While cooperative boards are generally responsible for ensuring the habitability of their apartments, when disputes arise over housing conditions, the affected shareholder may not be permitted to withhold monthly maintenance payments.
In Andreas v. 186 Tenants Corp., 2022 NY Slip Op 04883 (8/9/22), the tenant/shareholders
sued the cooperative for negligence, breach of the proprietary lease, and damages stemming from recurring leaks in their apartment. The tenant/shareholders alleged that the co-op had breached the statutory warranty of habitability, and began to withhold their maintenance payments. The Appellate Division, First Department ruled that the tenant/shareholders were not entitled to withhold maintenance and upheld the lower court’s order awarding summary judgment to the co-op on its counterclaim for maintenance arrears.
The Appellate Division’s reasoning is significant and could apply broadly to limit the all-too-common use of rent withholding by litigants disputing housing conditions. The Appellate Division first looked to the rights and obligations of the parties under the proprietary lease. The Court found that the lease contained a clause that generally “precludes setoff, diminution, or abatement
of rent for property damage” except in the case of “damages by fire or otherwise.” The Appellate Division found that recurring leaks did not fall under the exception because such condition was not a “sudden and singular incident, like fire, which has the immediate impact of rendering an
apartment untenantable.” The Appellate Division analogized the text to leases that employ the term “casualty,” which the Court stated “also clearly evidences a sudden damage-causing event like a fire.” Since a recurring water intrusion is not equivalent to that kind of damage, the Appellate Division “perceive[d] no reason why the analogous phrases ‘by fire or otherwise’ and ‘by fire or other casualty’ should have different meanings within a clause in a proprietary lease [in order to] permit [ ] abatement of maintenance or rent.”
The Appellate Division next determined that the statutory warranty of habitability could not be invoked by the tenant/shareholders because they did not live in the apartment full-time. Acknowledging that “the warranty of habitability cannot be waived by the proprietary lease” (citing Real Property Law §235-b), the Appellate Division, nonetheless, held that the tenant/
shareholders “are not entitled to withhold maintenance on the ground that 186 Tenants Corp. breached the warranty” because of their sparse physical occupancy in the apartment, amounting to “only for a few days per year.”
The Appellate Division’s opinion addressed, in detail, how narrow the circumstances are when maintenance or rent may be withheld, even where there may be conditions in an apartment that require repair. Lower courts, including the Housing Court, should adhere to such appellate directives.