Industry Leaders: Real Property Law

§ 234: Leveling the playing field between the landlord and tenant It isn't often that attorneys' fees are awarded to a prevailing party in a lawsuit, but the Court of Appeals' recent decision in Graham Court Owner's Corp. v. Kyle Taylor, clarified the standard by which a residential tenant is entitled to attorneys' fees in a dispute with his landlord. The result should not sit well with landlords who prefer to litigate their way into a vacant apartment. The courts' decision provided an incentive to tenants to more aggressively defend any litigation brought against them and provides incentive to a landlord to settle their disputes more quickly, or possibly choose not to litigate. Most residential leases have a standard clause that states in the event of litigation, in which the landlord is successful, the landlord is entitled to attorneys' fees. Real Property Law § 234 provides that when a residential lease permits a landlord to recover attorneys' fees, in any action or summary proceeding, as a result of a tenant's breach of the lease, a tenant may recover fees in the event of a landlord's breach or the tenant's successful defense of the proceeding by the landlord. Real Property Law § 234 states: "Whenever a lease of residential property shall provide that in any action or summary proceeding the landlord may recover attorneys' fees and/or expenses incurred as the result of the failure of the tenant to perform any covenant or agreement contained in such lease, or that amounts paid by the landlord therefor shall be paid by the tenant as additional rent, there shall be implied in such lease a covenant by the landlord to pay to the tenant the reasonable attorneys' fees and/or expenses incurred by the tenant as a result of the failure of the landlord to perform any covenant or agreement on its part to be performed under the lease or in the successful defense of any action or summary proceeding commenced by the landlord against the tenant arising out of the lease." The point of Real Property Law § 234 is to level the playing field between the landlord and tenant and to discourage landlords from engaging in frivolous litigation intended to harass tenants with limited resources. The court of appeals determined that the issue is whether the lease provides that "in any action or summary proceeding" the landlord may recover attorneys' fees incurred as the result of the tenant's breach of a leasehold covenant or agreement. If such a clause exists in the lease, the tenant has the right to attorneys' fees if it is successful in defending the landlord's claims against it. Success for a tenant is often being able to remain in the apartment. Put another way, if the tenant is able to remain in the apartment at the conclusion of the litigation, even as a result of a settlement, he may now be entitled to attorney's fees. Steven Glassberg is the founder of Glassberg & Associates, LLC, New York, N.Y. and Port Washington, N.Y.