Case of the Week: Prospect Realty Group LLC v. Morris

LandlordsNY Member

LandlordsNY Member

The lesson to be taken away from this installment of the LNY Case of the Week is short and sweet: Ask for tenants’ tax returns during discovery. While most attorneys and owners do this to see if the household earned more than $200,000 a year for two consecutive years, which would thereby allow for high income deregulation, you should also look at another line on the tax return: The tenant’s address.

In a recent case in Kings Housing Court where the landlord sued to evict a stabilized tenant for nonprimary residence, the landlord was able prove that the tenant didn’t live in the stabilized unit full time because he includes a Long Island address on his 2015 and 2016 state tax returns. Furthermore, in response to question E(1) on his IT-201 forms (“Did you or your spouse maintain living quarters in NYC during” the year in question?), the tenant checked off a box in the negative. In other words, he both provided an alternative address and actively denied living in the city.

Given this evidence, Hon. Marcia Sikowitz wrote, “The respondent’s claim that the subject apartment is his primary residence is logically incompatible with the position he asserted on years of tax returns. Respondent did not merely use a different address than the subject apartment. He affirmatively checked off the box indicated he did not maintain a residence in NYC for 2015 and 2016.”

The landlord was awarded final judgment of possession on August 31, 2018.

What to take away: Request tax returns during discovery and always check line E(1) on tenants’ IT-201 forms.

To read more about this case, see what our friends at Landlord v. Tenant have to say.

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