The stakes for residential leasing in New York State are high, ever since the Housing Stability and Tenant Protection Act was passed in 2019. We have been highlighting the consequences when landlords fail to follow the law, and a recent court case regarding a rental in the Hamptons shows just what can go wrong for landlords when they don’t follow the law. Now we have an instance where the sale of a nearly $5 Million house is in jeopardy.
You may have heard about the lawsuit against Stephanie Pion and Paul Pion, an executive at Cantor Fitzgerald. If you haven’t, you can read a few New York Post articles available HERE, HERE, and HERE.
Headlines aside, the case that was filed in Suffolk Supreme Court KRAUSE ESTATES LLC vs. PION, PAUL et al (Index Number: 611100/2021) provides a case study on residential leasing and how quickly things can go awry when a landlord does not follow the Housing Stability and Tenant Protection Act.
Pursuant to the lease dated as of April 3, 2019, the Pions rented a house located at 220 Flying Point Road, Water Mill, NY for a one (1) year term beginning June 1, 2019 and ending May 31, 2020. The rent of $120,000.00 for the year was to be paid upon execution (copy of the lease available HERE)
On March 9, 2020, the Pions and their landlord executed an extension for another one (1) year term from June 1, 2020 to May 31, 2021 (Copy of the lease extension available HERE). However, in June 2019 New York State enacted the Housing Stability and Tenant Protection Act (HSTPA) which prohibited the prepayment of rent, just as KRAUSE ESTATES LLC was requesting. In addition, the HSTPA requires that all landlords provide a non-renewal notice by a certain time if a lease is not going to be renewed.
Why does all of this matter? The Pions aren’t moving out and the stakes are high. The Landlord, KRAUSE ESTATES LLC, entered into a contract of sale to sell the property for $4,970,000.00 on February 25, 2021 (Copy of the contract available HERE) and that transaction hasn’t closed. In the court documents, the Pions are asserting their legal right to stay beyond the length of the lease until a non-renewal notice is issued, as required by the HSTPA (Pion first counter-claim Paragraphs 22-25 available HERE and Pion affidavit Paragraph 10 available HERE)
Instead, the Pions and their landlord are now engaged in a protracted legal battle costing money, time, energy, and headlines.
All these headaches could have easily been avoided by having the proper procedures in place. That’s why we developed our proprietary platform RezCue so landlords, property managers, and brokers know their obligations in order to follow the complexities of the law.
Don’t think that residential leasing is as easy anymore. The 2019 reform of residential leasing laws affects all residential property rented in New York State, from small landlords to large ones, and rents at all free market price points. Ignorance of the law is no excuse, even when only one property or apartment is being rented. You will note that KRAUSE ESTATES LLC was only renting one house.
RezCue provides email and text alerts with detailed instructions so landlords, property managers, and brokers can avoid the consequences of failing to follow the law.
If you would like to discuss your specific circumstances, how we can assist you with respect to residential leasing, or more information about RezCue, please feel free to contact us at (212) 625-8505.