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Distributing the Assets of a Limited Liability Corporation
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In New York, Limited Liability Corporations (“LLC[s]”) are governed under the Limited Liability Company Law. LLCs have “perpetual existence” but may dissolve without judicial intervention as otherwise provided for in Limited Liability Company Law, §701. Nevertheless, upon the petition of a member, or someone acting on behalf of a member, a court may order a judicial dissolution of the LLC, but only “whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement,” as prescribed in Limited Liability Company Law §702. (Emphasis added).
Nevertheless, even where dissolution is permitted, the Limited Liability Company Law, unlike the Business Corporation Law (BCL) and the Partnership Law (PL), does not explicitly prescribe how LLC assets consisting in real property are to be distributed.
This article discusses the judicial hurdles which must first be overcome to achieve an LLC dissolution and how New York courts, in such cases, have determined the rules for distribution of the LLC’s assets. We have found scant appellate case law on the subject; so attorneys need to note how appellate courts may continue to develop the law in this area.
The Dissolution Hurdle
As held in In re 1545 Ocean Ave., LLC, 72 AD3d 121, 131, 893 NYS2d 590 (2d Dept. 2010), the seminal New York decision construing Limited Liability Company Law §702, an LLC member seeking dissolution of an LLC must first establish:
in the context of the terms of the operating agreement or articles of incorporation, that (1) the management of the entity is unable or unwilling to reasonably permit or promote the stated purpose of the entity to be realized or achieved, or (2) continuing the entity is financially unfeasible.
The first step in conducting a judicial inquiry into the dissolution of an LLC is to conduct an initial contract-based analysis. The court must examine the LLC’s operating agreement to determine whether on the facts presented, it would be reasonably practicable for the LLC to carry on its business as set forth in the operating agreement. See 1545 Ocean Ave., supra, 72 AD3d at 128.
Unlike Business Corporation Law §1001 (which provides for dissolution upon either a majority or two-thirds vote of all outstanding shares) and Partnership Law §§60 and 63 (which respectively provide for dissolution “upon a change in the relation of the partners” or where “circumstances render a dissolution equitable,” Limited Liability Company Law 702 has been construed by New York Courts to preclude dissolution even where circumstances demonstrate that dissolution would otherwise serve the LLC members’ best interests. See. e.g., Matter of Horning v. Horning Const., LLC, 12 Misc 3d 402, 413, 816 NYS2d 877(Sup Ct., Monroe Co., 2006).
Absent an operating agreement, a court may hold a hearing where evidence is proffered in order for the court to ascertain the primary purpose of the LLC and whether the LLC remains able to conduct a financially viable business operation. See Matter of In re Eight of Swords, LLC, 96 AD3d 839, 840 (2d Dept. 2012).
The Arbitration Hurdle
Moreover, an LLC member, who is dissatisfied with decisions made by the managing member, can be frustrated in seeking dissolution where the LLC’s operating agreement mandates arbitration to settle all disputes between the LLC’s members. In such cases, the member seeking dissolution foregoes the right to seek judicial intervention. See Matter of Cusimano v. Berita Realty, LLC, 103 AD3d 720, 721 (2d Dept. 2013).
However, where the parties are deadlocked on how to operate the LLC, and even where an arbitrator issues an adverse ruling against the party seeking dissolution, the losing member may still seek judicial relief, where there are “allegations [of breach of fiduciary duty] from which damages attributable to [defendant’s conduct] might be reasonably inferred.” See Korangy v. Malone, 161 AD3d 645, 78 NYS3d 303 (1st Dept. 2018).
Distribution of LLC Real Property Assets
Upon the grant of judicial dissolution under Limited Liability Company Law Section 702, the dissolved LLC must begin the process of winding up and file articles of dissolution under LLCL Section 705. See Matter of Spires v. Lighthouse Solutions, LLC, 4 Misc 3d 428, 438-39 (Sup Ct 2004).
Following the grant of judicial dissolution, the court that issued the order must direct the winding up of the LLC’s affairs. See LLCL §703. The issuing court has discretion to decide whether the members of the LLC will conduct the winding up, or, if the court deems necessary, to appoint a receiver or liquidating trustee. Id.Section 703(b) of the Limited Liability Company Law prescribes the following steps in conducting the winding up:
Upon dissolution of a limited liability company, the persons winding up the limited liability company’s affairs may, in the name of and for and on behalf of the limited liability company, prosecute and defend suits, whether civil, criminal or administrative, settle and close the limited liability company’s business, dispose of and convey the limited liability company’s property, discharge the limited liability company’s liabilities and distribute to the members any remaining assets of the limited liability company, all without affecting the liability of members including members participating in the winding up of the limited liability company’s affairs. (Emphasis added).
Following the winding up of an LLC, the liquidated assets must be distributed. Section 704 of the Limited Liability Company Law sets forth a specific “pecking order” in which the proceeds of the liquidated assets are to be distributed.
First, the proceeds of the liquidation must be used to satisfy any liabilities to creditors of the LLC.
Second, unless stated otherwise in the operating agreement, liabilities for distributions by member or former members are satisfied.
Finally, unless stated otherwise in the operating agreement, the members first receive the return of their capital contributions and secondly, whatever surplus is left, is distributed to the members proportionate to their membership interest.
However, the Limited Liability Company Law provides no statutory asset distribution mechanism for liquidation of the assets when dissolution of an LLC is permitted. Accordingly, where the judicial dissolution of an LLC is ordered, the court must “provide a mechanism for the liquidation and distribution of its assets[.]” Mizrahi v. Cohen, 38 Misc 3d 1213(A), 966 NYS2d 347 (Sup. Ct., Kings Co., 2013) (internal citations omitted).
Accordingly, courts have adopted various methods of liquidation to suit the facts and circumstances before them on a case by case basis.
In PFT Tech., LLC v. Wieser, 181 AD3d 836, 839 (2d Dept. 2020), the Court adopted a method it deemed “equitable,” holding that “Under the circumstances of this case, … the most equitable method of resolving the dispute among the principals of [the LLC] was to permit the majority members to buy out [the defendant’s] interest and to set the valuation date for that interest as…the day prior to the commencement of the action.”
Another method courts have employed during the winding up of an LLC is to order the public sale of real property. See In re 47th Road LLC, 54 Misc.3d 1217(A), 54 NYS3d 610 (Sup. Ct., Queens Co., 2017), where the court authorized the receiver to take possession of the apartment building and pay all debts, liabilities and expenses after the sale of the apartment building.
Mizrah, supra, illustrates another way in which a court used its discretion to exercise and apply principals of equity. In Mizrahi, the two LLC members initially made equal capital contributions into the LLC. Eventually, the contributions made by the plaintiff began to and continued to greatly exceed the contributions of the defendant.
The trial court determined that the capital contributions of the plaintiff, which were in excess of those of the defendant, were to be treated as loans by the plaintiff to the LLC. The operating agreement of the LLC provided that a member did not have a right upon dissolution to receive repayment of capital contributions.
On appeal the Second Department affirmed the finding of the lower court, but held that the lower court should have granted the plaintiff’s request allowing him to purchase the defendant’s interest in the LLC upon the dissolution.
The trial court had originally devised a plan whereby the members would submit a bid to the appointed trustee for the property, giving credit to each bidder of the amount owed by the LLC to him in outstanding loans. If no bids were received by a specified date, the trustee was to report the need for a public auction sale of property to the court and advertise the auction.
The Second Department noted that, although the Limited Liability Company Law does not authorize a buyout in dissolution, nevertheless, under certain circumstances, as in Mizrahi, a buyout is an appropriate equitable remedy upon dissolution. See also Lyons v. Salamone, 32 AD3d 757, 758 (1st Dept. 2006), where the court found “that it is an equitable method of liquidation to allow either party to bid the fair market value of the other party’s interest in the business, with the receiver directed to accept the highest legitimate bid.”
Conclusion
In sum, following a judicial dissolution of an LLC, courts have discretion in directing the winding up of the LLC and may opt to employ the use of an equitable remedy such as the private sale amongst the members of the dissolved LLC. PFT Tech, Lyons, and Misrahi, supra. Courts may also opt to allow an appointed receiver or trustee to execute the sale via a public auction or sale at fair market value. 47th Road, supra.
It is important, therefore, for attorneys to be familiar with all of the available ways in which courts are likely to order the winding up and distribution of an LLC’s real property assets upon dissolution.
In doing so, the attorney, whose client is most interested in either preserving an ownership interest in the LLC’s real property or in obtaining the maximum buyout recovery from the sale of the property, can plan how to best achieve the client’s objectives.
However, the more important lesson to be learned from this discussion is to be attentive to the “hurdle” issues noted above when drafting or negotiating LLC operating agreements.
1545 Ocean Ave., LLC, supra, makes it clear that the parties forming an LLC can avoid those “hurdles” when negotiating “the context of the terms of the operating agreement,” Id. In doing so, the parties can adopt terms similar to those prescribed in Business Corporation Law §1001 (which provides for dissolution upon either a majority or two-thirds vote of all outstanding shares) or in Partnership Law §§60 and 63 (which respectively provide for dissolution “upon a change in the relation of the partners” or where “circumstances render a dissolution equitable.”
Accordingly, whether or not the business of the LLC remains financially viable, or whether or not there is otherwise a “deadlock” between or among the LLC members, this need not preclude the dissolution and distribution of LLC assets; particularly the distribution ofthe LLC’s real estate assets.
In this way, where LLC assets consist of real property, the members of the LLC can adopt terms and conditions in their operating agreements which enable them, when irreconcilable differences emerge, to avoid mandatory arbitration, dissolve the LLC and, under RPAPL(1), partition ownership of the real estate. See Bailey and Desiderio, Rules on Partitioning Ownership Property Rights, New York Law Journal (April 16, 2022).
Attorneys on both sides of the negotiating table should want to seek the flexibility such terms would provide; because one cannot ever know, at the beginning of the business relationship, which of the parties will be most interested in having such flexibility available when the business relationship starts to sour and becomes intolerable.
Adam Leitman Bailey is the founding partner of Adam Leitman Bailey, P.C., and John M. Desiderio is partner and Chair of the firm’s Real Estate Litigation Group. Richard Trabosh, a second-year litigation extern attending the Maurice A. Deane School of Law at Hofstra University, assisted in the preparation of this article.
How To Win a Board Election
It may seem counterintuitive, but the person who wins a seat on their co-op or condo board is often not simply the most popular person to throw their hat into the ring. Before the votes are cast at the annual meeting, candidates eyeing board seats who are truly serious about serving their building community will have been actively preparing for months, if not almost a year in advance. Below are a few ideas and strategies Adam Leitman Bailey, P.C. has deployed to help shareholders win board seats for the last three decades.
The Proxy Vote
Besides the ballot itself, the proxy vote is the most important document in any board election. With a proxy, an owner can allow the candidate to vote on that owners’ behalf, or in their place if the owner cannot make the meeting. By giving someone your proxy vote, you authorize that proxy holder to vote for the candidate or candidates you have designated. If you have not designated a specific candidate, then your proxy holder can enter the meeting and vote for anyone he or she chooses. Obtaining either a quorum or 51% of shareholders’ in-person or by-proxy votes in a building is not automatic; meetings often need to be adjourned so necessary votes can be cast. And if a quorum cannot be reached, the existing board remains intact for another year—or until another election meeting is called. There are workarounds; an annual meeting can be adjourned to an alternate day for the purposes of achieving a quorum, and proxy votes count toward meeting the 51 percent needed. Indeed, many times proxies are used to satisfy quorum counts.
It’s important to recognize that a board candidate simply going door-to-door collecting proxies without any other campaign messaging about what he or she aims to achieve or advocate for in the position will result in a lot of failed conversations and very few signed proxies; successful board candidates understand the importance of cultivating relationships between themselves and their neighbors over months, or even years. A successful candidate must also be able to identify issues within the building or association of concern to residents, and then clearly communicate how they will address those issues on behalf of the community.
If a co-op or condo is suffering under poor leadership, residents may be so fed up with the current board that they cannot sign the proxy fast enough. Others might ordinarily be happy to give a candidate the proxy in case they can’t make the meeting, but this time they wouldn’t miss it even if they were hit by a bus.
I know from experience that it’s a great feeling for a board candidate or group of candidates to walk into the annual meeting knowing that they have enough proxies to win a few seats. But securing proxies is only part of the battle; now the concern becomes having those proxies challenged. Were they completed correctly—signed in the right place, by the correct shareholder, with the correct apartment number and name? Were they correctly dated and approved by the managing agent? We’ve seen these questions raised, and seen them result in proxy votes being disqualified when the answer to any of those questions was no.
Once the proxies are determined to be in order, the proxy holder should also ensure that allies have been appointed as election inspectors to count the votes, tabulate the results, and guard against fraud throughout the process.
And make no mistake; board elections are serious legal business. In some of the Mitchell-Lama co-op buildings we have represented, questionable election practices have resulted in governmental intervention and investigations by the District Attorney’s office, leading to arrests in cases where charges besides voter fraud were brought forward. In some instances, the State Legislature passed new laws regulating the use of proxies and mail-in votes to avoid election fraud. These larger Mitchell-Lama buildings have mastered the power of the proxy.
It’s About Marketing…and Listening
Before vying for proxies, a board candidate should make a point to get acquainted with fellow owners/shareholders, clearly communicate their reasons for running, and spell out how he or she intends to make the building a better place to live. Candidates should also contact their managing agent and collect at least two years’ worth of meeting minutes, or board discussion at monthly meetings as required by N.Y. Bus. Corp. Law § 624(a) (McKinney). In addition, the building’s financials should be analyzed in consultation with an accountant or attorney in order to fully understand the financial health of the building.
Along with introducing themselves and their agenda to residents, board hopefuls should also go on a listening campaign to get a sense of what issues in the building are of greatest concern to their neighbors. Even the best, most competent board will have dissenters—and while the board may have very good reasons why they can’t appease those dissenters, the dissenters themselves may nevertheless raise good points worthy of consideration. In larger buildings this is easier to identify, but in smaller buildings, neighborly disputes are more common and much more difficult to navigate or avoid altogether—and if the parties are in litigation, all of the related documents are open for the public to read. Whether the issue facing a board is how to remove a nuisance shareholder, how to navigate a major capital project, or getting the building’s finances back on track, learning the ins and outs of the matter will impress the owners and may make a difference for a board candidate at an election time. And don’t discount doing it the old-fashioned way; standing in the lobby or in a central spot in the building where you can shake hands and introduce yourself to neighbors you have not met may make a difference at the ballot box as well.
Getting the Word Out
In addition to getting out there and literally shaking hands with neighbors, every group or person running for office should introduce themselves to their building in writing as well—not only with personal information about themselves, but also with information they have been learning about the building. Candidates should balance the positive in their newsletter or email messaging (sharing good news and progress reports on building projects, for example, not naming the names of anyone in a negative light), while also making it educational and informative, not shying away from tough issues or challenges facing the community. Ideally, this letter or newsletter should go out monthly or quarterly, depending on how much lead time there is before the election.
If a candidate can establish him- or herself as a trusted source of information to whom other residents feel they can turn for answers to building-related questions, it’s not a bad idea for him or her to carry around a few proxies to be signed heading into the annual meeting. That enables a candidate or slate of candidates to come to the meeting with a sense of assurance they’ve got the votes needed to secure seats on the board.
Getting Proxies on Time & Properly Completed
Of course, even the most well-prepared, on-top-of-it candidate can run into snags before all the votes are counted, For example, if the current board wants to remain in power, they may delay the release of proxies in order to impede a challenger or group of challengers. Proxies are generally released by the managing agent, and if they refuse to release the proxy within a reasonable time, litigation may be necessary to compel them to do so. According to Prince v Albin, 23 Misc 2d 194, 196 [Sup Ct 1960]. . 13315 Owners Corp. v Kennedy, 4 Misc 3d 931, 948 [Civ Ct 2004], “Without election as prescribed by its bylaws, a cooperative board can become authoritarian and heavy-handed, assuming a position reminiscent of a dictatorial landlord from feudal times.” Letters should be written to document any delays, and attorneys should be brought in to have the proxies released, and even postpone the election if necessary.
Although proxies are not difficult documents to complete, it’s not uncommon for errors to occur, and for battles to erupt over whether certain proxies should be disqualified. First, if the proxy is completed properly, and if an owner has completed another proxy (this happens often) the proxy with the most recent date wins. Second, the completed proxy is disqualified if the owner then votes in-person. Third, ask for identification of the owner with the proxy and take pictures of the owner, the identification, and the proxy itself to avoid having anyone claim that they never signed a proxy. Why go to such lengths for a board election? Firms like ours represent some of the most prestigious buildings in the city, as well as buildings with thousands of units with multi-million-dollar budgets. Earning seats on these boards come with great responsibility and power, and require both a great desire to win, and to lead.
Collecting proxies, shaking hands and meeting residents, listening to shareholders/owner’s concerns, and writing a newsletter about building updates and your intentions to improve the building are wonderful ideas that have worked well over the years to help residents win elections.
Q&A: Storage Lockers and Closet Inspections
Q. “I live in a building with storage lockers for cooperators on the ground floor and one storage locker on each floor. All the lockers are closed, so the contents are not visible. The building porters inspect the rooms in which the lockers are located. However, they cannot check inside the individual lockers. Management does not inspect the storage lockers, although they could hold potentially hazardous items such as lithium batteries, paint, etc. Aside from being a fire hazard, the lockers could also harbor vermin and insects that may not be visible in the hallways where the lockers are located. Should there be an annual inspection of the lockers?”
—Concerned with Safety
A. “The cooperative could call for the inspection of all lockers and ask that the building leave a key for the inspections to occur on a certain day to remove hazardous materials, and invite all owners to be present during these inspections,” says attorney Adam Leitman Bailey of New York City law firm Adam Leitman Bailey, P.C., “No objects should be removed without more than one building witness observing the removal, and the owner told where the dangerous contents were taken. Pictures and video should be taken of the items before and after removal. A few possible times for these inspections to take place may be provided, allowing owners the opportunity to be available for inspection in the name of safety for the building residents. One idea is to ask the local Fire Station to assist you in this process as they have protocols for these types of inspections.”
“One of the first orders of business for this cooperative is to determine whether lithium batteries and paint have been lawfully banned by the building’s corporate documents. My understanding is that both lithium batteries and paint can be maintained in a safe manner if certain fire prevention precautions have been taken, although for lithium batteries the locker would have to be very large. Either way, neither item mentioned have been deemed per se dangerous per City, State or Federal law as of today’s date and therefore the cooperative would have to ban them or have banned them already.“
“While finding vermin may be unpleasant but not difficult, rules may want to be in place banning food or other materials attracting vermin or bugs.”
Act Fast and Consider Payment Plans
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When unpaid fees strain a co-op or condo’s budget…act fast and consider payment plans.
Arrears, if let linger, can seriously impact a building’s operating budget and reserve funds. Dealing with arrears involves navigating legal protocols, initiating communication with delinquent residents and, in some cases, setting up payment plans. The course of action may be different depending on whether the building has adequate reserve funds. Even so, ensuring strong governance provisions within your bylaws help safeguard against financial strain.
WHEN TO SUE. One of the first, and perhaps most difficult, decisions a board must make is when to initiate legal action against a shareholder or unit-owner for non-payment. This decision is complex, as it means potentially suing a neighbor, which can strain relationships. However, financial obligations to the building take precedence to ensure ongoing operations and maintenance. The legal process in New York housing courts can be slow, typically taking 30 to 45 days just to file a case. Boards will want to avoid long delays in initiating non-payment actions, as any delay compounds the time it takes to recover funds. Starting early may prevent a situation where a board must wait three months or more before seeing any payment.
GIVING WARNING. Open communication can sometimes prevent arrears from escalating into legal battles. Rather than sending informal reminders about late payments, boards should follow legal protocols by issuing a formal notice, such as a five-day notice, which alerts the resident that the board is aware of the missed payment and is considering legal action. Informal discussions with the resident, particularly if the board suspects a temporary financial setback, can help the resident feel supported and potentially lead to a resolution without court involvement.
PAYMENT PLANS. For residents facing temporary financial difficulties, a payment plan may be an effective solution. Boards may arrange for payment plans to spread out the debt over several months, allowing the resident time to catch up. However, to ensure enforceability, these agreements are often best formalized in court. Without a court-ordered agreement, enforcing the payment plan can be challenging if the resident fails to meet its terms. One other option available to boards when a shareholder or unit-owner fails to pay common charges and there’s a tenant occupying the unit is to leverage a statute allowing boards to collect rent directly from the tenant. This approach is effective in collecting dues without involving lengthy legal proceedings against the absent owner.
SOLID FOUNDATIONS. Selecting knowledgeable board members and consulting experienced legal counsel are crucial steps in managing arrears effectively, preserving neighborly relations, and maintaining a stable financial foundation for the building.
Adam Leitman Bailey, P.C. Secures the First Ever Victory Before the Appellate Division Regarding a Title Insurer’s Obligation to Defend After the Mortgage it Insured is Subsumed into a CEMA
A Consolidation, Extension and Modification Agreement (“CEMA”) is an often-employed vehicle to essentially refinance a mortgage without having to pay the mortgage tax for the full amount of the refinance, as you are only paying mortgage taxes on the “new money”. Adam Leitman Bailey, P.C. represented the insurer of the initial mortgage for $1,995,000. That mortgage and a gap mortgage for $1,005,000 was then consolidated into a CEMA for $3,000,000. A second title company insured the CEMA for the full amount of $3,000,000. When the Lender, who had been assigned the CEMA, commenced a foreclosure action, it was met with the claim that the CEMA was made without the requisite authority and, accordingly, it should be declared null and void. Notwithstanding that the Lender had full coverage under the second title policy, it claimed that it was entitled to coverage under the first policy. Before the lower court, Adam Leitman Bailey, P.C. successfully argued, among other things, that its client’s policy was extinguished when the CEMA mortgages were entered into, and it had no further obligation under its policy as the insurer no longer retained an estate of interest in the land, a condition required for continued coverage under its policy. On appeal, the Appellate Division affirmed, and in so doing established precedent which now affects the entire title industry.
Adopting Adam Leitman Bailey, P.C.’s argument that the language of the CEMA itself indicated that the CEMA would constitute a single lien on the property and thereby supersede all prior liens, the Appellate Division ruled that once the CEMA was executed, the insurer’s liability under the policy for the initial mortgage was extinguished due to the lack of an estate or interest in land. Stated differently, the first mortgage was subsumed into the CEMA. Further, it found that the Lender is not a successor in ownership to a first mortgage’s title insurance policy when it is assigned a CEMA. In addition, the Appellate Division found that because the Lender was not an assignee under the initial policy, it lacked privity and standing to sue. And for good measure, the Appellate Division concluded that “even if plaintiff could be considered an insured under its policy, plaintiff would first have to exhaust the [second] policy as the primary policy.”
This precedent is quite valuable to title insurers who issue the initial policy on the first mortgage which gets subsumed into the CEMA.
Jeffrey R. Metz and Danny Ramrattan represented the initial insurer before the Supreme Court and the Appellate Division.
Adam Leitman Bailey, P.C. Lifts the Cloud Over Client’s Title
Ben Rose
Dov A Treiman
Adam Leitman Bailey, P.C. vindicated the ownership rights of a Housing Corporation in two of its residences. After pressing suit in New York Supreme Court, setting forth compelling facts and evidence and seeking injunctive and substantial monetary relief for the owner, Defendant was forced to capitulate, withdrawing his spurious claims over title.
A former tenant in the Corporation’s building passed away, and ownership of her apartment reverted to the Corporation. Meanwhile, decedent’s daughter – another tenant in the building – was appointed Administrator of her mother’s estate. The daughter purported to transfer title of her own apartment to her brother (Defendant) without any necessary Board knowledge or approval, and she then also proceeded to “transfer” title in her deceased mother’s unit to Defendant despite having no valid claim of ownership therein.
The Corporation, having no knowledge of the fraudulent transfers at the time, sought to sell the units to ready buyers. These sales were critical to the Corporation as they would generate much needed capital and stem the loss of fees from the dormant tenancies. Upon learning of the Corporation’s impending sales, Defendant filed baseless UCC3s for both properties, claiming ownership, clouding their title, and frustrating the Corporation’s much needed sales.
Considering the Corporation’s dire need and Defendant’s baseless actions, Adam Leitman Bailey, P.C. took swift action, seeking injunctive relief to invalidate the bogus UCC3s and nearly $1 Million in damages from Defendant for the lost sales. These quick, decisive actions, coupled with intense negotiations, forced Defendant to cancel the UCC3s and withdraw his spurious claims of ownership over the properties. Adam Leitman Bailey, P.C.’s aggressive approach allowed the Housing Corporation to obtain complete relief with minimal time and cost, and most importantly, the Client’s critical sales were able to proceed.
Ben Rose of Adam Leitman Bailey, P.C. litigated the matter alongside Rachel Sigmund McGinley and briefing from Dov A Treiman.
Adam Leitman Bailey, P.C., Wins Trial and $100,000 Monetary and Possessory Judgment in Residential Non-Payment Case, Overcoming Laches and Breach of Warranty of Habitability Defenses
Vladimir Mironenko
Adam Leitman Bailey, P.C., achieved complete victory in a hard-fought Manhattan Housing Court non-payment proceeding, winning a bench trial and obtaining a greater than $100,000 monetary and possessory judgment for its landlord client, while defeating the tenant’s laches and breaches of warranty of habitability defenses.
Representing the landlord-owner of a Manhattan condominium apartment housing a grandfathered-in rent stabilized tenant, we brought a non-payment proceeding against a highly litigious tenant, who had been litigating with prior owners of the unit and refusing to pay rent for decades.
The tenant’s counsel raised a myriad affirmative defenses and counterclaims, which included, overcharge, illegal rent, constructive eviction, harassment, laches, breaches of warranty of habitability, and others.
The case began in 2018 and included several highly contested motions to dismiss and for summary judgment, and partial summary judgment. We prevailed on the motions, resulting in the dismissal of all of the tenant’s defenses and counterclaims except for laches and warranty of habitability, which were preserved for trial.
The tenant argued that the landlord waited too long to commence the proceeding after purchasing the unit, and that various conditions in the apartment, including allegedly performed installations without Department of Building approvals, constituted a breach of the warranty of habitability entitling the tenant to a complete rent defense or at least a significant abatement of rent.
At trial we aggressively cross examined the tenant’s witnesses including an architect designated as an expert. We argued that the tenant failed to meet his burden to establish all of the elements of laches, including prejudice, and that the tenant was engaged in litigation in another forum and in settlement discussions, all of which defeat laches.
We also argued that the tenant contributed to or caused the apartment conditions of which he complained, that the landlord timely fixed any required conditions, and that the tenant failed to demonstrate any diminution of value of the apartment or any effect of any alleged conditions upon him.
The judge dismissed the tenant’s remaining defenses after trial and awarded our client judgment for the rent sought, which we then collected in full for our client.
Adam Leitman Bailey, P.C. Partner, Vladimir Mironenko, represented the landlord from inception of the proceeding, at trial, and at post-trial proceedings.
Adam Leitman Bailey, P.C. Protects a Bona Fide Purchaser of Property Dragged Into a Dispute Between Prior Owners
COMMERCIAL TENANT
Adam Leitman Bailey, P.C. Secures Substantial Early Termination Payment for Tenant of Foreclosed Building in Receivership
Coop Board Forced To Obey The Law
The well known “business judgment rule” gives a cooperative’s Board of Directors wide discretion in how to administer the building it oversees. Many Boards, however, mistake this for an even broader mandate to do whatever they wish. When a family that owned a penthouse apartment in a coop came to Adam Leitman Bailey, P.C., they were faced with a Board that believed that it could install and maintain noisy, shaky, leaky HVAC condensers on the space adjoining the clients’ apartment, making the clients’ lives a misery. Through carefully crafted court papers, Adam Leitman Bailey, P.C. argued that the Board’s discretion did not extend to making the decision on whether or not to obey the law. The Board, for its part, argued that even the question of whether it was obliged to find out what the law is was purely within its discretion.
When Adam Leitman Bailey, P.C. and the Board appeared before the judge, he stated that he was going to issue an order and it was up to the parties to make suggestions to the Court as to what the Order should contain.
In its proposed Order, the Board sought to have the judge order that the Board would retain full authority to do as it wishes. By contrast, Adam Leitman Bailey, P.C.’s order set forth a detailed script for each action the Board should be mandated to take, including informing itself of legal requirements and reporting to the Court and Adam Leitman Bailey, P.C. on a fixed schedule as to what progress had been made in solving the problems.
The Court almost completely ignored the Board’s proposed order and fashioned its own order, in many places copying Adam Leitman Bailey, P.C.’s proposal word for word. The resulting order was precisely the script Adam Leitman Bailey, P.C. had recommended, with tight deadlines and even tighter reporting requirements.
In short, the Board’s discretion was, at Adam Leitman Bailey, P.C.’s urging, reduced from determining whether to obey the law, to figuring out how to obey it completely.
For Adam Leitman Bailey, P.C., Dov Treiman did the principal drafting of the papers and Courtney Lerias did oral argument, facing off against an extraordinarily rude, aggressive, and arrogant adversary.
Adam Leitman Bailey, P.C. Successfully Prevents Borrower From Staying a Foreclosure Sale
Adam Leitman Bailey, P.C. was retained by a lender to foreclose a business purpose loan. After successfully prosecuting the foreclosure action and obtaining a judgment of foreclosure and sale, the property was scheduled for auction. On the eve of the foreclosure sale, the borrower filed an Order to Show Cause, with a request for a temporary restraining order, on the grounds that the borrower had entered into a contract of sale for the subject property.
Adam Leitman Bailey, P.C. is fully familiar with this stall tactic and therefore was able to jump into action right away. Upon receipt of the Order to Show Cause, Adam Leitman Bailey, P.C. immediately filed a letter with the Court, citing to RPAPL § 1341(2), which specifically provides that a stay of a foreclosure sale is only appropriate if a borrower pays the amounts due and owing under the subject loan into Court.
In this case, Adam Leitman Bailey, P.C. pointed out to the Court that not only did the borrower not pay the amounts due and owing pursuant to the judgment of foreclosure and sale into Court, but also mislead the Court by claiming that proof of funds for the purchase and sale were annexed as an exhibit to its moving papers. However, the purported proof of funds exhibit was a precommitment letter for a mortgage dated several months earlier, and clearly the financing was not approved, since no actual commitment letter was annexed.
Adam Leitman Bailey, P.C. further reminded the Court that the borrower had not made a payment to its lender in many years, yet has been in control of and benefitting from the mortgaged premises, while the lender paid all of the carrying costs, including taxes and insurance. Since the borrower failed to present any grounds, as a matter of law, to stay the upcoming auction and misled the Court in its papers, Adam Leitman Bailey, P.C.’s letter requesting that the Court should decline to sign the Borrower’s Order to Show Cause in its entirety, and to permit its client to proceed with the scheduled foreclosure sale of the subject property without a stay, was accepted and followed by the Court.
The Court agreed and declined to grant the borrower a stay of the foreclosure sale by refusing to sign the Order to Show Cause.
Adam Leitman Bailey, P.C.’s foreclosure expertise allowed it to generate a quick response to this baseless request and achieve a favorable result for its client.
Jackie Halpern Weinstein and Courtney J. Lerias of the Foreclosure Litigation Group at Adam Leitman Bailey, P.C. successfully prevented this borrower from delaying the client from exercising its rights.
Adam Leitman Bailey, P.C. Takes Serious Fire Department, Gets Violations Removed with Finesse and Zeal
When a Fortune 500 company received a violation from the New York City Fire Department for failing to have a certificate of fitness for air chilling equipment on the roof of their building, they General Counsel’s office contacted the lawyers at Adam Leitman Bailey, P.C. to fight the violation.
The implications of being held guilty of the violation were quite significant as it not only would require the company to be forced to engage a full-time engineer to monitor the equipment on a daily basis at a cost of several hundred thousand dollars per year in perpetuity, a guilty precedent would also adversely affect the rest of company’s substantial real estate portfolio in New York City, which had similar equipment, meaning millions of dollars in added labor expenses.
The attorneys at Adam Leitman Bailey, P.C. engaged a team of mechanical, electrical, and plumbing engineers who specialized in the knowledge of the functioning and mechanics of the air chilling equipment to investigate the technical specifications of the equipment relative to the New York City Fire Code.
Working with the engineers, the attorneys at Adam Leitman Bailey, P.C. uncovered that the Fire Department was misapplying the Fire Code to the equipment.
At the hearing on the violation, Adam Leitman Bailey, P.C. argued that the Fire Code was clearly being misapplied as the equipment in question fell outside of the provisions the Fire Department had cited, and underlying the violation. Adam Leitman Bailey, P.C. also called the engineers as expert witnesses to testify that the Fire Department was misapplying the Fire Code as well as submitted letters from the licensed engineers of the manufacturers of the equipment, which certified that the equipment did not meet the requirements for a full-time engineer on site.
However, despite the fact that the violation was dismissed, the Fire Department was relentless, and issued identical subsequent violations.
The attorneys at Adam Leitman Bailey, P.C. met with the Fire Department, and demanded that the Fire Department meet on site with the engineering experts to show that the violations had no merit.
This meeting proved to be a great success. Not only did the Fire Department agree to withdraw and dismiss the new violations, they issued a statement to the Fire Department so that no further harassment would occur to the company concerning the equipment.
Joanna C. Peck and Adam Leitman Bailey, P.C. worked on this matter.
RPL 235-J – Bedbug Notification Requirements
Governor Hochul recently signed into law an amendment to Real Property Law Section 235-j concerning landlords’ duty to notify its tenants of bedbug infestations. Previously, the law required landlords to notify tenants of such infestations within 24 hours of the landlord receiving knowledge of an infestation. The amendment modifies the notification requirements.
Under the amendment, if an individual unit is infested with bedbugs, the landlord, upon learning of the infestation, has 72 hours to notify tenants and lessees of the infestations. The notification must be in writing and is limited to tenants and lessees who reside in units immediately above, immediately below, and immediately adjacent to the infested unit. The notice shall not identify the infested unit, nor shall it contain any personally identifying information of the tenant or tenants whose unit experienced the bed bug infestation.
If there is a bedbug infestation in a common area of a building, the landlord or lessor must place notice of such infestation in a conspicuous location accessible to all tenants and lessees residing in the premises within 72 hours of the landlord or lessor having knowledge of the bed bug infestation.
However, the notification provision under this law do not apply when the landlord or lessor is subject to notice and remediation obligations related to bed bug infestations pursuant to a judicial order, legal settlement, or binding agreement with a federal, state, or local regulatory entity while such judicial order, legal settlement, or binding agreement is in effect.
New York State Court Upholds Statute Prohibiting Housing Discrimination Based on Lawful Source of Income as Unconstitutional as to Section 8 Housing
In a case of first impression, the Supreme Court of Cortland County has held that a provision of New York State law prohibiting housing discrimination based on a lawful source of income is unconstitutional as a violation of the Fourth Amendment, to the extent that it requires landlords to accept vouchers under the federal Housing Choice Voucher Program, otherwise known as Section 8.
Lender Representation, CEMAs & Section 255 of the NY Tax Law
Adam Leitman Bailey, P.C. represents multiple prominent lenders in the real estate industry. Recently, the firm’s transactional department represented a lender in a deal that involved a Consolidation, Extension, and Modification Agreement (“CEMA”).
Can a Coop Board Demand a Unit Owner Make Repairs Prior to Selling?
The short answer is “Yes.” The coop board has a great deal of control and responsibility over the safety of the shareholders, the units, and the building as a whole. The buildings structural integrity must be maintained at all times. Therefore, a coop board may require certain repairs be completed and specific issues addressed prior to approving the sale of a unit.
Displaced Building Service Workers Act
Our condominium client was terminating its building services contract and hiring a new building services company. The client asked if the Displaced Building Service Workers Act would apply to require it to retain employees from the terminated building services company.
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Adam Leitman Bailey, P.C. Annihilates Six-Building Mega Law Firm-Represented Tenant Association, Ending 10-Year Case Against Landlord on All Counts
By Laurie Villanueva
In New York City, the most hated group of individuals besides criminals and real estate brokers are landlords. Despite many landlords putting an extreme amount of attention and care into providing housing, repairs and work to ensure New Yorkers enjoy habitable dwelling and a pleasant living experience, they still get the worst rap.
Yet Adam Leitman Bailey, P.C. flipped this narrative on its head when the firm tackled a years-long intensive class-action case on behalf of a landlord facing a tenants’ association. The case exemplified how bad actors can exploit the legal system and harmful pre-existing public perceptions for personal gain.
The class action initially involved 19 tenants living throughout six buildings on Tiemann, Claremont, La Salle and West 149th streets. The tenants used pro bono services from one of the largest mega law firms in New York and a legal aid organization to levy their complaints.
The tenants association invoked two causes of action in their complaint: violation of the New York Consumer Protection law, N.Y. General Business Law § 349(a), and violation of New York City’s anti-harassment law, N.Y.C. Admin. Code § 27-2005(d). Their allegations included claims of a widespread state of disrepair across the six buildings, improper overcharges and rent demands, and even landlord harassment.
The mega law firm representing the association filed the initial complaint in 2013 in tandem with a press release, and the plaintiffs’ counsel spread news of the allegations to local politicians and banks that worked with the landlords. The plaintiffs’ counsel also named the four owners of the landlord group personally in the complaint even though corporations owned the buildings, embarrassing them and tarnishing their reputation. This demonstrated the plaintiffs’ counsel’s underlying motivation to capitalize on the positive publicity of representing the “little guy” tenant against purported building owner injustice.
Yet not all was as the complaint made it seem. One tenant had previously faced legal action for selling drugs, and another was illegally subletting their unit in violation of NYC’s rent stabilization code. Some of the tenants violated the laws by not living in their apartments for more than half the year. Another said in a deposition that they had an overwhelmingly positive relationship with his landlord and never had any problems.
And though the landlord were painted as malicious profiteers and negligent building managers in the complaint, in reality, testimony showed that they put exemplary effort into upkeep for each of the units. They responded to maintenance requests within 24 hours, and continued following up even when tenants would refuse to allow staffers into their units to complete repairs.
Adam Leitman Bailey, P.C. also represented the landlord in legal actions against the tenants who were selling drugs out of their units and illegally subletting before the class-action complaint was filed. These same tenants joined the class-action case and claimed the landlords’ necessary legal action against them was “harassment.”
When tenant complaints like this arise, landlords often opt for the simpler route of paying out settlement dollars regardless of culpability. This landlord, however, not only recognized the frivolity of the claims, but also the long-term reputational damages they would face if they simply paid for the case to end without vindicating themselves in the press. That’s why they enlisted Adam Leitman Bailey, P.C. for representation in their legal battle.
Adam Leitman Bailey, P.C. began by sending out lengthy document requests to plaintiffs’ counsel to check every facet of the plaintiffs’ claims, including medical record requests for those who claimed the state of disrepair in their apartments were exacerbating health issues. Plaintiffs’ counsel fought Adam Leitman Bailey and his team at every step in the discovery process, drawing out the case for years. The documents plaintiffs’ counsel did cough up undermined, and in some instances contradicted, the tenants’ claims.
It even became clear that plaintiffs’ counsel failed to properly research the laws pertaining to the harassment claims. The outstanding claims involved one of the landlord’s employees failing to make timely repairs and attempting to buy tenants out of their units, but the laws classifying those actions as actual harassment were enacted many years after the tenants alleged they occurred. Therefore, Adam Leitman Bailey and his team argued the tenants association’s harassment claims were on a faulty legal basis and the harassment statutes they cited could not apply to their case.
Adam Leitman Bailey repeatedly pushed plaintiffs’ counsel to stop wasting everyone’s money and time on the proceedings that were increasingly proving to be meritless, but the mega law firm wouldn’t budge. Many tenants saw through counsel’s blatant push to continue gaining clout by drawing out the case without signs of actual profit for those they represented, so tenants began dropping out until there were only six left in the case.
Once counsel completed the last of the 10 depositions involved in the case nearly a decade after it was initiated, Adam Leitman Bailey moved for summary judgment, asking for a full dismissal based on the steps the landlords took to ensure quality living in their buildings and the inapplicability of the harassment laws to the tenants’ claims. Adam Leitman Bailey presented the case.
“My adversaries argue the harassment laws (that are in effect) from 2017 should be applied to this case. The complaint – the complaint is from 2013. In the 2013 (lawsuit) they don’t actually mention harassment laws … the (harassment laws that have passed) don’t have any penalties. The laws only provide for injunctive relief. You can’t receive monetary damages; you can’t receive money, yet,” Adam Leitman Bailey argued in court. “The laws today allow plaintiffs to receive money, a thousand dollars or compensatory damages … But at the time in 2013 when the complaints – and all the complaints and the testimony in the depositions that they’ve attached and in their complaints, which the complaint has not been amended since 2013, and has not proposed to be amended, is stuck in time. It is ten years later now and it’s too late to be amended or changed…So Plaintiffs are bound by the 2013 laws and whatever the remedies are allowed in that year.” (Argument is condensed and refined).
After Adam Leitman Bailey made the case before Justice Suzanne J. Adams, the plaintiffs’ counsel had the gall to request to delay the case further to submit their reply, absurdly blaming Bailey and his team for failing to inform them of the harassment laws that rendered their case unwinnable.
In the end, the delay request could not save the case for the remaining plaintiffs. Justice Adams adopted all of Adam Leitman Bailey, P.C.’s arguments and ordered summary judgment on all counts in September 2023, a whole decade after the case began.
“The definition of harassment is set forth in detail in N.Y.C. Admin. Code § 27-2004(a)(48). The only opposing affidavits of persons with knowledge…do not allege any acts by defendants that could be considered harassment under the statute, and as such fail to create any significant issues of fact warranting denial of the motion,” Justice Adams wrote in her decision. “None of these affidavits set forth any allegedly harassing actions that occurred after 2013, and all state that their pre-2013 repair requests were eventually resolved, which is consistent with each of these plaintiffs’ deposition testimony.”
While the landlord saw the retribution that they spent years fighting for come to fruition in court, the plaintiffs’ counsel’s use of the press to tarnish their reputation worked. Because the mega law firm informed the banks Adam Leitman Bailey, P.C.’s clients worked with, they continued having difficulty obtaining loans and were forced into a special program where they had to get a punitive certificate to apply for a property rehab permit.
In situations like this, Adam Leitman Bailey understands that a good attorney’s work doesn’t end in court. He ensured copies of the judge’s decisions went to the politicians who were most vocal about the case and to the clients’ banks, which allowed the landlords to make inroads on refinancing.
“It required a lot of unneeded energy, stress, and time, but business did continue,” Adam Leitman Bailey said.
Though the landlords had a satisfactory result and avoided settlements, it’s impossible to quantify the effect of bad publicity. However, Adam Leitman Bailey, P.C. fought to demonstrate the owners were respectable building managers. Owners that took care of its residents’ needs year after year, preserving an excellent reputation among the buildings’ residents and the community in perpetuity.
The author has been asked not to name the landlord as its reputation has already been harmed publicly for many years in association with this case.
Adam Leitman Bailey, P.C. Takes Down Scamming Developer On Behalf of First-Time Buyers
By Laurie Villanueva
Adam Leitman Bailey walked into an overcrowded entrance to a building, looked at the owners of the Spencer Street condominiums, and started explaining what many of them already knew. Most of these owners were buying their first homes to start their families and had invested their life savings.
Many of the owners had faces in their late 20’s to early 30s and heard rumors that the many housing defects were not their biggest problems — they stared down the barrel of possible foreclosure. Although many of them were eloquent speakers, on that night, no one said a word except for the balding lawyer in the navy blue suit carrying an oversized Coach briefcase.
Bailey didn’t hold back when outlining the reality of the buyers’ circumstances — they sunk their life-savings into homes built by developer Mendel Brach, who had tricked two government agencies. Brach lied to the Department of Buildings by stating that would be building apartments reserved for faculty members at a nearby Yeshiva so they could exceed the five-story zoning limit. Brach then lied to the State Attorney General’s office, submitting a plan to sell all 72 units of the four, nine-story buildings on the free market, without any mention of selling to Yeshiva faculty. For the government, the only just resolution at the time would be to demolish the buildings and apply to rebuild again.
“The bottom line is the rules are there to be bent, it’s just only the developers can bend them apparently,” Daniel Weintraub, a resident, told City Limits during the investigation.
The purchaser were appalled by the units’ conditions: unfinished floors, faulty electricity, unstable walls, mold, and bursting pipes, among other issues. One buyer told a local TV station that they invested in “the Enron of housing in New York City.”
“[Brach] recklessly and intentionally built an unsafe building that never should have gotten the Department of Buildings’ approval,” Adam Leitman Bailey told the New York Times. “He’s killed the financial lives of hundreds of people.”
Investigation revealed that the buildings required over nine million dollars of remediation to the exterior, interior and mechanicals like the pipes and electricity, and the new residents faced building sponsors with no shame – Brach and the other sponsors involved in the project put up every roadblock imaginable to delay the remediation. And without remediation, the buildings could not be issued a permanent certificate of occupancy, which allows residents to legally use, rent, refinance and sell the units. This meant the buyers were sitting on essentially worthless properties.
“We all closed in 2004 and we’ve all been paying our mortgages on what is a valueless property, if the city chooses not to issue a certificate of occupancy,” said Sara Monestime, a buyer, to The Real Deal in 2009.
The buyers’ representation prior to Adam Leitman Bailey, P.C. taking on the case failed to push back on Brach and the sponsors’ efforts to evade accountability, even entering a settlement agreement that eliminated any right to commence a lawsuit against the building sponsor.
“When you deal with these city agencies, I’m learning, logic goes out the friggin’ window,” Monestime told the City Limits. “They make the rules. They make the rules. They make no sense to anybody else and they can change the rules when they want.”
But that night in the entranceway, Adam Leitman Bailey presented a way out for the distraught buyers.
Achieving retribution required Adam Leitman Bailey P.C. to apply pressure from all angles. Adam Leitman Bailey and his team lobbied local politicians and the Department of Buildings to move forward with properly placing the blame for the condominiums’ state of disrepair on Brach and the building sponsors and compel them to facilitate the repairs. Once Adam Leitman Bailey, P.C. also involved the Office of the Attorney General in a lawsuit, they successfully negotiated an agreement with Brach that would lead to either a complete buyout of the 72 units or a multimillion-dollar judgment against him. This was the first guarantee of progress these buyers had since purchasing the units.
With Brach unable to deliver on the buyout or individual efforts to fix the buildings, ALBPC and the Attorney General’s Office moved forward with the judgment. Brach was not only required to pay $10.9 million to the residents so they could make the necessary repairs, but also had to issue amendments to any future sale offering plans for the condominiums that outlined Brach’s failure to comply with zoning or disclose the many construction shortcomings.
But the litigation win from Adam Leitman Bailey, P.C. extended beyond simply rectifying the financial losses these residents experienced. The lawsuit also barred Brach from real estate security privileges, meaning he could not participate in future real estate development and sales, until at least five years after he satisfied all the settlement’s requirements, a novel requirement that is exceedingly rare in real estate judgments.
Brach continued to claim he could not pay the $10.9 million for repairs, so Adam Leitman Bailey’s work extended beyond the courts. He and his team continued lobbying the Department of Buildings, and they succeeded in convincing the Department of Buildings to reduce the number of violations that was required to be corrected. The Department no longer required that the buildings satisfy the original five-story neighborhood restriction, nor did it require the buildings to be reserved for Yeshiva faculty housing.
Eventually, with the help of the Attorney General’s Office and the neighborhood’s residing City Councilwoman, the buyers achieved a permanent certificate of occupancy for their buildings so long as the residents made efforts towards completing the necessary repairs, a reality that at one time seemed impossible and wholly out of reach prior to Adam Leitman Bailey, P.C.’s involvement. For too long, the residents lived without such a certificate of occupancy and could not refinance or sell their units.
Since Brach was not delivering on the financing for these repairs, Adam Leitman Bailey continued to make progress on behalf of the residents by employing subpoenas, depositions and other lawsuits to collect monies from other investors in the condo project.
Adam Leitman Bailey’s relentless pursuit of relief for these residents saved multiple families from foreclosure and absolute financial ruin. This case also served as a major indictment of the city’s shortcomings in regulating safe real estate development, leading to further action at the Department of Buildings and city and state governments to add oversight. In 2024, NYC Council passed a bill requiring the Department of Buildings to create a proactive risk-based inspection program, which likely would have stopped Brach’s units from ever hitting the free market.
“This case or saga was much more than getting problem buildings repaired or getting a sponsor to comply with the offering plan. These buildings needed a lot of luck, compassion from the Department of Buildings and the Attorney General’s Office and a terrific Councilwoman. I just had the power to sue, the amazing ability to sit in small rooms for hours with these agencies focused on helping these owners keep their homes and getting them repaired,” Adam Leitman Bailey said. “We never gave up and I believed no matter how complicated the task that by taking on one obstacle at a time, this disaster caused by a very bad man could be resolved and now we can celebrate its happy ending.”
My Apartment Is Way Too Cold! How Do I Make the Landlord Fix It?
By Jill Terreri Ramos
Q: We live in one of many Manhattan market-rate prewar rental buildings owned by a real estate family. We always had enough heat. Then the family hired a third-party management company. Now, a new heating system provides the legal minimum of 68.2 degrees of heat. At times, the heat rises, but not for very long. We are miserably cold. Many tenants here and elsewhere have complained. What can we do without provoking management retaliation? We fear our lease won’t be renewed if we speak up.
A: Your landlord does indeed need to provide heat during the colder months, and if your apartment is not properly heated, you should gather your neighbors and complain together.
New York City requires building owners to provide heat to their tenants between Oct. 1 and May 31. If the outdoor temperature falls below 55 degrees between 6 a.m. and 10 p.m., the heat must reach 68 degrees inside. At night, between 10 p.m. and 6 a.m., the temperature inside must be 62 degrees, regardless of the outdoor temperature.
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Get a thermometer with a digital display that will measure the indoor temperature, and photograph the readings over time to establish evidence for your complaint. Make a note of the time of day and the outdoor temperature at that time. If you find that the temperature is below the legal threshold, ask your neighbors to do the same thing.
“I recommend that they organize a group,” said Adam Leitman Bailey, a real estate lawyer.
You could also share the cost with your neighbors of hiring an engineer to check your apartment for any problems with the new heating system. If you wind up in a legal battle with the landlord, you’ll need this expert testimony.
Adam Leitman Bailey, P.C. has been named as a Notable New York Litigator by Crains New York Business for 2025.
Vault Places Adam Leitman Bailey, P.C. On The Top 150 Under 150 List as The Sixth Best Midsize Law Firm to Work For in 2025
Best Lawyers Ranks Adam Leitman Bailey, P.C. as a Top New York Real Estate Law Firm for 2025
“She did try to parcel out the case so that most of the work was being done by non-partners and not incurring huge fees, but she (as a partner) was overseeing the whole project. She was responsive, I would get emails from her at 10 o’clock at night. ” – Lloyd Cheu
“If you’re in real estate, Adam Leitman Bailey is who you want to work with” – Erman Agirnasli, Real Estate and Condominium Developer
“This is the firm to work for, this is where you want to be for your Summer, Spring or Fall externship” – Richard Trabosh, Spring Legal Extern 2025
Adam Leitman Bailey Saves Ryan Serhant From a Gangster by Winning a Real Estate Case
Adam Leitman Bailey, P.C. Celebrates Zoe Tsicalos Being Admitted to the New York State Bar
