The widespread property damage and power failures after Hurricane Sandy have opened uncharted legal territory for both residential and commercial landlords and tenants, who will likely be wrangling over who is liable for what for some time, attorneys say.
The most straightforward issue is that of rent abatements for residential tenants.
A spate of lawsuits seeking such abatements on various grounds have already been filed. One of the most ambitious is a proposed class action filed last month in Manhattan, Adler v. Ogden Cap Properties, 650292/13. The suit, which targets three landlords but seeks to add potentially hundreds of others, alleges that the landlords, including major landowner Ogden Cap Properties, owe a rent abatement because their tenants did not have electricity and other basic services after the storm. The case, still in its early stages, has been assigned to Supreme Court Justice Shirley Kornreich (See Profile).
Barbara Hart of Lowey Dannenberg Cohen & Hart, who represents the plaintiffs, said the case will be limited to particular circumstances where there is an unambiguous breach of the warranty of habitability, a provision of New York law stating that tenants cannot be charged rent if they cannot live in their units. Hart said the potential class members have very clear-cut cases because they lacked heat, electricity, water and/or elevator service, all of which have been recognized as clear-cut breaches of the warranty of habitability.
"We believe that the strict liability provisions of the warranty of habitability under New York state law provides a very clean common question that would benefit tenants who were impacted by Sandy," she said, adding that the suit could grow to encompass "tens of thousands" of tenants.
"I don't think it's a complicated dispute," she said. "It's very conducive to class certification."
The dispute is further simplified by the fact that the warranty of habitability imposes strict liability, meaning that the degree to which landlords are or are not responsible for property damage is irrelevant.
"Residential tenants may claim breach of the warranty of habitability and refuse to pay rent," said Scott Mollen of Herrick, Feinstein, who represents landlords. "Generally, landlords are responsible for habitability even where events were beyond their control."
"The problem that some of these residential landlords are encountering is that it's not really their fault, but it's their responsibility,"said Damon Howard of Ephron-Mandel & Howard.
But Hart said that many more tenants fall outside the scope of her lawsuit because their problems are more ambiguous and fact-specific.