Tag Archives: cure

Airbnb and Profiteering

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A NYC Housing Court judge issued a Decision/Order in 42nd and 10th Associates LLC v. Ikezi (No. 85736/2014 Feb. 17, 2015) that resulted in the eviction of a rent stabilized tenant who had rented his apartment through Airbnb at a rate much in excess of the rent approved by the NYC’s Rent Guidelines Board.

The Decision makes for a pretty good read in large part because of the incredible testimony of the tenant:

When questioned on Petitioner’s case whether Respondent charged anyone money to stay in the subject premises, Respondent first testified that he could not recall if he ever charged anyone money to stay in the subject premises for a tenancy, and then testified that he does not know if he ever charged anyone money to stay in the subject premises. Given that Respondent was being sued for eviction, that Respondent testified as such on January 21, 2015, and that Respondent’s tenancy commenced on October 10, 2014, three months and eleven days before his tenancy, Respondent’s inability to remember or know if he had charged anyone to sleep in the subject premises defies common sense. Such incredible testimony was of a piece with other testimony Respondent offered, such as his response to a question about how many nights he has slept in the subject premises with the answer that he does not keep a log of where he sleeps, Respondent’s inability to determine whether a photograph of a comforter on a bed in the ad was a comforter that he owned, Respondent’s lack of knowledge as to other addresses that might be his wife’s address, and Respondent’s testimony that he does not have an email address at the company that he is the president of. If Respondent was actually profiteering by renting out the subject premises as a hotel room, wanted to avoid testifying as such, and was trying to be clever about technically avoiding committing perjury, it is hard to imagine how Respondent would testify differently. (9-10)

The defendant’s testimony demonstrates what happens when the profit motive hits smack up against rent regulation’s policy goal of protecting tenants from large rent increases. Without defining it precisely, the Court refers to this as profiteering which it finds to be inconsistent with the goals of rent regulation and incurable to boot. Thus, the Court issued a warrant of eviction.

This seems like the right result on the law and as a matter of policy. Otherwise, more and more apartments would be informally removed from the regulated housing stock. Moreover, landlords and neighbors would be stuck with the costs of short-term stays while tenant scofflaws would get all the benefit.

Court Finds that Bank was Entitled to Enforce the Instrument Under R.C. 1303.31

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The court in deciding M & T Bank v. Strawn, 2013-Ohio-5845 (Ohio Ct. App., Trumbull County 2013) affirmed the lower court’s decision and found that appellant’s argument was without merit.

Appellant framed three issues for this court’s review. First, appellant contended that the trial court erred in relying upon the affidavit of Mr. Fisher to demonstrate that appellant had possession of the promissory note and that the copies were true and accurate. Second, appellant questioned whether appellee fulfilled the condition precedent of providing notice of the default and notice of acceleration. Third, appellant argued that there was a genuine issue of material fact as to whether appellee was the real party in interest possessing an interest in the promissory note and mortgage.

The court found that the bank’s possession of the note was shown by an affidavit, along with attached copies of the note endorsed to the bank, and one in possession of a note endorsed to that party was a holder, for purposes of R.C. 1301.201(B)(21)(a), and thus entitled to enforce the instrument under R.C. 1303.31.

The court also found that the affidavit for the bank clearly stated that the bank had been in possession of the original promissory note, and the affidavit was sufficient for the trial court to have held that the affiant had personal knowledge. Lastly, the court found that nothing suggested that voided endorsements affected the bank’s status as a holder, and thus it did not create an issue of fact and that the bank acquired an equitable interest in the mortgage when it became a holder of the note, regardless of whether the mortgage was actually or validly assigned or delivered.