Modern Families Complicate Rent Regulation Succession Decisions

Almost 25 years ago, the New York Court of Appeals issued a landmark decision under New York City’s rent-control regulations in a case involving the occupancy rights to a rent-controlled apartment upon the named tenant’s death. The court held that the term “family” should not be rigidly restricted to those people who have formalized their relationship by obtaining, for instance, a marriage certificate or an adoption order. Rather, the court determined, the key was the “reality of family life.”

The court’s 1989 ruling, in Braschi v. Stahl Associates Company,[1] involved permanent life partners who lived in a rent-controlled apartment and who regarded one another, and who were regarded by friends and family, as spouses. After the named tenant passed away, the survivor contended that he was entitled to succeed to the apartment as a member of the named tenant’s “family.” The survivor relied on rent-control regulations that provided that upon the death of a rent control tenant, the landlord could not evict “either the surviving spouse of the deceased tenant or some other member of the deceased tenant’s family who has been living with the tenant.” The court agreed that the survivor should be afforded the opportunity to prove that he and the named tenant had such a household even though they were not married or otherwise related under the law.

After Braschi, the definition of “family” in the context of succession has been hotly contested and continuously litigated through the courts.  Moreover, much has changed over the years in New York, and throughout the country, since the court’s Braschi ruling, including New York’s adoption last year of the Marriage Equality Act, which authorizes same-sex marriages.  These changes pose new questions in the context of succession. Courts have resolved these questions only after conducting a thorough factual analysis of the relationship between the tenant of record and the non-traditional family member claiming succession.

Non-Traditional Relationships

Recently, for example, the Civil Court in Bronx County considered whether Jose Arroyo, who asserted that he had a non-traditional, mother-son relationship with the deceased rent-stabilized tenant, was entitled to succeed to her tenancy.[2]

As the court explained, Arroyo testified that he was born in Puerto Rico, came to New York in 1982 when he was about 14 years old, and was reunited with his father, who introduced him to Edga Valle as “his lady.”  Arroyo began calling Valle, who was approximately 60 years old at the time, “mom.” According to Arroyo, in 2001, his father left  Valle and returned to Puerto Rico, where he died three years later.

Despite his father’s separation from Valle,  Arroyo said that he maintained a close relationship with her. By 2004, Arroyo testified, he began staying in the apartment with  Valle for two to three days at a time.  Arroyo said that he moved into the apartment in 2005 to care for the elderly Valle. She was diagnosed with liver disease in 2006, and died in February 2010. 

Ultimately,  Arroyo, a non-family member, was granted succession because the evidence established his emotional bond and financial interdependence with  Valle such that the two were, in essence, family. 

Life Partners

Another recent decision, WSC Riverside Drive Owners LLC v. Williams,[3] involved what has come to be known as “life partners.”

The case involved a rent controlled New York City apartment leased by Judy Singer. After her death on November 4, 2010, the landlord commenced a summary holdover proceeding against Oliver Willia Williams contended, in response, that he had the right to succeed to Singer’s regulated tenancy as a non-traditional family member.

The New York County Civil Court found that Singer, who had leased the apartment beginning on May 1, 1967, and Williams had started dating in 1979 and that he was living in the apartment by the early 1980s. Their relationship ended, and in 1991 he moved into another apartment in New York City, subsequently moving overseas and returning to New York in 1996, and to an apartment on Horatio Street. The court noted that Williams indicated that he started dating Singer again in 1998, but found no evidence that corroborated his testimony that he resided at her apartment from 1998 through 2002.

The court found, however, that between 2002 and 2011, Williams no longer used Horatio Street for living purposes and that he sublet the apartment to Jeffrey Sheridan pursuant to an oral agreement that provided that Williams could use Horatio Street during the day to work, but not after 5 p.m. The court found that Sheridan paid Williams $2,200 per month rent for Horatio Street and that the two men each used two of the apartment’s four closets for themselves. The court also found that during this period, Williams “never slept” at Horatio Street, adding that Williams had testified that he spent fewer than 10 hours per day at Horatio Street. Nonetheless, the court noted, Williams signed a one year lease renewal on September 29, 2010, at a rent of $2,675 per month, and he only decided to give up Horatio Street after Singer’s death.

The court said that it was “evident” that most of Williams’ financial documents, such as credit cards and bank accounts, listed Horatio Street as his residence, adding that he also registered to vote from that residence. It also concluded that the “documentary evidence” tying him to Singer’s apartment was “minimal,” and that the “overwhelming majority” of documents listed Horatio Street as his address.

Significantly, the court found that the couple kept their finances separate:  They had separate bank accounts and separate credit cards; Singer paid for all expenses associated with her apartment, such as rent, cable, electric, and the phone bill; and  Williams did not share any part of a substantial inheritance with her.

The court also conceded that the couple did not have wills naming each other and had not taken any other steps to formalize their relationship such as through the execution of a power of attorney or health care proxy. At the time of her death, the court added,  Singer’s estate was estimated to be valued at between $100,000 to $200,000, and her brother was administrator.

Nonetheless, the court found that Williams had lived with Singer in her apartment as his primary residence for at least eight years prior to her death. In addition to what it characterized as the “credible testimony of friends and neighbors” that he lived there during this period, the court pointed to documentary evidence to support this conclusion, noting that he listed her apartment as his residence on his tax returns from 2008 through 2010 and when he was admitted to a hospital in 2007.

Moreover, the court found it “absolutely credible” that Williams did not sleep at Horatio Street from 2002 through 2010. This testimony, it stated, combined with the testimony of other neighbors and friends, led the court to conclude that Singer’s apartment was his primary residence for the eight years prior to her death, and that he lived with her during that period.

The court reached this conclusion after determining that it was “clear” that, at the time of her death, Singer and Williams “considered each other to be life [partners] or spouses.” The court said that was true even though they had married others and had never committed to marrying each other, weighing heavily their medical records, the testimony of the witnesses presented by Williams, and the fact that he cared for her during a severe depression that occurred during the last two years of her life.

The court said that it would not allow the fact that they maintained separate finances to change its conclusion, concluding that they had a long term relationship and lived together from at least 2002 through 2010 in Singer’s apartment; regularly engaged in family type activities, social and recreational activities and shared holidays and celebrations; and “held themselves out as family to society.”[4]
Jury Decision Upheld

This is not to say that courts always rule against landlords in these kinds of cases. Recently, for example, in Fort Washington Holdings, LLC v. Abbott,[5] a jury found in favor of a landlord and decided that the nephew of a deceased rent controlled tenant did not qualify as a nontraditional family member entitled to succeed to his aunt’s tenancy, based on an express finding that the nephew’s relationship with his aunt lacked “financial commitment and interdependence.” The trial court granted the nephew’s motion to set aside the verdict, and the landlord appealed. The Appellate Term, First Department, reversed and reinstated the jury verdict.

The appellate court found that the jury’s determination was supported by legally sufficient evidence and comported with the weight of the evidence, noting that the nephew’s own testimony and that of his witnesses demonstrated that he and his aunt did not jointly own property or intermingle their finances in any meaningful way; that the aunt named her son and not her nephew as beneficiary under her will and as attorney in fact in a power of attorney; that the aunt’s son handled his mother’s financial transactions and paid for durable household items, including a stove and an air conditioner; and that the nephew generally did not contribute to household costs as rent or electricity, although, so far as shown, was financially able to do so for much of his co-occupancy.

The appellate court also stated that the “sparse evidence” of financial interdependence that the nephew was able to present – his “incidental” and  “unsubstantiated” payments for holiday decorations and his aunt’s cosmetics, eye drops and the like, and his designation as representative payee of his aunt’s Social Security benefits (which were deposited into the aunt’s own bank account solely managed by her son) – did not so outweigh the landlord’s proof as to render the jury verdict against the weight of the evidence. The appellate court also ruled that the fact that the nephew and his aunt each may have had relatively limited assets did not serve to excuse the “obvious paucity of evidence as to their financial interdependence” or warrant judicial interference with a jury verdict otherwise adequately supported by the record.

Based on this evidence, the appellate court ruled, it could not say that the jury finding of no succession was without a sufficient factual foundation.

Conclusion

So-called “non-traditional” family relationships bedevil landlords, and the courts. On the one hand, the law is clear that family members who live with a named tenant may be entitled to succeed to the lease upon the named tenant’s death. On the other hand, there is potential for great abuse, given the significant value of rent-regulated apartments to both tenants and landlords.

Landlords that are faced with succession claims in these cases should ask for documentation and closely and carefully scrutinize the evidence. They also should routinely inspect their apartments and confirm who resides there so that they will not be faced with fraudulent or erroneous succession claims upon the death of a named tenant.