Guide to Holdover Proceedings

The Holdover Proceeding
A Marathon, Not A Race

This guide is intended for our clients who are facing holdover eviction proceedings where a landlord claims eviction for illegal subletting, nonprimary residency, owner use, nuisance or harboring pets. This informal guide, which is based on years of experience defending dozens of holdovers, provides a structure for making the right decisions as we counsel and defend you in court.

STRATEGY IS KEY
A holdover proceeding in New York Housing Court is generally a complicated, expensive and time-consuming case. As in a marathon, the contestants in a holdover proceeding will demonstrate intelligent strategy as well as endurance and tenacity if they hope to succeed. That sounds corny, but unrepresented New York tenants often give up valuable apartments, not because they are losing their holdovers, but because they are exhausted by the stress of having their court cases drag on.

Your landlord has more resources than you do. We need to develop a strategy designed to defeat an adversary with vastly superior resources. Such a strategy is often known as a guerilla strategy. The concept of guerilla strategy is applied in business books about "guerilla marketing," and "guerilla management," where small companies use technology and smarts to even the playing field with much larger, richer corporations. But of course, the concept of guerilla strategy comes from revolutions such as the American Revolution. Almost every tyranny you can name was brought down by a small group of people who were outnumbered, outspent, and outgunned. The lesson is that if your competition has you outspent, you have to outsmart.

So how do you fight it? You apply intelligent strategy to even the playing field. The less resources you have, the smarter you have to be. When clients begin to panic, or let the stress of litigation affect their judgment, they make bad decisions.

The key to any strategy is planning. I help my clients to see three strategies in defending holdovers:
· legal strategy;
· logistic strategy;
· settlement strategy.

LEGAL STRATEGY

About 90% of housing court cases involve an unrepresented tenant. Most of those cases involve nonpayment proceedings -- where the landlord is suing for the payment of rent.

Holdovers are different from nonpayment proceedings. In a holdover, the tenant faces the permanent loss of his or her apartment based on a legal interpretation of the lease or of any of three different statutory regimes -- the RPAPL, the Rent Control Law or the Rent Stabilization Law. While the charges are complicated, the defenses are much more complicated, and can involve any number of statutes, as well as principles of common law.

As our client, your legal strategy will be tailor-made to your case. In general, our strategy is to focus the court on the legal standard that specifically applies to the landlord's claim for eviction, and to hold the landlord strictly to that legal standard. Other aspects of our strategy cannot be shared in the public version of this document.

LOGISTIC STRATEGY
If you are not prepared to spend significant resources to defend a holdover proceeding, you will very likely lose your case. But that does not mean that you must spend the same resources to match the landlord. The landlord will always have you outspent.

None of my clients are especially rich, but all of them are facing holdover proceedings by wealthy landlords. My strategies are designed for tenants whose time and money are limited. Thus, the logistic strategy - how you budget your time and money -- is just as important as the legal strategy. Even if your landlord's claims are frivolous, they will prevail if they can succeed in wearing you down.

For example, the holdover proceeding can wear you down if you miss a lot of time from work from all the preliminary court appearances. That is why I advise my clients to let my staff handle the court appearances unless the client's presence is absolutely necessary.

Before you look at how much time and money you should be willing to expend, look at the other side. How much is your landlord willing to devote to winning its holdover?

Without reviewing all the different ways that landlords can boost the rents after they evict you, assume that a landlord can get an additional $700.00 per month by getting you out. The landlord makes an additional $84,000 profit over the next 10 years. And of course, this $84,000 is enhanced by the regular guidelines increases - not to mention that the increase could bring the rent over $2,000 per month, which could take the apartment out of rent stabilization entirely. Thus, if the landlord succeeds in evicting you, he stands to make much more than $84,000. That makes the landlord highly motivated to win. Based on the profits at stake, why wouldn't the landlord spend $20,000 to $30,000 on lawyers to attempt to evict you?

Now look at your situation - the tenant's point of view. What would you do if you were evicted? The reason that the landlord can get a $700.00 per month increase on your apartment is because that is what the market in your neighborhood can bear. Therefore, it is only logical to conclude that if you had to move to a comparable apartment in your neighborhood, you will pay $700.00 per month more than what you are paying now. Over ten years, your family would be losing $84,000. But that estimate does not include the costs and losses associated with suddenly moving. And of course, there are other costs that are hard to calculate, such as the possibility of your children having to switch schools, or the misfortune of having to move to a smaller apartment.

Multiplied over the years, you will realize that the apartment is the probably the most valuable financial asset you have. You would have to have a pretty sizable account at Charles Schwab to be making the $700.00 per month that you save by living in a rent-stabilized apartment.

Based on the math, you stand just as much to lose as your landlord does. But is that even true? You probably have more to lose than your landlord does. After all, the landlord has several apartments; you have only one.

Although you have more to lose than your landlord, the reality is that you simply don't have as much money to spend on this case as your landlord does. Therefore, you have to be smart with it. Here are 4 tips on how to spend smart:

1. If your landlord is not presently accepting the rent, save the rent money. You will most likely be asked for it later. It is costly and pointless to lose you valuable apartment because you spent the rent during the pendency of the case.
2. When you give us your papers, have them organized in file folders, in chronological order. I can bill less time when I don't have to swim through disorganized documents.
3. Gather evidence early. In a lawsuit, early evidence gathering is the biggest money-saver; sloppy or slow evidence gathering is the biggest money-waster. Early evidence preparation can lead to an early settlement of your case. Slow evidence gathering can give the landlord an opportunity to file a motion for your eviction based on the failure to produce evidence. Fighting one of those motions puts you on the defensive and costs a lot of money.
4. Plan on committing the necessary funds. It is important to plan ahead, and budget enough money to take you through all the stages of a holdover proceeding. Luckily, time is often on your side in the early part of the case. You have often a few months to muster the necessary funds. Knowing your budget and committing the necessary resources prevents costly mistakes. For example, a tenant came to my office after she was evicted. She told me that she had budgeted enough money for the pre-trial stages of her holdover case, but ran out of funds for the trial. Thus, all the money she spent hiring the lawyer to prepare the evidence was wasted, because she failed to hire the lawyer for the final stage of presenting the evidence to the judge. The poor lady thought she could present the evidence herself, even though she had never even seen a trial. She tried to learn trial strategy while on trial risking the most valuable asset she has in the world! The lesson is, it pays to plan ahead. And if you don't have the necessary resources, talk it over with us to modify your strategy.
   

SETTLEMENT STRATEGY
Most holdover proceedings result in a settlement in which both sides are a little happy and a little unhappy. What's most important is to formulate realistic goals and to be true to those goals, and not to get caught up in the emotions of the negotiation. Negotiation is as much a psychological skill as it is a legal skill. It is important to keep an even keel. Several landlord attorneys are true professionals. Sadly, many are not.

In negotiation, landlords attorneys employ time-tested tactics to frustrate you, haggle you, and terrify you. Here are five tactics that you can expect landlords' attorneys to use in negotiation:

1. Yelling. Yelling at tenants in the hallway is a favorite tactic to distract some emotional tenants from assessing their real options. Some landlord lawyers think you will throw out your legal, logistic, and settlement strategy if they stomp around and yell, "You're going to get evicted!" (As if we have not considered that possibility.) Counterstrategy: My clients don't waste their time hanging out in the hallways of the housing court. I handle the preliminary court appearances and consult with my clients by phone, just like the landlords do. If landlord attorneys have something to say, they say it to me. I notice that there is a lot less theatrical yelling when you don't provide them an audience.
2. Threaten legal fees. In a trial, the losing party often has to pay the winner's attorneys' fees. In a settlement, however, legal fees are usually waived - in other words, when it comes to legal fees, everyone calls it even. Landlord's attorneys often use the threat of legal fees as leverage in a negotiation, because they know that a tenant is often terrified by the prospect of having to pay the landlord's attorney tens of thousands of dollars. Counterstrategy: we analyze your lease in advance to know whether the threat is real, and assess the true risk level; remember that there is a possibility that the landlord has to pay your legal fees, not the other way around.
3. Delay. If the landlord attorney feels he is not getting the offer he wants to hear, he may drag out the case for another court appearance, or perhaps make a motion, simply to buy time. Counterstrategy: delay is nothing new in housing court, and so it is not surprising for a landlord's attorney to use delay to its advantage. The best strategy is to oppose delay (when it is in our interest to do so), and to maintain focus on our settlement goals. (Further strategy can be discussed confidentially.)
4. Forum shopping. The judge often affects the kind of settlement that is possible. Sometimes, if landlord attorneys don't like a particular judge, they ask for a trial - not because they want a trial, but because they get a different judge who might have a different spin on the case. Counterstrategy: no counterstrategy is necessary because this judge-shopping tactic rarely works. When the case goes to trial, the judge is still randomly picked. We know the judges just as well as the landlords do.
5. "What's your bottom line?" This is a trap. I don't believe in "bottom line," but if you in fact give the lowest possible offer in the hopes that the landlord will agree with somebody so reasonable, you will be dissappointed. The landlord attorneys have to be able to whittle down any offer you make, or else they won't look good in front of their clients. Counterstrategy: simply expect that whatever settlement you initially offer, the other side is going to say it is unreasonable. Don't worry. As long as there are offers back and forth, both sides are acting in good faith. (If there is no offer coming from the landlord side at all, don't worry: judges hate attorneys who fail to advocate their clients' settlement positions.)

CONCLUSION

Maximize your defenses and minimize risks. In a short few days of a housing court trial, you are placing possibly your most valuable financial asset -- your rent-regulated apartment -- on the line. As a tenant law firm, we believe in moving quickly with a focused strategy from day one, because preparation is the key to a successful defense in housing court.