Tuesday, May 23, 2006

Landlord-Tenant Tidbit: Withholding Rent

Can a tenant withhold rent if the landlord fails to make necessary repairs? As always, this is not legal advice, but just some basic information on a topic that comes up frequently in my non-blogosphere life.

This is a complex bit of law, and I won't delve too deeply here. In part, because there isn't a single clear answer. In part, the answer is an unqualified "yes". The Court of Appeals, in Park West Management Corp. v. Mitchell, 47 N.Y.2d 316, 391 N.E.2d 1288, 418 N.Y.S.2d 310 (1979), held that the duty to pay rent is interdependent with the landlord's duty to maintain a habitable rental premises.

The "yes" becomes slightly fuzzier when the issue turns to what is "habitable." The Real Property Law section 235-b contains a statutory warranty of habitability, which states that rentals shall not be hazardous to life, health or safety. The on-the-ground meaning of those broad terms has been the subject of countless court cases. Aside from broad guidelines established in caselaw, much of the decision on whether or not the statutory warranty has been violated will rest in the court's discretion. Additionally, a tenant can't just decide unilaterally to stop paying rent due to conditions. The landlord must be informed, usually in writing, that there are problems that need to be fixed or else withholding will occur.

The court? Where did that come from, you might be asking? Well, I'll pretend you were. Withholding due to bad conditions operates as a defense to an eviction proceeding. Even if the place is falling down around the tenant, the landlord still has the right to pursue an action to get paid, such as an eviction proceeding. The court then decides whether the withholding was justified and what rent, if any, is owed for the use of the property. What often happens in these cases is that, for example, a house without water still has some shelter value from the elements and the court will order 50%, or 10%, or some discretionary figure, be deducted from the rent owed.

The second qualifier with rent withholding deals with the fact that rent must actually be "held" someplace. If a tenant claims rent withholding, but has spent the money, it can appear to the court that the tenant is just raising weak claims to delay an eviction. The preferred method of withholding is to place the money in an attorney's trust account or deposit it with the court. This money indicates good-faith withholding and not an attempt to get around the system. It's important to note, though, that in some instances the court has the power to hold this money and pay for repairs out of it, if the landlord refuses to fix the problems.

Like I said up top, it's not an easy area of law. In fact, more often that not in the past I've felt tenant-clients would have been better off moving instead of trying to force repairs. If you're a landlord, realize you have duties under the law to maintain certain standards, or else the rent can be docked. If you're a tenant, realize that withholding is not a license to not pay rent, and is part of a complex procedure to assure adequate housing.


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