Drilling on Roof at 67th Street Triggers Suit: Did Renovation Breach Tenant’s Rights?

This was originally posted on the SGR Blog.

Residential leases include warranties of habitability and covenants of quiet enjoyment for the benefit of tenants of the building. But those buildings often need repairs that lead to noise and inconvenience.  And, as a recent case shows, remediation often leads to disputes between the disturbed tenants and the building’s owner.

Emily Jerome sued 20 East 67th Street Associates LLC, the owner of a seven-story residential East 67th Street property  and Samson Management, LLC. the managing agent for the building.

On January 2, 2019, Jerome moved into apartment 6R under a written one-year lease. The lease ended on January 31, 2020. Rent under the lease is $4,560.00 per month. The apartment is located on the sixth floor, two floors below the roof. The lease contains an option to renew for one year in favor of Jerome. Despite the expiration of the lease, Jerome was still in physical possession of the apartment.

Jerome complained that, when she signed the lease, a notice dated April 2018 was posted at the property advising of a “Roof Project”. Jerome was told by the exclusive broker that the project was completed; the apartment was quiet; and Jerome would not hear any construction noise.

However, from February through May 2019, loud and intrusive drilling was conducted on the roof. After a lull in construction over the summer, the drilling on the roof resumed from October through November 2019. In October 2019, Jerome learned that asbestos was being removed from the roof.

Jerome alleged that, only after she confronted the building superintendent, signs were  posted of asbestos removal that would continue until the Fall of 2020. Jerome alleged that she asked whether the construction noise would continue and whether safeguards have been employed to ensure her health and safety Jerome alleged that Samson refused to provide her with any information.

Jerome argued that her rights to quiet enjoyment and habitability of the apartment had been violated and she was constructively evicted. Jerome sought damages in the amount of $49,900 as special damages which included $28,250 in unearned rentals paid during the five months of construction, $12,000 for moving expenses, $5,000 representing the value of the lost renewal option and $4,650 representing her security deposit.

At the outset, the Court rejected the argument that Sampson, as the agent of a disclosed principal, could not be liable to Jerome. At the early procedural stage of the case, the scope of Sampson’s duties to Jerome had not been established. And the fact that Sampson was the signatory to the lease could support a finding that a fiduciary relationship may have existed between Jerome and Sampson.

To be an eviction, constructive or actual, there must be a wrongful act by the landlord which deprives the tenant of the beneficial enjoyment or actual possession of the demised premises. Constructive eviction  also exists where, although there has been no physical expulsion or exclusion of the tenant, the landlord’s wrongful acts substantially and materially deprive the tenant of the beneficial use and enjoyment of the premises. The tenant, however, usually must abandon possession in order to claim that there was a constructive eviction.

But a constructive eviction may not require physical removal from the premises  if it is demonstrated that the tenant could not use the premises for the purposes intended and had to abandon the premises under the circumstances. Failure to plead that element is fatal to a constructive eviction claim.

Associates/Samson argued that, since Jerome did not allege that she abandoned the premises (and as of the date of the motion continued to reside at the apartment), the constructive eviction claim must be dismissed. In opposition, Jerome attempted to preserve the complaint by stating that her claims were incorrectly labeled as constructive eviction claims, contending that she was seeking damages arising from conduct which resulted in a breach of her right of quiet enjoyment and habitability and negation of her right to renew the lease—and “duping” her into entering the lease knowing that her right to quiet enjoyment and habitability would be violated, a fraudulent inducement claim.

Jerome’s right of quiet enjoyment claim fell within the same parameters as a constructive eviction cause of action; namely, Jerome must have alleged (but did not assert) that she was actually evicted or abandoned the premises. Therefore, that branch of Jerome’s complaint was dismissed.

To state a claim for breach of the warranty of habitability, a plaintiff must allege that, in the eyes of a reasonable person, defects in the dwelling deprived the tenant of those essential functions which a residence is expected to provide. Jerome’s allegations about loud and intrusive drilling on the roof of the building for several months were sufficient at the pleading stage to state a claim for breach of the warranty of habitability.

To state a claim for fraudulent inducement, there must be a knowing misrepresentation of material present fact, which is intended to deceive another party and induce that party to act on it, resulting in injury. And the damages alleged from the fraud must be separate from the damages recoverable for breach of a contract. In addition, CPLR 3016 (b) requires that where a cause of action or defense is based upon misrepresentation or fraud, the circumstances constituting the wrong must be stated in detail.

Jerome alleged that she was told by the exclusive broker that the roof project had been completed and that the apartment was quiet and she would not hear any noises. But one month after moving in, she began to hear drilling on the roof, which continued for four months. Jerome failed to assert any facts that the alleged misrepresentation was made by or directed at the behest of either Associates or Samson. And Jerome did not allege a specific injury. Taking her allegations as true, Jerome failed to state a claim for fraudulent inducement.

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