The landlord served the tenant with a notice of termination for physically assaulting him and making alterations to his bathroom and kitchen without permission.After the landlord started a holdover eviction proceeding, the tenant filed an answer alleging that the landlord had assaulted him, not the other way around, and was facing criminal charges. He also claimed that he was forced to repair his bathroom and kitchen because the landlord had failed to repair damage that created unsafe and unhealthy conditions. The tenant counterclaimed for a rent abatement on grounds of breach of the warranty of habitability.

The tenant prevailed against the eviction and moved for an award of attorney’s fees based on the lease which provides that if the tenant defaults, the landlord may recover costs, including “reasonable legal fees,” incurred in re-renting the apartment. The tenant argued that, under New York Real Property Law (NYRPL) §234, this paragraph created an implied covenant giving him the right to recover attorney’s fees after winning in an eviction proceeding.
NYRPL § 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 therefore 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 the 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 landlord argued that the legal fee paragraph applied only to the cost of re-renting an apartment vacated by an eviction, and therefore did not create a broad covenant allowing the tenant to recover fees. However, the New York Appellate Division, Second Departmentfound that a landlord has nothing to lose in instituting eviction proceedings, even if the factual basis for such proceedings is frivolous, unless the landlord faces the prospect of having to pay the tenant’s attorney’s fee if the tenant prevails.

The court held that NYRPL creates an implied covenant giving the tenant the same right to recover attorney’s fees in eviction proceedings that the lease gives the landlord. This implication of a covenant in favor of the tenant is consistent with the New York Legislature’s purpose of effecting mutuality in landlord-tenant litigation and helping to deter frivolous and harassing litigation by landlords who wish to evict tenants.