Non-Victorious Landlords Are Going to Have to Pay the Price

Posted on April 1st, 2015 by Legal Fee Advisors

A unanimous decision by the First Department’s Appellate Division reversed the lower court’s denial of attorneys’ fees to a prevailing tenant in an eviction case thereby essentially eliminating the “colorable claim” standard that has prevailed in the courts to date.[1]

The eviction dispute as well as the correlating overcharge (of rent) proceeding stems from the landlord and Yitzhak Pastriech, a tenant of a rent stabilized four bedroom apartment on the Upper West Side for more than fifteen years and which, in 2004, the landlord refused to honor the original reduced rent renewal agreement.[2]  Pastriech had renewed his lease under this reduced rent agreement for the past ten years, yet the landlord then refused to honor it and was requesting market price from Pastriech.[3] Pastriech filed an overcharge proceeding during which the landlord filed for Pastriech’s eviction under a holdover claim.[4] The tenant prevailed against the landlord in an Article 78 Appeal after a hearing and the tenant’s victory was adopted by the Housing Court.[5] Pastriech’s application for his “high five figure[s]” attorney fees was originally denied because, the court said, the landlord had a “colorable claim” regardless that he was not successful in his opposition.[6] This denial of fees in the eviction proceeding was reversed because “a colorable claim standard,” whereby any landlord who has a “nonfrivolous legal argument,” would essentially negate any “protections afforded by” real property law.[7]

This is definitely a situation where the Court “split the baby” by reasoning a way for the “underdog” to recover some of his attorney’s fees and may be sending a message to New York’s landlords that they will not be able to walk away free and clear when they are found to be in violation of the rights of a tenant. This, in turn, may attract even more solo practitioners to expend their time and resources to aid NYC tenants in these seemingly small, not highly lucrative proceedings knowing that the First Department’s trend is moving towards insuring their fees are paid by the landlord when unsuccessful in their claim(s).
Dawn E. Guglielmo, Esq.

Legal Fee Advisors © 2015

[1] Ben Dedell, Previaling Tenant Awarded Legal Fees in Eviction Case, New York Law Journal, http://www.newyorklawjournal.com/this-weeks-news/id=1202714184809/Prevailing-Tenant-Awarded-Legal-Fees-in-Eviction-Case?slreturn=20150008082022 (January 7, 2015).

[2] Id.

[3] Id.

[4] Id.

[5] Id.

[6] Id.

[7] Id. [Note: Attorneys’ fees were only awarded in the Housing Court holdover proceeding and not the overcharge proceeding].

For more information on how Legal Fee Advisors can help your company reduce legal costs, please contact David Paige at dpaige@legalfeeadvisors.com