November 14, 2017
By Adam Leitman Bailey
When 8.5 million people are living vertically in a city that’s only 22.7 square miles large, landlord–tenant battles and tenant versus tenant wars are a daily occurrence. All landlords should hire a lawyer when a tenant fails to pay rent, properly take care of the property, when any other provision of the lease has been violated, or when the tenant fails to move after the lease has terminated.
For multi-tenanted buildings, New York City has a deep, complicated jungle of incredible complex laws,
Surviving as a landlord in this morass of a city requires experienced landlord–tenant attorneys to navigate the course.
For example, some tenants pay a limited rent based on the year they moved into the apartment or the amount of years the tenant lives with their immediate family.
Many observers have noted that the residential landlord–tenant industry in New York City is more heavily regulated than the nuclear power industry. There are thresholds of regulation in New York City rental housing. The lowest threshold of complexity is for the single or two family homes, increasing with three units and a still higher layer with six units or more, the same level of complexity that the system has for buildings made up of hundreds of units.
When should a landlord hire a lawyer? As soon as a person contemplates becoming a landlord, and as long as retaining such status. Waiting to actually achieve that status would be too late. Landlords who are utterly uninformed are held to the same level of culpability as those who are well-informed, even criminal liability, fines, penalties, and massive awards of damages to tenants, based not only on the new landlord’s misconduct but that of the predecessors in title.
Upon considering the purchase of a property for rental purposes, the potential landlord needs to retain counsel to do a “due diligence” study of the property, ranging from the entry-level study of a purely commercial property to the complex study of a property having six or more residential units.
The due diligence period a potential seller is typically willing to grant is less than a month. Therefore, the potential landlord has to be rapid about retaining counsel, and counsel has to be rapid about affecting the study. Where there are six or more residential units entailed, even though due diligence is an essentially transactional field of practice, the firm doing it should be extremely well-versed in the nuances of rent regulatory law—therefore, a real estate litigation firm. Because of the rapidity of the production of the report, certain data that require weeks to obtain can only be guessed at or estimated. Due diligence reports lower risk; they do not eliminate it.
Once the purchase is affected, the landlord will need to have an ongoing relationship with a landlord–tenant litigation firm from whom the landlord can ask questions either before difficult situations arise or early on. These ongoing relationships can lead to the lawyers spotting issues before the landlord has. Regulated housing is such that, for any landlord who has more than a handful of units, legal questions about how to proceed are daily events.
Actively at the helm of the law firm he built from scratch and among New York’s most successful and prominent real estate attorneys, a New York State Judge wrote that Mr. Bailey “was the best trial lawyer I saw in my nine years as a judge in New York City.” The Commercial Observer named him as one of New York’s Most Powerful Real Estate Attorneys. Real Estate Weekly recognized him as “one of the most respected commercial real estate attorneys in not only New York City, but arguably the country.”
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