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Judges take holiday on retail evictions.

Judges take holiday on retail evictions

Some judges are giving derelict retail tenants a Christmas present by letting them remain in their spaces until after the holiday shopping season.

Property owners, who have been trying for months to remove these delinquent and irresponsible tenants, are hopping mad.

One owner, who asked not to be identified, said he has tried everything to get a perpetually delinquent tenant out. The tenant, whose rent is $4,500 a month, always pays on a disposses, the owner said, but just enough to clear the month. On a recent court date, the tenant agreed to enter into a stipulation to pay the rent, but the New York County judge would not accept the settlement since the tenant did not show up with an attorney.

On the return date, the retailer once again did not have an attorney and, saying he only had $2,000, begged the judge to let him remain until after the holidays. The judge did not even have the tenant turn over the $2,000, the small owner complained. The tenant is still in possession and the owner expects to find an empty storefront one morning, with the retailer keeping his holiday profits for himself and the owner left out in the cold.

Edward R. Siegel, a partner with Finkelstein, Borah, Schwartz, Altschuler, & Goldstein P.C. said although such a scenario had not yet happened to his clients, judges are aware that this is the best time of year the retailers have to make some money. "The ploy for every retailer is to get past Christmas so he can take every dollar," Siegel said.

"Even if you get a judgment," he noted, "due to delays, it will take you weeks to get a warrant."

"For any dispossess that's brought, the tenant with any brains is going say |Christmas," said I. Scot Edelstein, a partner in Novick, Edelstein & Reisman. The judge can give a stay until after Christmas, he said, and if the tenant is a department or clothing store or restaurant and convinces the judge if he doesn't do this, the business will go broke, "Judges become more lax," he noted.

Edelstein said he is seeing the commercial judges give more leeway to tenants. "Not as much as they give to residential tenants," he said, "but over the last year to 18 months we are seeing more leniency - more time for payments, - but nowhere close to that given residential tenants." Whereas a commercial tenant might have been given one or two Orders to Show Cause, he said, attorneys may now see three or four.

"Theoretically, its not their house but their livelihood and," Edelstein said, "the court doesn't want someone to lose all his work. So the issue becomes, what can we do to resolve this?"

Edelstein said a property owner could sue the commercial tenant in Civil Court for up to $25,000 in money owed. But that court does not give a possessory judgment and the owner cannot evict the commercial tenant. "Or you go to Housing Court which can throw out the tenant," he said.

On the theory that they are suffering just as much, Edelstein said, the judges are showing a consideration for the commercial tenants and "as far as owners are concerned, the courts are delaying anything."

Ruben Klein, a partner in Klein & Keenan and the president of the Bronx Realty Advisory Board, said normally the attorneys do not expect it with commercial rent cases. Klein said a lot of judges are going from the Housing to the Civil part. "It's called in the same courthouse and the same judges are trying the same calendars, "Klein said. "They already developed the psychology for the rent control cases.

"If the pressure is so great that the owner expires, then there won't be any affordable housing," Klein added. "The owners can't function and pay their bills. We can't over-require owners of affordable housing and make it impossible for them to stay alive."

Klein noted that the judges do not recognize the requirements for the tenants to deposit money in court. "When they finally give you the judgment or put it for nine or 10 days later you are being pushed farther and father behind," he said.

"A lot of commercial tenants have resorted to the delays they get in the housing court," Klein said, "and utilize it just as the rent control tenants do it, and this is the way the courts are acting today."
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Author:Weiss, Lois
Publication:Real Estate Weekly
Date:Dec 25, 1991
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