Suffolk Bar Meeting - Ronkonkoma HUB Discussion - 7/18/12

Reminder

Tonight, the Suffolk Bar Association is hosting representatives from the Town of Brookhaven, including Tullio Bertoli, Commissioner of Planning, and Robert Quinlan, Town Attorney, who will both comment on Brookhaven's aspects of the HUB. If you are a member of the Bar Association, please attend at 6:30pm in the Board Room. 


Andrew M. Lieb
Real Property Committee Chair 

Residential Landlord's Duty to Mitigate Damages

In an issue often debated and recently re-visited by the Civil Court, Kings County, a residential landlord does not have a duty to mitigate damages when a tenant breaches the lease by vacating the premises prior to the expiration of the term.  See Kings Holding, LLC v. Terrick, 2012 NY Slip OP 51153U. The Court cited to the previous holding of Holy Properties v. Cole Products, which found that the duty to mitigate does not exist concerning commercial premises, and additionally cited to Rios v. Carrillo, which subsequently adopted the holding of Holy Properties by finding that the duty to mitigate does not exist concerning residential premises. It is important to note that in Holy Properties and Rios, both holdings of the Second Department, the leases governing each respective premises specifically provided that the landlord was under no duty to mitigate damages or that the tenant remained liable to landlord for rent upon the cancellation of the lease except as provided by law.
Furthermore,  the landlord is not entitled to rent until the lease term has expired and there is a surrender of the premises by operation of law. In Kings, the surrender occurred after the landlord had submitted a "move out form" to the tenant after the tenant had moved out without notice, notified the tenant of the amount owed in arrears and informed the tenant that it was withholding the security deposit. This date of surrender actually occurred one month after the tenant physically left the premises. The date of surrender will be case specific, but may be interpreted from the conduct of the parties, the abandonment of the premises by tenant and the landlord's acceptance of tenant's surrender.

2 Bills to Protect Homeowners in Foreclosure Die

We previously blogged about 2 proposed items of legislation that were designed to both ensure proper paperwork in foreclosures and to eliminate the shadow docket of foreclosures that have been commenced, but have not moved past the foreclosure settlement conference stage of a residential foreclosure action. 

The first proposal would require that attorneys for the lenders submit a "certificate of merit" at the start of the action, which would swear that all paperwork was proper at that time instead of just requiring such a sworn statement post settlement conferences, as is now most common. This would have been beneficial because now lenders and borrowers are engaged in a lawsuit that often is put on hold as the lenders' attorneys attempt to verify the propriety of documents without success and borrowers are stuck in limbo while they await if the lender was even the proper party to the action. 

The second proposal would have created a criminal penalty for the submission of fraudulent foreclosure documents, such as robo-signed assignments of the note and mortgage. This proposal would have heightened the level of caution applied to lenders submissions of foreclosures and also would have prevented the incorrect lender from prosecuting a foreclosure action.

While both proposals are not moving forward, the importance of these proposals having had been made should not be lost on the reader. The key is that many eyes are watching the unscrupulous conduct of lenders and that this fact, alone, puts the banks in check when attempting to foreclose on a homeowner's residence. Yes, lenders of defaulted loans have a right and should be permitted to obtain the security for the payment of their loan; the house. Yet, taking someone's home should be only undertaken under a proper legally defensible claim as the impact is far reaching and devastating to the homeowner. 

These results may have done more good than one may think. Now, all borrowers' attorneys are on notice that they should be even more vigilant in forcing a lender to prove their case in foreclosure. Do not just accept that the lender is in the right. Instead, question their claims and tactics before waiving the white flag of defeat. Only than is justice served.