Justia Real Estate & Property Law Opinion Summaries

The case concerns a borrower who executed a promissory note and mortgage in 2007, defaulted on the loan in 2009, and faced a foreclosure action that same year by the lender's predecessor. The 2009 foreclosure action included an explicit acceleration of the loan, but the lender’s standing was disputed due to the timing of the assignment of the note and mortgage. The foreclosure case lingered for over a decade, during which the mortgage and note changed hands and were eventually assigned to the current lender. In 2022, the foreclosure action was voluntarily discontinued without prejudice. Shortly thereafter, the borrower brought a quiet title action, contending that the six-year statute of limitations had expired, making further foreclosure unenforceable. The lender then initiated a new foreclosure action, which was also pending.In the Supreme Court of New York County, the lender argued that the loan was never validly accelerated due to lack of standing in the original case. The borrower sought summary judgment, asserting that under the recently enacted Foreclosure Abuse Prevention Act (FAPA), the limitations period had expired. While the motions were pending, FAPA took effect. The Supreme Court found that FAPA applied retroactively, estopped the lender from challenging the validity of the 2009 acceleration, and granted judgment for the borrower, cancelling the mortgage. The Appellate Division unanimously affirmed this decision.The New York Court of Appeals reviewed the case. It held that FAPA’s relevant provisions (sections 4, 7, and 8) apply retroactively to pending actions and do not violate the federal Due Process or Contract Clauses. The Court found that FAPA validly estops the lender from disputing the prior acceleration and that the limitations period had expired, supporting quiet title relief for the borrower. The order of the Appellate Division was affirmed. View "Van Dyke v U.S. Bank, Natl. Assn." on Justia Law

In this case, the dispute centered on a Brooklyn property subject to both senior and junior mortgages. After the original borrower defaulted on the senior mortgage, a loan servicer (Central Mortgage Company) commenced a foreclosure action in 2007 but later discontinued it without prejudice in 2017. Subsequently, Article 13 LLC acquired the junior mortgage and, in 2020, filed a quiet title action in federal court seeking to have the senior mortgage canceled as time-barred under New York’s statute of limitations.The United States District Court for the Eastern District of New York initially found that there were material factual disputes regarding whether the servicer actually held the note at the time it commenced the 2007 foreclosure, denying both parties’ motions for summary judgment. Shortly thereafter, the New York Legislature enacted the Foreclosure Abuse Prevention Act (FAPA), which clarified the statute of limitations for mortgage foreclosures and addressed abusive litigation practices. Article 13 LLC moved for reconsideration, arguing the new law applied retroactively. The district court agreed, concluding that FAPA retroactively applied and precluded the senior mortgage holder from contesting the validity of the prior foreclosure acceleration, and further held that this retroactive effect did not violate due process rights.On appeal, the United States Court of Appeals for the Second Circuit certified two questions to the New York Court of Appeals regarding the retroactive application of FAPA and its consistency with the New York Constitution’s due process protections. The New York Court of Appeals held that FAPA applies to all foreclosure actions in which a final judgment of foreclosure and sale had not been enforced before its effective date, including those pending at the time of enactment. The court further held that FAPA’s retroactive application does not violate substantive or procedural due process under the New York Constitution. View "Article 13 LLC v Ponce De Leon Fed. Bank" on Justia Law

A nonprofit religious organization based in Queens purchased a 73-acre parcel in the Town of Callicoon, Sullivan County, in 2018. Although the organization originally intended to use the property as a retreat center, testimony established that its actual use involved farming vegetables on about one cleared acre for charitable distribution to low-income residents in Queens. Occasional overnight stays involved religious activities, but there was no evidence of regular organized religious services or use as a retreat center. The Town Supervisor, who lived nearby and farmed part of the property without a formal agreement, confirmed the farming use but did not observe overnight retreats.After the Town Assessor denied a religious use tax exemption for the property for the 2021 tax year, the organization filed a grievance complaint, which was denied by the Town’s Board of Assessment Review. The organization then initiated an RPTL article 7 proceeding in Supreme Court, challenging the denial. A similar process occurred for the 2022 tax year, and both proceedings were joined. Supreme Court held a nonjury trial, found all witnesses credible, credited the organization’s testimony about actual use, and granted the petitions for both tax years, concluding the property was exempt. The Appellate Division affirmed this decision, with one Justice dissenting.The New York Court of Appeals reviewed the case. It held that the lower courts applied the correct legal standards: the burden to prove entitlement to exemption rests with the party seeking it, while the burden to prove a zoning violation rests with the municipality. The Court of Appeals found record support for Supreme Court’s factual findings and concluded that the Town failed to prove a zoning violation sufficient to defeat the exemption for both years. The order of the Appellate Division was affirmed, with costs. View "Matter of First United Methodist Church in Flushing v Assessor, Town of Callicoon" on Justia Law

A commercial landlord and tenant entered into a lease for office space, which was later amended to include a limited personal guaranty by an officer of the tenant. The guaranty, often referred to as a "good guy" guaranty, stated that the guarantor would be liable for the tenant’s monetary obligations under the lease up to the date the tenant and its affiliates had completely vacated and surrendered the premises, provided the landlord was given at least thirty days’ notice. The tenant stopped paying rent and utilities in 2020, notified the landlord of its intent to vacate, and surrendered the premises at the end of November 2020.The landlord sued both the tenant and the guarantor in the Supreme Court, New York County, seeking unpaid rent and expenses from before and after the surrender, as well as attorneys’ fees. The Supreme Court initially granted summary judgment to the landlord for pre-vacatur damages but denied summary judgment for post-vacatur damages pending further discovery. Upon reargument, the Supreme Court granted summary judgment for post-vacatur damages as well, holding both the tenant and guarantor jointly and severally liable. The Appellate Division, First Department, affirmed, reasoning that the guaranty required the landlord’s written acceptance of the surrender for the guarantor’s liability to end.The New York Court of Appeals reviewed the case and reversed the lower courts’ decisions. The Court of Appeals held that, under the terms of the guaranty, the guarantor’s liability ended when the tenant vacated and surrendered the premises, and that liability was not conditioned on the landlord’s acceptance of the surrender. The court found that the language of the guaranty was clear and did not require the landlord’s written acceptance, and that interpreting it otherwise would render key provisions superfluous. The court denied the landlord’s motions for summary judgment on post-vacatur damages. View "1995 CAM LLC v. West Side Advisors, LLC" on Justia Law

In 2019, the New York Legislature enacted the Housing Stability and Tenant Protection Act (HSTPA), expanding rent stabilization to all municipalities in the state. The City of Kingston declared a housing emergency on August 1, 2022, opting into the Emergency Tenant Protection Act (ETPA). Petitioners, a group of landlords, sought to invalidate Kingston's opt-in and two guidelines set by the Kingston New York Rent Guidelines Board (KRGB).The Supreme Court upheld Kingston's emergency declaration, finding the city's survey methodology reasonable. However, it vacated the KRGB guidelines, ruling that the fair market rent guideline required a case-by-case determination and that the rent adjustment guideline lacked statutory authority.The Appellate Division modified the Supreme Court's order, reinstating the KRGB guidelines. It held that the emergency declaration was based on a good faith study and that the fair market rent guideline did not require a case-by-case assessment. The rent adjustment guideline was also upheld, as the ETPA allows for rent adjustments without specifying that they must be upward.The New York Court of Appeals affirmed the Appellate Division's decision. It found that the City's 2022 survey was reasonably reliable and relevant, supporting the emergency declaration. The court also upheld the fair market rent guideline, noting that it did not have an impermissibly retroactive effect, as no refunds were issued for periods before August 1, 2020. The challenge to the rent adjustment guideline was deemed unpreserved and not properly before the court. View "Matter of Hudson Val. Prop. Owners Assn. Inc. v City of Kingston" on Justia Law

The petitioner, owner of an apartment building in Manhattan, filed an application with the Division of Housing and Community Renewal (DHCR) in 2019 to amend its 2016 and 2017 annual registration statements. The petitioner claimed that the registrations erroneously stated that unit 1B was temporarily exempt from rent stabilization due to owner/employee occupancy, while it should have been permanently exempt due to a high rent vacancy in 2002. The petitioner sought to withdraw the erroneous registrations and submit new ones removing unit 1B from the total of rent-stabilized units.The Rent Administrator denied the application, stating that registration amendments could only correct ministerial issues, not substantive changes like recalculating rental history or removing an apartment from rent-stabilized status. The Deputy Commissioner of DHCR upheld this decision, agreeing that the requested amendments went beyond the scope of an amendment application proceeding. The petitioner then commenced a CPLR article 78 proceeding to annul DHCR's determination.The Supreme Court denied the petition and dismissed the proceeding, reasoning that DHCR rationally determined the requested correction was substantive rather than ministerial. The Appellate Division unanimously affirmed, noting that DHCR's interpretation of the Rent Stabilization Code (RSC) as precluding the requested amendments was rational and reasonable.The Court of Appeals of New York reviewed the case and held that DHCR's interpretation of the RSC, which limits amendments to ministerial issues, was entitled to substantial deference. The court found that DHCR's decision to deny the petitioner's application was rational, as it aimed to protect tenants from fraud, preserve agency resources, and ensure rent stabilization disputes were litigated in the proper forum. The order of the Appellate Division was affirmed, with costs. View "Matter of LL 410 E. 78th St. LLC v Division of Hous. & Community Renewal" on Justia Law

Dorothy Golobe died in 1992, leaving behind a three-story building in New York. Her nephew, John Golobe, became the estate's administrator, believing his father, Zangwill Golobe, was Dorothy's only surviving heir. An attorney testified that Dorothy's other brother, Yale Golobe, had predeceased her. Surrogate's Court found Zangwill to be the sole distributee, and he renounced his interest in favor of John, who maintained the property. However, Yale was actually alive at Dorothy's death and should have inherited half of the estate. John discovered this error in 2018 and claimed sole ownership through adverse possession. Yale's successor, the Emil Kraus Revocable Trust, counterclaimed for fraud and breach of fiduciary duty.Supreme Court granted summary judgment to John, declaring him the sole owner and dismissing the Trust's counterclaims. The Appellate Division affirmed, holding that John had established adverse possession and dismissing the fraud and fiduciary duty claims due to lack of evidence of scienter or reliance and no extraordinary duty to confirm a distributee's death.The New York Court of Appeals affirmed the Appellate Division's decision. The court held that John had acquired sole ownership through adverse possession, as his possession was hostile, under a claim of right, and open and notorious. The court also affirmed the dismissal of the Trust's counterclaims, finding no triable issue of fact regarding fraud or breach of fiduciary duty. The court emphasized that a cotenant may obtain full ownership even when neither party is aware of the co-tenancy, provided the statutory period and other adverse possession requirements are met. View "Golobe v Mielnicki" on Justia Law

Plaintiffs, tenants of a building in Queens, alleged that the defendant engaged in a fraudulent scheme to inflate rents unlawfully. The building participated in the Real Property Tax Law § 421-a program, which required compliance with rent stabilization laws. Plaintiffs claimed that the previous owner registered both a preferential rent and a higher legal regulated rent, allowing for illegal rent increases. This scheme allegedly continued for years, affecting many tenants. Plaintiffs also accused the defendant of concealing this conduct by registering a legal regulated rent that matched the preferential rent.The Supreme Court denied the defendant's motion to dismiss, finding that plaintiffs had alleged sufficient indicia of fraud to invoke the fraud exception to the four-year statute of limitations. The Appellate Division reversed, holding that plaintiffs' claims were time-barred because they could not have reasonably relied on the inflated rent figures, which were disclosed in the registration statements and leases.The New York Court of Appeals reviewed the case and clarified that to invoke the fraud exception, a plaintiff does not need to demonstrate each element of common-law fraud, including reliance. Instead, the complaint must allege sufficient indicia of fraud. The Court modified the Appellate Division's order and remitted the case for further proceedings to determine if the plaintiffs' complaint met the established standard for alleging a fraudulent scheme. The Court affirmed the dismissal of one plaintiff's overcharge claim based on a rent concession, as the defendant's evidence refuted the allegations. View "Burrows v. 75-25 153rd St., LLC" on Justia Law

Plaintiffs owned property adjacent to an unpaved road where the Town of Lodi determined that low-hanging branches and dead or dying trees posed a hazard. In 2010, the Town hired a tree service company to cut or remove fifty-five trees on plaintiffs' land, believing the trees were within the right of way. Plaintiffs disagreed and sought treble damages under RPAPL 861 (1). The parties agreed to binding arbitration, and the arbitrator awarded plaintiffs damages, including treble the "stumpage value" of the trees.The Supreme Court confirmed the arbitrator's award, and a divided Appellate Division affirmed. The Appellate Division majority held that treble damages under RPAPL 861 were not punitive but intended to capture elusive compensatory damages. The dissenting justices argued that the treble damages were punitive and could not be awarded against the Town. The Town appealed to the Court of Appeals.The New York Court of Appeals reviewed the case and held that treble damages under RPAPL 861 are punitive in nature. The Court reasoned that the statute's "good faith" provision, which reduces damages from treble to single if the defendant acted in good faith, indicates a punitive intent. The Court also noted that the legislative history and structure of the statute support the conclusion that treble damages are meant to punish and deter wrongful conduct. Consequently, the Court reversed the Appellate Division's order insofar as appealed from, with costs, and granted the petition to vacate the award in part. View "Matter of Rosbaugh v Town of Lodi" on Justia Law

A property owner sought to deregulate certain Manhattan apartments under the luxury deregulation provisions of the Rent Stabilization Law (RSL). The Division of Housing and Community Renewal (DHCR) issued deregulation orders for these apartments, but the leases did not expire until after the Housing Stability and Tenant Protection Act of 2019 (HSTPA) repealed luxury deregulation. The property owner argued that the apartments should still be deregulated despite the repeal.The Supreme Court dismissed the property owner's proceeding, holding that DHCR's interpretation of the HSTPA was reasonable. The court found that the apartments did not become deregulated because their leases had not expired before the HSTPA took effect. The Appellate Division affirmed this decision, agreeing that DHCR's interpretation was correct and that there was no improper delay by DHCR in processing the deregulation applications.The New York Court of Appeals reviewed the case and affirmed the lower courts' decisions. The court held that DHCR properly interpreted the HSTPA as eliminating luxury deregulation for apartments whose leases expired after the statute's effective date. The court found that the statutory language and legislative intent supported DHCR's interpretation. Additionally, the court rejected the property owner's argument that DHCR caused undue delay in processing the deregulation applications, finding no evidence of negligence or willfulness by DHCR. The court concluded that the apartments remained subject to rent stabilization under the HSTPA. View "Matter of 160 E. 84th St. Assoc. LLC v New York State Div. of Hous. & Community Renewal" on Justia Law