Landlords find way around housing court backlog
As nonpayment cases pile up, owners pursue money judgments in civil court
The latest eviction ban was supposed to give property owners due process — the chance to dispute a tenant’s claim that the pandemic had made it too tough to pay the rent.
One month into the new system, however, attorneys say landlords with deadbeat tenants are too gun-shy to test it. And rather than wait out another sunset date and the case backlog to follow, some are taking suits to alternative venues for a more timely judgment.
Under the ban, which landlords are challenging in court, tenants can claim protection from eviction for nonpayment by checking a box affirming that the pandemic has affected them financially. And landlords can contest that by signing an affidavit — a statement sworn under penalty of perjury — that the tenant’s hardship did not exist.
“But the opportunity to challenge the hardship declaration isn’t really an opportunity, because it still puts the burden on the landlord,” said Andrew Wagner, partner at Herrick Feinstein.
If the court deems the tenant’s hardship valid, the landlord would be subject to criminal charges, which in theory could mean a five-year prison sentence.
“The consequences could be severe,” said Martin Meltzer, partner at Belkin Burden Goldman. “So I don’t think owners want to go through that process to experiment.”
Between Wagner, Meltzer and Luise Barrack, head of Rosenberg & Estis’ litigation department, none of the attorneys has heard of a case in which a hearing was scheduled to dispute a tenant’s hardship.
Wagner said his firm is exploring means by which an owner could establish proof before signing the affidavit, such as by asking the tenant to provide proof of employment or finances.
If they don’t offer up the information, Wagner said the landlord would then have a “good faith basis” to assume they’re not experiencing the hardship they profess.
“That at least might get us over the hurdle of signing the affidavit to get us a hearing,” said Wagner.
But beyond that hurdle, there’s still the wait.
Meltzer said while hearing dates are generally assigned a few weeks after a motion is filed, the backlog is such that the court administration is leaving dates blank for the time being. Some cases filed in August have yet to be assigned an index number, Wagner said.
And even if the court does give the landlord a date sometime before Jan. 15, when the eviction ban lifts, the tenant could delay the process. Tenants who fail to respond to a court summons, or require counsel when they do show up, trigger an adjournment of the case.
“As these court-imposed delays occur, then we’re at the end of the moratorium and it basically renders the motion moot,” Meltzer said. “And they’ve wasted the money.” (Legal fees, that is.)
To bypass the housing court backlog — which attorneys say has also been complicated by vaccination requirements depleting staff — some attorneys are writing off housing court for the time being and turning to civil court for money judgments.
Unlike landlord-tenant court, which allows an owner to regain possession of an apartment, civil court is “all about the money,” said Metzler.
The attorney said he has filed hundreds of cases since July and earned clients payouts ranging from $10,000 to a quarter of a million dollars. The easiest wins are against households he knows have the money and are choosing not to pay, he said.
For example, one family with a $1.5 million home in Connecticut had leased a New York City apartment for $21,000 a month.
“A person like that clearly has money socked away, at least a couple hundred thousand dollars,” Meltzer said.
The civil route isn’t for every plaintiff. It generally comes with pricier legal fees and a payout limit of $25,000. Plus, the tenant in question has to have money; otherwise the judgment can be difficult or impossible to collect. A 25-year-old college graduate whose parents co-signed her lease isn’t a good candidate.
But in cases where the tenant has assets, Meltzer said more often than not, he’ll serve the complaint and receive a call from the respondent within a week, usually asking to settle the debt.
“It’s a wake-up call,” said Meltzer about legal actions. “We haven’t forgotten about you and we’re going after you.”
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