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One of the Bedrocks of Real Estate Transfers: The Statute of Limitations Cannot Be Extended By State Courts in New York
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Real estate markets require certainty. Lenders, developers, and all real estate actors require certainly to trust the market to make intelligent decisions and rely on these decisions and be able to sell these decisions to investors and the public at large.
Both the largest lender to the first-time home buyer rely on our courts, indirectly, when giving out a loan to make a purchase—that the law will be followed so their investments will be as safe as possible.
Rash or harmful legislative decisions such as the State Legislature has signed by the Governor in July of 2019 have resulted in an incredible amount monetary losses and harm to both landlord and tenants and countless jobs lost for workers.
Thankfully, the New York Courts, from the local villages to the Court of Appeals have upheld the law where New York has been able to survive such an onslaught and many business persons continue to revitalize New York real estate.
On very few occasions in the past year, one of the most sacrosanct laws, the Statute of Limitations has been extended without party consent by court at least temporarily. Knowing when a party’s ability to sue ends allows for proper planning, facilitates decision making and promotes business prosperity because of the certainty and belief in our legal system.
States all over the country choose New York as their preferred state for choice of law provisions because the quality of our court system and its decisions since we became a democracy. And one of those bedrocks that allows real estate to transfer with confidence in that only the Legislature, with Constitutional limitations, can amend a statute’s expiration of its time to sue.
The Court of Appeals has explained that Statutes of Limitation are “designed to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have failed, and witnesses have disappeared.” Blanco v. American Tel. & Tel. Co., 90 N.Y.2d 757, 773 (2000) quoting from Order of Railroad Telegraphers v. Railway Express Agency, 321 U.S.342, 348-349 (1944).
For practicing attorneys, recognizing when the statute of limitations for a particular matter is about to run is always of utmost importance because missing the applicable period will likely form an immutable barrier to prosecution of a client’s action, and open the door to a claim for legal malpractice.
This article will examine the limited circumstances where a statute of limitations can be tolled and whether a court can provide attorneys with a life preserver by extending a statute of limitations.
Statutory Bar
CPLR §201 states that “[a]n action, including one brought in the name or for the benefit of the State, must be commenced within the time specified in this article unless a different time is prescribed by law or a shorter time is prescribed by a written agreement.”
Importantly, §201 goes on to provide that: “No court shall extend the time limited by law for the commencement of an action.” Id.
This is consistent with the long held belief of the Court of Appeals that “[a] Statute of Limitations is not open to discretionary change by the courts, no matter how compelling the circumstances…”. Arnold v. Mayal Realty Corp., 299 N.Y. 57, 60 (1947). See also Matter of Thorton v. NYC Housing Authority, 100 A.D.3d 556, 557 (1st Dept. 2012) (“[t]his Court cannot extend the statute of limitations.”); Roberts v. City University of New York, 41 A.D. 3d 825, 82. (2d Dept. 2007) (application to file a late claim in the Court of Claims denied because “[o]nce the applicable limitations period expired…the court was without authority either to entertain a subsequent motion to extend the time to file a late claim, or sua sponte, to grant such relief.”); Crum & Foster, Inc. Co. v. State of New York, 25 A.D. 3d 643 2d Dept. 2006) (reversing order of Court of Claims granting claimant leave to serve and file a properly verified claim as the statute of limitations had already run). The same holds true in criminal proceedings. See, People v Kellman, 156 Misc. 2d 179, 183 (Sup. Ct. Kings Cnty. 1992) (“ the court may not sua sponte, alter a statutory time period within which a defendant may invoke a right under the CPL.”)
The Limited Exceptions
Notwithstanding this statutory bar, there any circumstances where a state courts can sanction a tolling of the statute of limitations.
In State v. William, II, 224 A.D.3d 1356 (4th Dept. 2024), for example, the court found that an action was not time barred because the Governor Cuomo had issued a series of executive orders in response to the COVID-19 pandemic which had tolled “any specific time limit for the commencement… of any legal action…”
This comports with CPLR §204(a), which provides that “[w]here the commencement of an action has been stayed by a court or by statutory prohibition, the duration of the stay is not a part of the time within which the action must be commenced.” See, e.g., Lubonty v. U.S. Bank National Assn., 34 N.Y. 3d 250, 258 (2019) (automatic bankruptcy stay pursuant to 11 U.S.C.A. §362 (a)(1) constitutes a statutory probation under CPLR 204(a) and reflects the “equitable principle that plaintiffs should not be penalized for failing to assert their rights when a court or statute prevents them from doing so.”); Wilson v. Motor Veh. Acc. Indem. Corp., 44 Misc 2d. 187 (Sup. Ct Bronx Cnty, 1964) (statute of limitations tolled because plaintiff was retrained from commencing action while court held in abeyance his motion for leave to sue); Vasquez v. Motor Vehicle Acc. Indemnification Corp., 272 A.D. 2d 275 (1st Dept. 2000) (because Insurance Law §5218 requires an order permitting MVAIC to be sued, the statute of limitations is tolled until the order granting leave is entered)
Furthermore, in Roldan v. Allstate Ins. Co., 149 A.D.2d 20, 32 (2d Dept. 1989), the Second Department found that the statute of limitations could be tolled where a cause of action had accrued but was “temporarily extinguished as a result of an erroneous court order, which was later reversed.” See also, Brown v. State, 250 A.D.2d 314, 319 (3d Dept. 1998) (holding that “the Statute of Limitations is tolled where the limitations would run against a person unable to bring an action based on a prior ruling.”) But this rule is fact dependent.
In Varo, Inc. v. Alvis PLC, 261 A.D.2d 262 (1st Dept. 1999), a case involving a claim for breach of contract, plaintiffs argued that an action brought by the government against the defendants under the Federal False Claims Act, which resulted in a qui tam proceeding requiring that complaint to be under seal for a period of time, precluded them from bringing suit within the six-year statute of limitations period. Id. at 268. The court rejected plaintiffs’ contention, finding that nothing in the Federal False Claims Act prevented them from timely commencing the action. Id. at 268-69.
Of interesting note, the courts are clear that a limitations period is not tolled “while a petition for letters of administration is pending.” Xenias v. Mount Sinai Health System, Inc., 191 A.D. 3d 454, 455 (1st Dept. 2021); Singh v New York City Health & Hosp. Corp., 107 A.D. 780 (2d Dept. 2013).
Equitalbe Tolling: The Difference Between State and Federal Courts
Given the statutory bar of CPLR §201, and the limited exceptions which permit a tolling, the issue turns to whether a court can utilize the doctrine of “equitable tolling” to effectively extend the statute of limitations. The answer turns on the forum and the statutes involved.
Siegel, New York Practice §56 (6th Ed.) teaches that equitable tolling relates to federally created causes of action and has no precise state counterpart. The Court of Appeals for the Second Circuit has instructed that equitable tolling on the federal level “is only appropriate in rare and exceptional circumstances in which a party is prevented in some extraordinary way from exercising his rights.” Zerilli-Edelglass v. New York City Transit Authority, 333 F.3d 74, 80 (2d Cir. 2003) (citations and internal quotation marks omitted).
Illustratively, the doctrine is available where the plaintiff has actively pursued judicial remedies but filed a defective pleading during the specified time period or where a plaintiff’s medical condition or mental impairment prevented he/she from filing in a timely manner. Id. (citation and internal quotation marks omitted). However, “a want of diligence by a plaintiff’s attorney generally will not prompt a court to provide relief from a limitations period by way of an equitable toll.” Chapman v. ChoiceCare Long Island Term Disability Plan, 288 F. 3d 506, 512 (2d Cir. 2002).
Thus, federal courts “have typically extended equitable relief only sparingly.” O’Hara v. Bayliner, 89 N.Y.2d 636, 646 (1997) (quoting Irwin v. Dept. of Veterans Affairs, 498 U.S. 89, 96 (1990)) (internal quotation marks omitted) But no equitable toll is available at the the state level.
“[E]quitable tolling does not apply to… state law claims, as the doctrine only tolls the statute of limitations with regard to federally created causes of action.” Von Hoffmann v. Prudential Ins. Co. of Am., 202 F. Supp. 2d 252, 264 (S.D.N.Y 2002).
The First Department is in accord. In Jang Ho Choi v. Beautri Realty Corp., 135 A.D.3d 451, 452 (1st Dept. 2016), plaintiff’s specific performance cause of action was found to be time barred because the plaintiff did not commence his action within six years.
The court rejected the plaintiff’s contention that the statute was equitably tolled during the pendency of another case concerning a different party’s right to purchase the same property as well as an action that the plaintiff had brought in South Korea.
The First Department stated in no uncertain terms that “the doctrine of equitable tolling is not available in state causes of action in New York.” Id. at 452. This is follows prior First Department holdings in Ari v. Cohen, 107 A.D.3d 516, 517 (1st Dept. 2013), and Shared Communications Servs. of ESR, Inc. v. Goldman Sachs & Co., 38 A.D.3d 325 (1st Dept. 2007).
Interestingly, the Shared Communications court noted, in dicta, that a tolling might be possible under the theory of equitable estoppel.
Tolling by Equitable Estoppel
The Court of Appeals has instructed that the doctrine of equitable estoppel is “rooted in the principle that one may not take advantage of one’s own wrongdoing [and] operates to bar a party from asserting the Statute of Limitations when that party’s own wrongful concealment has engendered the delay in prosecution.” Matter of Steyer, 70 N.Y. 2d 990, 993 (1988) This principle is aptly demonstrated in Simcuski v. Saeli, 44 N.Y. 442 (1978)
In Simcuski,a doctor negligently injured a patient during surgery. Although the doctor know that his negligence had caused potentially permanent injury, he falsely told her that her “pain and difficulties were transient and that they would disappear if she would continue a regiment of physiotherapy…” 44 N.Y. 2d at 447.
The patient relied upon the doctor’s assurances and did not discover the true extent of her injury until the Statute of Limitations had passed. Under these circumstances, the Court found that the plaintiff had justifiably relied on the doctor’s misrepresentations in not filing suit prior to the time she did and denied the doctor’s motion to dismiss plaintiff’s complaint. It wrote that, “a defendant may be estopped to plead the Statute of Limitations where plaintiff was induced, by fraud, misrepresentations or deception to refrain from filing a timely action.” 44 N.Y. 2d at 448-449.
However, the court also provided the caveat that “[i]f the conduct relied on (fraud, misrepresentation or other deception) has ceased to be operational within the otherwise applicable period of limitations (or perhaps within a reasonable time prior to the expiration of such period), many courts have denied application of the doctrine on the ground that the period during which the plaintiff was justifiably lulled into inactivity had expired prior to the statutory period, and that the plaintiff had thereafter had sufficient time to commence his action prior to the expiration of the period of limitations.” Id. at 449-450
Thus, it is the plaintiff’s burden “to establish that the action was brought within a reasonable time after the facts giving rise to the estoppel have ceased to be operational.” Id. at 450
Conclusion
The practitioner must be hyper vigilant to make sure that a matter is brought within the statute of limitations as it is clear that unless there are extraordinary circumstances, the court will not and cannot throw you a life line.
Adam Leitman Bailey is the founding partner of Adam Leitman Bailey, P.C. Jeffrey Metz is the chief of the appellate group at the firm.
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Lawful Source of Income Anti-Discrimination Laws as Applied to Rentals
Both New York State and New York City, as well as other municipalities within New York State, have laws on the books that prohibit discrimination by owners and managers of housing accommodations against prospective tenants based on the source of the tenants’ income.
The New York State and New York City versions of these laws comprise part of the civil rights statutes of New York State and New York City. New York State’s general anti-discrimination statute appears at Sections 290-301 of the New York Executive Law (the “New York State Human Rights Law,” or “NYSHRL”), with the provisions barring discrimination in housing accommodations appearing in Section 296, Paragraph 5(a) of that statute. New York City’s general civil rights statute appears in Title 8 of the New York City Administrative Code of the New York City Administrative Code (the “Code”) (the “New York City Human Rights Law,” or “NYCHRL”), with the provisions barring discrimination in housing accommodations appearing in Code §8-107(5)(a).
Both the NYSHRL and NYCHRL prohibit multiple forms of discrimination on the basis of numerous characteristics, and each of them includes “lawful source of income” as one such characteristic. At the outset, both statutes define “lawful source of income” as including federal, state, or local governmental housing subsidies, and expressly including “section 8 vouchers,” N.Y. Executive Law §292(36); Code §8-102, i.e., vouchers issued under Section 8 of the United States Housing Act of 1937, otherwise known as the Housing Choice Voucher Program, see People by James v. Commons West, LLC, 80 Misc. 3d 447, 448 (Sup. Ct. Cortland County 2023), adhered to on renewal, _____ Misc. 3d _____, 224 N.Y.S.3d 364 (Sup. Ct. Cortland County 2024); Housing Rights Initiative v. Corcoran Group LLC, No. 154010/2022, 2024 N.Y. Slip Op. 30596(U), 2024 WL 776827, at *1 (Sup. Ct. N.Y. County Feb. 26, 2024) (“Corcoran Group”).
Other types of housing subsidies falling within “lawful sources of income” include, among others, CityFHEPs (City Fighting Homelessness and Eviction Prevention Supplement) vouchers issued by the City of New York, see Olivierre v. Parkchester Preservation Co., No. 452058/2022, 2022 N.Y. Slip Op. 34471(U), 2022 WL 18456529, at *1-3 (Sup. Ct. N.Y. County July 29, 2022); Fair Housing Justice Center, Inc. v. Beach Haven Apartments Associates LLC, No. 525173/22, 2024 N.Y. Slip Op. 30790(U), 2024 WL 1076110, at *2 (Sup. Ct. Kings County Feb. 29, 2024); and the Olmstead Housing Subsidy (“OHS”) and the New York City HIV/AIDS Services Administration (“HASA”) rental subsidy, see Fair Housing Justice Center, Inc. v. Pelican Management, Inc., 18-cv-1564 (ER) (OTW), 2023 WL 6390159, at *1 (S.D.N.Y. Sept. 29, 2023) (“Pelican Management”), aff’d, 23-7348-cv, 2025 WL 251723 (2d Cir. Jan. 21, 2025).
The NYSHRL and NYCHRL each prohibit four types of acts, although the precise wording varies between the two:
1. Outright refusal to sell, rent, or lease the housing accommodation, or otherwise deny or withhold the housing accommodation, based on a person’s lawful source of income. N.Y. Executive Law §296(5)(a)(1); Code §8-107(5)(1)(a). This would include, for example, a landlord’s outright refusal to accept a legitimate Section 8 voucher. See Florentino v. Nokit Realty Corp., 29 Misc. 3d 190, 196 (Sup. Ct. N.Y. County 2010).
2. Representation to any person that any housing accommodation is not available for inspection, sale, rental, or lease when in fact it is available. See N.Y. Executive Law §296(5)(a)(1); Code §8-107(5)(1)(c). This would include, for example, an assertion, by a landlord, to a Section 8 voucher holder, that there are no available units to rent, when in fact there are available units.
3. Discrimination against any person, because of such person’s lawful source of income, in the terms, conditions, or privileges of the sale, rental, or lease of any such housing accommodation. See N.Y. Executive Law §296(5)(a)(2); Code §8-107(5)(1)(b). This would include, for example, a landlord imposing, upon applicants holding Section 8 vouchers, additional requirements that it does not impose on persons not holding such vouchers, such as requiring them to fill out an application prior to viewing an apartment, or not following up with prospective tenants with vouchers as it does with tenants paying solely by income. See Fair Housing Justice Center, Inc. v. Fairstead Management LLC, No. 952363/2023, 2024 N.Y. Slip Op. 33325(U), 2024 WL 4241603, at *8 (Sup. Ct. N.Y. County Sep. 19, 2024)
4. Printing or circulating any statement, advertisement, or publication, or using any form of application for the purchase, rental, or lease of such housing accommodation, or making any record or inquiry in connection with the prospective purchase, rental or lease of such housing accommodation which expresses, directly or directly, any limitation, specification, or discrimination as to lawful source of income, or any intent to make such limitation, specification, or discrimination. N.Y. Executive Law §296(5)(a)(3); Code §8-107(5)(2). This would include, for example, a landlord’s real estate broker or agent informing a prospective applicant who asks whether the landlord accepts vouchers, that the landlord does not accept vouchers. See Newson v. Vivaldi Real Estate Ltd., ___ A.D.3d ___, 226 N.Y.S. 3d 6, 8, 14 (1st Dep’t 2025) (holding such allegations, as against landlord’s real estate agent, stated a claim against landlord under NYCHRL).
Application of this statute can be problematic in the case of applicants for apartment rentals who receive housing assistance, including but not limited to section 8 vouchers. It is standard procedure for landlords to require that applicants be generating an income that is a certain multiple of the monthly rent; often, this minimum-income requirement is set as forty (40) times the monthly rent. Such a minimum-income requirement is imposed in order to confirm that the applicant is receiving sufficient income that s/he will be able to afford to pay rent throughout the rental term, were the applicant to be accepted as a tenant.
However, a tenant may not be qualified to receive a housing subsidy in the first place if s/he receives an income in excess of a certain amount. See Corcoran Group, 2024 WL 776827, at *3 (reciting that complaint of lawful-source-of-income discrimination alleged that to be eligible for Housing Choice Vouchers, a one-person household’s annual income could not exceed $41,800, a two-person household’s annual income could not exceed $47,750, and a three-person household’s annual income could not exceed $53,700, each of which amounts was less than $72,000 minimum income necessary to rent $1,800-per-month apartment under requirement that income be 40 times the monthly rent); Olivierre, 2022 WL 18456529, at *1-2 (recounting plaintiff’s allegations that she had a CityFHEPs voucher, eligibility for which required a gross annual household income no greater than $46,060, whereas owner of property where she wished to reside required her to show a minimum annual income of $62,000).
Ordinarily, one might expect that circumstance to be the end of the matter: the limited income of the applicant that renders him/her eligible for the voucher, also disqualifies the applicant from residence at the desired property. However, some trial-level courts in New York State, both in state and federal courts, have held that imposition of a minimum-income requirement upon voucher recipients is a violation of the NYSHRL and NYCHRL. This is true even if the landlord applies the same minimum-income requirement to both voucher recipients and non-voucher recipients alike.
Partly this is due to the existence of two alternate theories of proving liability under civil rights laws. One of these is disparate treatment, wherein the plaintiff must show intentional discrimination, in which, under the NYSHRL and NYCHRL, “the plaintiff need only show differential treatment—that [a class] is treated ‘less well’ –because of a discriminatory intent.” See Corcoran Group, 2024 WL 776827, at *2 (quoting Mihalik v. Credit Agricole Chevreux N. Am., Inc., 715 F.3d 102, 110 (2d Cir. 2013)) (alterations in Corcoran Group).
The other theory is disparate impact, wherein, even if there is no intent to discriminate, a practice that is facially neutral with regard to the protected characteristic—here, the applicant’s receiving a voucher—nevertheless has a disproportionate impact on persons. “To establish a disparate impact claim ‘a plaintiff must first establish a prima facie case by showing, (1) the occurrence of certain outwardly neutral practices, and (2) a significantly adverse or disproportionate impact on persons of a particular type produced by the defendant’s facially neutral acts or practices.’” See Corcoran Group, 2024 WL 776826, at *3 (quoting Mhany Mgmt., Inc. v. County of Nassau, 819 F.3d 581, 617 (2d Cir. 2016)). If the plaintiff can establish those two elements, then the burden shifts to the defendant to “prove that its actions furthered, in theory and in practice, a legitimate, bona fide [ ] interest.” Pelican Management, 2023 WL 6390159, at *14 (quoting Mhany Mgmt., 819 F.3d at 617) (internal quotation marks omitted).
If the defendant can do so, then the burden shifts back to the plaintiff, who must show that the “interests supporting the challenged practice could be served by another practice that has a less discriminatory effect.” Id. (quoting Mhany Mgmt., 819 F.3d at 617) (internal quotation marks omitted).
Because of the existence of disparate impact liability, which has been applied to cases alleging discrimination based on lawful source of income, see, e.g., Corcoran Group, 2024 WL 776827, at *3; Pelican Management, 2023 WL 6390159, at *14-15, even a landlord’s imposition of the same income requirement across all applicants, regardless of whether the applicant is a voucher holder, has been found to be discriminatory, in instances in which voucher recipients have been able to show that such a requirement disproportionately impacts them.
For example, in a case in which the defendant imposed a requirement that applicants have an annual income of at least 43 times the monthly rent, the plaintiff was able to show that this minimum-income policy would have excluded 100% of applicants receiving the OHS subsidy, 100% of applicants receiving the HASA subsidy, and 97% of applicants receiving Section 8 vouchers, the United States District Court for the Southern District of New York found that the plaintiff had shown the minimum-income policy had a disparate impact on voucher recipients in violation of the NYCHRL. Pelican Management, 2023 WL 6390159, at *14-15.
In another case, in which, to be eligible for the voucher, the applicant needed to have a household income that was below the minimum-income requirement imposed by the landlord, Supreme Court, New York County found, for the purposes of a motion to dismiss, that the minimum-income requirement had a disparate impact. Corcoran Group, 2024 WL 776827, at *3.
As noted above, a landlord can overcome a finding of disparate impact by proving that its conduct furthered a legitimate interest. However, a landlord must be ready to provide evidence that its policy furthered such an interest.
Even a seemingly obvious explanation will not carry the day, unless there is proof to back it up. For example, in Pelican Management, the landlord’s rationales for its minimum income policy were that the landlord had been “experiencing…unusually high rates of tenant rent arrears,” Pelican Management, 2023 WL 6390159, at *4, and the landlord had a “crucial interest in renting only to tenants who can afford to pay the rent,” id. at *13. However, the court rejected these assertions, reasoning that the landlord “did not evaluate, let alone determine, that subsidy tenants contributed to those high arrears, and did not analyze the frequency with which subsidy holders did or did not pay their portion of the rent, despite having the data within the company’s business records to conduct such an analysis.” Id.
One particular trap into which landlords have fallen—and one which courts have found gives rise not just to liability under a theory of disparate impact, but also one of disparate treatment—is comparing the applicant’s income to an incorrect measurement of the rent to be paid.
In at least two cases, the courts found that the landlords treated applicants with subsidies less favorably on their face, and therefore with disparate treatment, by comparing voucher applicants’ income with the full amount of the rent, rather than the portion of the rent for which the applicants would be personally responsible after a portion of the rent had been paid for by the relevant subsidy. Pelican Management, 2023 WL 6390159, at *16; Corcoran Group, 2024 WL 776827, at *2.
Although, at first glance, it would appear to be equal treatment to compare both subsidy recipients and non-subsidy recipients’ incomes to the full rent on the unit in question, if landlords are to impose minimum incomes at all on subsidy recipients, that income must be a product of the multiplier that they use for non-subsidized tenants, multiplied by only that portion of the rent for which they must pay after the subsidy is received, and not the full amount of the rent.
Thus, for example, if a landlord imposes, upon non-subsidized applicants, a minimum income requirement of 40 times the full rent, it may only impose, upon subsidy recipients, a minimum income requirement of 40 times the portion of the rent for which the applicant is personally responsible after the subsidy is accounted for.
Even these precautions, however, may not be sufficient. The New York City Commission on Human Rights, in its Best Practices for Housing Providers to Avoid Source of Income Discrimination from March 2023 (“Best Practices”), available at https://www.nyc.gov/assets/cchr/downloads/pdf/materials/FiarHouse_FAQs-Landlord-English.pdf, contains a list of frequently asked questions and answers thereto.
In response to the question, “May I require all applicants to make a minimum income such as $68,000 annually or 43x the monthly rent? May I require voucher holders to find a ‘guarantor’ or co-signer?”— the Best Practices state,
When a voucher program calculates a tenants’ [sic] rent based on their income, the government has already determined that they can afford to pay their required portion. In some instances, tenants will pay no portion of the rent out of pocket. Where a tenants’ [sic] portion is calculated based on a tenants’ income, it is a violation of the Law to impose any additional income requirements on applicants for housing. You may not require guarantors or co-signers.
Id. p. 1.
The New York Attorney General’s Office is aggressively investigating many landlords for alleged violations of the NYSHRL and/or NYCHRL, contending that the landlords’ imposition of minimum-income requirements violates those statutes’ prohibitions on lawful-source-of-income requirements.
One means of challenging lawful-source-of-income anti-discrimination statutes that has thus far been successful, albeit also only at the trial level, has been that the statutes are unconstitutional in that, through the means of operation of the section 8 program, landlords accepting section 8 vouchers as partial or total payment of rent are required to enter into Housing Assistance Program (HAP) contracts provided by the federal government that, as presently formulated, require the landlords to waive their Fourth Amendment protections against warrantless searches of their properties and of their records.
In People by James v. Commons West, LLC, 80 Misc. 3d 447 (Sup. Ct. Cortland County 2023) (“Commons West I”), the Attorney General of the State of New York sought, inter alia, to enjoin numerous respondent landlords in the City of Ithaca, who had refused to participate in Section 8, from refusing to rent or lease apartments to Section 8 recipients, and sought restitution for consumers injured by the respondents’ conduct, id. at 448.
The Attorney General argued that landlords’ refusal to accept Section 8 was a violation of the NYSHRL. The respondents argued that compelling participation in Section 8 impermissibly required landlords to waive their rights under the Fourth Amendment to the United States Constitution.
A landlord could accept a Section 8 voucher as payments only by entering into a Housing Assistance Payment contract (“HAP contract”) with a Public Housing Agency (“PHA”), id. at 449, and the HAP contract, which by federal regulation was required to be in the form required by the United States Department of Housing and Urban Development (“HUD”), id. (citing 24 C.F.R. §982.451(a)(1)), required the landlord “to consent to inspection of ‘the contract unit and premises at such times as the PHA determines necessary,’” id. (quoting HAP contract), and to provide the PHA, HUD, and the Comptroller General of the United States “full and free access to the contract unit and the premises, and to all accounts and other records of the owner that are relevant to the HAP contract,” id. (quoting HAP contract) (internal quotation marks omitted), including “any computers, equipment or facilities containing such records.,” id. (quoting HAP contract) (internal quotation marks omitted) The HAP contract does not require that any searches provided for therein to be conducted pursuant to a search warrant. See id.
In Commons West I, Supreme Court, Cortland County agreed with the respondent landlords, holding that the NYSHRL’s prohibition on lawful-source-of-income discrimination was unconstitutional, in that it compelled landlords to waive their Fourth Amendment right against warrantless searches. Id. at 450-51.
The Fourth Amendment provides, “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.” U.S. Const. Amend. IV.
After noting that the case presented an issue of first impression, Commons West I, 80 Misc. 3d at 450, Commons West I found that New York Court of Appeals precedent had “specifically held that laws which authorize inspections of residential rental properties without either the consent of the owner or a valid search warrant violate the Fourth Amendment, and specifically noted that a property cannot be indirectly compelled to consent to a search.” Id. at 451 (citing Sokolov v. Village of Freeport, 52 N.Y.2d 431, 435-37 (1981)).
Furthermore, the court found that the lawful-source-of-income provision of the NYSHRL also violated the Fourth Amendment “by compelling landlords to consent to warrantless searches of their records.” Id.
The Attorney General’s office then moved to renew, arguing that there had been a change in the law since the Commons West I decision that remedied the constitutional defect. The same court, in People by James v. Commons West, LLC, __Misc. 3d ___, 224 N.Y.S.3d 364 (Sup. Ct. Cortland County 2024) (“Commons West II,” _____ Misc. 3d _____, 224 N.Y.S.3d 364 (Sup. Ct. Cortland County 2024), found that there had been no valid change in the law, and, even if there had been, landlords would have remained required to consent in advance to warrantless inspections of their real property and records, so that the Fourth Amendment would have still been violated. Id. at 369-72.
The court noted that the Attorney General’s office’s counsel had characterized the landlords’ objections as nitpicking, and the court forcefully held, “The US Constitution may not so easily be disregarded,” and “[t]he means of achieving any policy goal through law, no matter laudable, must comply with the Constitution.” Id. at 372.
The court commented that the constitutional violation could be avoided in the event that federal regulations were amended such as to replace, in the HAP contract, “the requirement that landlords provide advance consent for all such searches with a requirement that all searches or inspections occur only with the consent of the landlord or pursuant to a valid search warrant.” Id.
The New York Attorney General’s office has filed a notice of appeal from the order in Commons West I. Such appeal is to the Appellate Division, Third Department. However, the Attorney General’s office has not yet perfected the appeal. Most recently, it obtained, from the Third Department, a final adjournment, setting a deadline of May 8, 2025 to perfect its appeal. Thus, the issue has not yet been briefed before the Appellate Division, let alone been decided.
However, there are two principal limitations on the continued vitality of a Fourth Amendment constitutional challenge to lawful-source-of-income anti-discrimination laws. The first is that, because it is based on requirements imposed for participation in the Section 8 program, it does not preclude a finding of discrimination in the event that the applicant is receiving a government subsidy from a source other than section 8, such as, for example, a state or city voucher program. To these authors’ knowledge, a landlord is not required to submit to warrantless searches in order to accept benefits from such programs.
The second is that, while the present version of the HAP contract requires landlords to consent to warrantless searches, as Commons West II itself noted, HUD can modify the regulation regarding the HAP contract to permit inspections only upon the landlord’s consent or the issuance of a valid warrant. This would obviate a Fourth Amendment challenge.
Given the pendency of the Commons West I appeal before the Appellate Division, it is apparent that the State of New York would be best served by the Attorney General’s not pursuing violations of the lawful-source-of-income provisions of the NYSHRL and NYCHRL, as they pertain to Section 8 voucher holders, until the Appellate Division has decided the issue. Otherwise, the Attorney General will expend resources on litigation that may ultimately be obviated by an Appellate Division decision that upholds Commons West I and II.
Adam Leitman Bailey is the founding partner of Adam Leitman Bailey, P.C. Brandon M. Zlotnick is a partner in the firm’s real estate litigation practice group.
Adam Leitman Bailey, P.C. Prevents Client's Premature Eviction from Rented Townhouse and Also Prevents Client from Paying Substantial Damages Under Purchase Contract for the Townhouse
John M. Desiderio
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. Overcomes Son’s Succession Claim and Wins Holdover Proceeding and Monetary Judgment for Landlord After Trial
Vladimir Mironenko
Representing a New York City landlord in a licensee holdover proceeding against the son of a deceased tenant of record, Adam Leitman Bailey, P.C., won a bench trial and achieved a judgment of possession and money.
The tenant of record died in 2021. Our client bought the Queens building in 2023. At that time, the apartment was occupied by the deceased tenant’s son. He was not paying rent and an investigation revealed that he may not have co-resided with his father before his father’s death.
We served the son a notice to quit to a licensee and commenced a holdover proceeding. The son appeared and interposed a succession defense. We moved for and were granted discovery. He produced virtually no documents and we moved for and won a conditional preclusion order, precluding him from introducing any documents at trial, which were not produced during discovery.
The trial took place over several days in March 2025.
The prior owner of the building testified on our behalf that he knew the father well, that the son grew up in the apartment but moved out years ago, and that the son only moved into the apartment after the father died. An agent of the current owner rounded out our prima facie case.
The son testified in the narrative, and called several family members as witnesses on his behalf, including his sister and mother. The mother testified that she co-resided with the tenant of record, but was impeached with subpoenaed leases and other records showing that she was the tenant of record and maintained a Con Edison account in her own name elsewhere, and also equivocated about the son’s whereabouts during the relevant time period. The mother also listed the other address for herself as informant on the tenant’s death certificate.
We also subpoenaed the tenant’s DRIE records, which showed that the tenant claimed that he lived alone.
On rebuttal we called a longstanding building resident who dispassionately and credibly testified that he knew the family well, including the son, that the son moved out of the apartment years ago, and that the father lived alone for several years before he died.
The judge found our witnesses highly credible and found that the son failed to establish his burden of proof to prove succession rights to the apartment.
The judge directed issuance of a judgment of possession and warrant of eviction for our client. The judge also awarded to our client a monetary judgment for use and occupancy from the time of our client’s purchase of the building through the trial.
Carolyn Rualo represented the client from inception of the proceeding and in trial preparation and Vladimir Mironenko conducted the trial.
Phony Tenants Evicted
Dov A Treiman
In a building with tax breaks dependent on tenants meeting certain income limits, several tenants conspired with an outside screening agent to phony up their income records along with their placement on the waiting list for the building. Through this scheme, they got their apartments. However, the Attorney General’s Office became aware of this scheme and insisted that the landlord remove these tenants on pain of the landlord losing its tax breaks. Therefore, the landlord came to Adam Leitman Bailey, P.C. looking for means to evict these tenants and sue the criminal screening agent.
Examining the various laws, Adam Leitman Bailey, P.C. became convinced that none of the ordinary eviction statutes used in Housing Court were going to get rid of these tenants. Housing Court is meant for people who violate their leases, not for people who were not entitled to get a lease in the first place. So, Adam Leitman Bailey, P.C. put together a strategy where the State Supreme Court would declare the leases void and of no effect and the tenants should therefore be evicted by the County Sheriff rather than a City Marshal.
There were three apartments involved. One tenant caved in almost immediately and the Sheriff put the landlord in possession of that apartment. However, the other tenants fought bitterly and took full advantage of the Court’s inclination to give them every kind of break it could.
One tenant even claimed that her right against self-incrimination exempted her from the lawsuit’s requirements altogether. So, Adam Leitman Bailey, P.C. had to put together an education for the tenant and the court on the limits of this constitutional privilege. The court accepted Adam Leitman Bailey, P.C.’s argument and had that tenant evicted as well.
A third tenant tried convincing the court that because she was a student and trying to improve her life that she should be forgiven for the improper manner in which she acquired her apartment.
However, Adam Leitman Bailey, P.C. was working hand in glove with the Attorney General’s Office and made it clear to the Court that keeping this apartment for an undeserving tenant was keeping it away from one who really did qualify and really did need the help.
The Court then ordered her eviction as well, but there remained the possibility that any appeal she might take would reach a more sympathetic ear with the appellate court. Therefore, Adam Leitman Bailey, P.C. was able to convince her that if the landlord gave her enough time to gather her effects, she could avoid eviction, but she would also have to waive all rights of appeal.
The Attorney General was satisfied with all these solutions.
The case was decided on papers alone, prepared by Solomon Chouicha and Dov Treiman.
Adam Leitman Bailey, P.C. Defeats a Post-Eviction Order to Show and Secured a Mitchell-Lama Coop’s Right to Recover Possession of a Unit
Our client is a Mitchell-Lama Coop in Brooklyn, several of the residents are elderly and are holocaust survivors. We commenced a nonpayment eviction proceeding in Brooklyn Housing Court in November 2022, and we were able to secure a final judgment against the shareholder in May 2024. Thereafter, the shareholder’s guardian ad litem and daughter file orders to show to stay the execution of the eviction warrant. A New York City Marshal was finally able to execute the warrant on June 6, 2025. The shareholder’s daughter then filed a post-eviction Order to Show Cause to be restored to possession claiming that she was applying to withdraw money from her 401k and additional financial assistance to satisfy the arrears. We were notified of the filing on a Friday evening at around 10:30 p.m. and the Court schedule an appearance for the following Monday at 9:30 a.m. We were able to get the Court to reschedule appearance to Monday afternoon. At the appearance we opposed the shareholder’s motion arguing that the shareholder had ample opportunities to apply for financial assistance, the shareholder presented no evidence that she applied for financial assistance, and to restore the shareholder to possession would be it inequitable and unjust to the other shareholders. Following oral argument, the Court denied the shareholder’s Order to Show Cause.
Solomon Chouicha represented the client in this case.
Adam Leitman Bailey, P.C. Extracts Generous Buy-Out Payment for Manhattan Dental Practice from Landlord with Building in Receivership
REAL ESTATE LITIGATION
Adam Leitman Bailey, P.C. Defeats Motion to Dismiss Petition for Dissolution of Real Estate Holding Company
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Adam Leitman Bailey, P.C. Secures Writ of Assistance For Condominium Board After Common Charge Foreclosure
Danny Ramrattan
Adam Leitman Bailey, P.C. was retained by a condominium board related to a unit owner who in addition to not paying his common charges was also violating the governing documents of the condominium by illegally offering his unit for short term rentals. The unit owner – an attorney himself – was trying to engage in all different types of legal maneuvers to frustrate the board and profit off the unit.
Adam Leitman Bailey, P.C. was able to get injunctive relief against the unit owner preventing him from engaging in short term rentals of the unit.
Thereafter, Adam Leitman Bailey, P.C. moved forward with the foreclosure action ultimately being awarded foreclosure and sale, and then scheduling the action for auction.
Despite repeated attempts by the unit owner to file bankruptcy, Adam Leitman Bailey, P.C. was able to move forward with the foreclosure auction with ultimately resulted in the board being the winning bidder.
After the unit was legally transferred to the board, the former unit owner refused to remove his belongings from the unit.
Adam Leitman Bailey, P.C. prepared a motion for a writ of assistance in the foreclosure action which was granted by the Court. The Court directed the sheriff to remove the former unit owner and his belongings from the unit, and then place the board in possession.
Danny Ramrattan, Esq. of the Litigation Group at Adam Leitman Bailey, P.C. secured this result for the board.
Adam Leitman Bailey, P.C. Fights to Recover Property from Baseless Rent Control Succession Claims
Ben Rose
Adam Leitman Bailey, P.C. is on the verge of securing a landlord’s property over hotly contested, false claims of succession by the former rent-controlled tenant’s grandson. After three days of trial with 12 claimant witnesses in play, final closings are set so that, as appears inevitable, the Court can finally reject claimant’s specious assertions and vindicate the landlord’s rights.
Claimant’s grandmother was a longtime rent-stabilized tenant in landlord’s building, where her other family members also lived in other apartments. When the grandmother-tenant passed away and the apartment was set to revert to the landlord, suddenly, one of her grandsons claimed that he had been living with her in the subject apartment for the statutorily required time such that he was a successor to the rent-stabilized apartment. Evidence indicated, however, that he had actually lived in the grandmother’s family’s other apartment in the building the entire time.
At his deposition, the grandson testified under oath that he had lived there with his grandmother, and that that his brother, the tenant’s other grandson, had at no time lived with him and his grandmother in the apartment. The grandson passed away shortly thereafter and, out of the blue, his brother came forward for the first time to claim that he had also lived his grandmother such that he was now a successor to the rent-stabilized apartment.
Thorough investigation revealed, however, that numerous DMV, voting, police and other records listed the new claimant-grandson had never listed the subject apartment as his residence during the statutory period, and further, that he had only changed his address in records after his brother died and claimant had entered the succession litigation. Additionally, over claimant’s objections that continued through trial, Adam Leitman Bailey, P.C. was able to corner claimant into predicate testimony and then persuade the Court that the deceased brother’s deposition testimony – swearing that the claimant had not lived there – would come into evidence. Aggressive cross examination forced claimant to reveal numerous false statements in his testimony that severely damaged his credibility – including an admission that he had lived in his family’s other apartment – before opposing counsel ineffectively attempted to “correct” the record.
In the face of fraudulent claims threatening the landlord’s property and business, Adam Leitman Bailey, P.C. undertook in-depth investigation and analysis, then developed a focused trial strategy, that paved the way for overwhelmingly compelling witness and evidentiary presentations at trial. Adam Leitman Bailey, P.C. anticipates a complete vindication of the landlord’s rights just as soon as the final day of trial is concluded in the coming weeks.
Ben Rose of Adam Leitman Bailey, P.C. is the trial lawyer in this matter. Colin E. Kaufman did the initial investigation.
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Coop Estate Requirements
Our firm represents several Coop buildings in New York City in connection with closing the sales of their units. When the seller of a unit is the shareholder’s estate, we are often asked for coop estate requirements to sell. Here is a brief but thorough summary of what most coops will require.
NY Real Property Law § 339-ee
NY Real Property Law § 339-ee allows for a tax credit to developers of condominiums. When a sponsor is developing a condominium they will pay a mortgage tax on the underlying construction or blanket mortgage that is used to develop and build the condominium. Purchasers will receive a credit for the mortgage tax paid by the developer when they purchase the condominium units. Purchasers of the units can be contractually obligated by the developer to return the tax credit to them.
Adam Leitman Bailey P.C. Obtains Summary Judgment Ruling Dismissing Complaint Seeking Payment Of Exterminator Fees Where No Contract Was Shown To Exist To Provide Authority For Such Payment
Adam Leitman Bailey P.C. represents a Coop corporation in Queens, New York. When a new Board was elected it conducted an investigation of the books and records maintained by the prior managing agent. The Board questioned the exterminating service which had billed the Corporation over $2 million over a number of years for termite and other exterminating services. When the exterminating service failed to provide any detailed information as to the exterminating services alleged to have been performed, the Board refused to pay the last few invoices issued by the exterminating company and the exterminating company sued.
Adam Leitman Bailey, P.C. Has Been Ranked for Real Estate for the Second Edition of the Chambers New York Spotlight Guide for 2025
Adam Leitman Bailey Has Been Ranked for the 14th Year in a Row by Chamber's and Partners for Real Estate Litigation
Adam Leitman Bailey Named America’s Top 100 Bet-the-Company Litigators for 2025
“He was a miracle worker for us. He saved my husband because the stress that he was under was extremely taxing on him and literally destroying him. I would say Adam saved him and gave him his life back” – Dale Silver, the Candy Man’s Wife
Danny Ramrattan Was Featured on the Lawyers Who Cares Podcast
Maya Akselrod Receives the 2025 Raymond “Hap” Harrison Scholarship
Since the Raymond “Hap” Harrison Scholarship began, Adam has awarded scholarships to 34 students, totaling nearly a million dollars. The stories of all of these winners can be found at buildingfoundationsanddreams.com
Each of these individuals also received paid internships at Adam Leitman Bailey P.C. during their junior year. Some of their careers today have included clerking for the New Jersey Supreme Court, becoming a doctor through AmeriCorps, attending law school, becoming teachers—the list goes on.
The charity is self-funded with love and a passion for helping those like himself.
This past week, Maya, a senior at New Milford High School received the Raymond “Hap” Harrison Scholarship. The scholarship is named after Adam Leitman Bailey’s Track and Cross Country Coach in High School, who he credits much of his success, in regards to not only running but to what he has accomplished in his career. Maya was chosen out of all New Milford High School students by the Guidance Department to be a paid intern at Adam Leitman Bailey. She will be attending Binghamton University and majoring in Philosophy, Politics, and Law on a pre-law track.
