereWhat other uses will the Fremont Police Department make of the applications?

The good news -- if the ordinance passes today's vote, the ACLU of Nebraska is considering filing an immediate injunction to prevent its enforcement.  

I love Nebraska – my mother's hometown is 10 minutes south of Fremont and I've been there many times – but I agree with both the Huffington Post and the Daily Paul.  This proposed ordinance is a mind-bogglingly bad idea.

Update:  The Fremont Tribune reported on June 22nd that the ordinance passed 57% to 43%. 

Tanya Marsh

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June 21, 2010 in Landlord-Tenant | Permalink | Comments (0) | TrackBack (0)

Friday, May 21, 2010

Rodriguez-Dod on Protecting Tenants from Foreclosure Evictions

Eloisa C. Rodriguez-Dod (Nova Southeastern) has posted Stop Shutting the Door on Renters: Protecting Tenants from Foreclosure Evictions on SSRN.  Here's the abstract:

This article discusses existing and proposed federal and state law affecting tenants’ rights in foreclosure. As “Foreclosure” signs rapidly join “For Sale” signs across the country, the national foreclosure crisis has not only displaced homeowners, but a plethora of renters as well. The approach taken by states concerning tenants affected by foreclosure varies greatly. Furthermore, a recently enacted federal law, created specifically to help tenants in foreclosure, does not relieve the uncertainty in resolving this issue. In addition to being the first to critique the new federal law, this article offers recommendations for legislation that may better protect tenants from foreclosure-related evictions.

Ben Barros

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May 21, 2010 in Landlord-Tenant, Mortgage Crisis, Real Estate Finance, Real Estate Transactions, Recent Scholarship | Permalink | Comments (1) | TrackBack (0)

Tuesday, April 20, 2010

Sandercock and Lebovits on NY Landlord-Tenant Law

Margaret B. Sandercock and Gerald Lebovits (St. John's) have posted New York Residential Landlord-Tenant Law 101 for the Transactional Attorney on SSRN.  Here's the to-the-point abstract:

This article discusses the basics of New York residential landlord-tenant law for the transactional attorney.

Ben Barros

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April 20, 2010 in Landlord-Tenant, Real Estate Transactions, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Thursday, April 1, 2010

Chase on Rethinking the Homeownership Society

Arlo M. Chase (Brooklyn) has posted Rethinking the Homeownership Society: Rental Stability Alternative on SSRN.  Here's the abstract:

This paper radically challenges two of the dominant theories about housing policy: (a) that promoting homeownership is the best way to achieve household and neighborhood stability; and (b) that rent regulation has no place in competitive and thriving rental markets.

I argue that our national housing policy has failed by overemphasizing and over-subsidizing homeownership and by neglecting the rental market. These policies have not served the purported goals of individual and community stability. Indeed, over-subsidizing homeownership and home borrowing incentivized millions of households to overstretch their budgets in order to purchase homes, thereby contributing to the foreclosure crisis. The resulting housing instability has been further exacerbated by the failure of the rental markets to provide affordable and stable housing for low- and moderate-income households.

To address this increasingly untenable situation, I propose a rental stability program that would offer tenants an option for longer lease terms, rights to lease renewal, temporary regulation of rents, and federal rental subsidies to cover rent increases for rent-burdened low- and moderate-income households, while maintaining market-based incentives for owners to create new rental housing units and maintain existing ones. While my program takes pains to avoid many of the pitfalls of some “strict” rent regulation schemes, I do not shy away from the need to regulate rents for some finite period.
While they are not as dire as predicted by economists, I acknowledge that there are costs to rent regulation and my program is designed to minimize those costs. The specific consequences of rent regulation that often result, and that my proposal seeks to minimize, include: (i) the emergence of a “shadow” or “black” market for rental units; and (ii) incentives for landlords and tenants to litigate. My program would mitigate these and other unintended consequences by making the rent regulation time limited and subjecting all units in a jurisdiction to its purview. In the final assessment, states and localities considering my program would likely accept any small costs in market inefficiencies because of the gains achieved by increasing tenant stability.

Ben Barros

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April 1, 2010 in Home and Housing, Landlord-Tenant, Recent Scholarship | Permalink | Comments (0) | TrackBack (0)

Sunday, March 28, 2010

In New York, Roommates and Normatively Acceptable Deviance

The New York Times today ran a great piece ("In New York, Breaking the Law on Roommates") on a regulation that captures the dynamic between acceptable deviance and property rights quite well: limits on the number of roommates that can share an apartment.

As the article shows, illegal behavior with regard to roommates is normatively acceptable.  As one 'deviant' said, “to pack unrelated people in an apartment? I don’t think it’s wrong.  It’s part of New York City culture.” And as usual, enforcement tends to follow the limits of acceptable deviance rather than the law itself: according to the Times, the law is "little known, widely broken and infrequently enforced."

But as the article also shows, the predictable danger when behavior is illegal but normatively acceptable -- selective enforcement -- is lurking.  According to a former New York City housing commissioner, that city's regulation was enacted with a very specific target in mind: "sketchy single-room-occupancy buildings and their often equally sketchy inhabitants."

Mark Edwards

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March 28, 2010 in Home and Housing, Landlord-Tenant, Property Theory, Recent Scholarship | Permalink | Comments (2) | TrackBack (0)