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Ask Sam: Can my landlord make me pay his legal fees?

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Question:

My landlord is threatening to evict me from my apartment and says that if he does take me to court, I will also be responsible for his legal fees. Is this true? How much might they be? And what happens if I win?

Answer:

Your landlord's not just being greedy here, says Sam Himmelstein, a lawyer who represents residential and commercial tenants and tenant associations. "Most leases have a clause that says that if a landlord has to bring a court case about you and they win, you'll have to pay their legal fees," he tells us. "This is in almost every residential lease."

But this doesn't mean vindictive landlords will just drag you to court willy nilly, confident in the knowledge that you'll be stuck with the bill. "New York has a wonderful law that says that any time a lease allows for a landlord to collect fees, the court has to award it bilaterally," he says. "This means that if the tenant wins, then the landlord has to pay their legal fees. This gives tenants a very powerful weapon in defending cases brought by landlords."

(Note, though, that this law only applies to residential, and not commercial leases, and commercial tenants who win a legal dispute against their landlords won’t be able to get their fees back.)

While this is a big boon for tenants, in practice, things can get complicated. "To be awarded the fees, you have to be the prevailing party," says Himmelstein, "and it isn't always easy to figure out who wins." While something like an eviction case is straightforward—either you get to stay in the apartment or you don't—things aren't always so simple. "What happens in a non-payment case where you owe six months worth of rent, but your defense is that the apartment is in horrible condition," he asks. "The judge awards you a 50 percent abatement of your rent. Who won? The landlord, because they collect half the rent, or the tenant, because they didn't have to pay half?"

In most cases, awards are based on what each party was seeking, what they achieved, and if the amount of fees incurred were reasonable given the result, he notes. Bottom line: expect the legal fees to become their own point of contention if you and your landlord wind up in court. "In settlements, the issue of attorney's fees is often a question of negotiation," he adds.

This makes sense, given how steep attorney’s fees can become, especially if the case is a complex one that takes a substantial amount of time to resolve.

“In a non-primary residence case, a succession case, or an owner use case, which typically take one to two years to resolve, there will be pre-trial discovery in the form of document production, depositions, and then a multi-day trial,” Himmelstein says. “The fees could be $20,000 to $50,000 or more.”

He cites one owner use case in which the fees climbed to $240,000 after extensive motion practice, pre-trial discovery, a nine-day trial and an appeal. The tenant won, and after a negotiation, the landlord repaid $200,000 of their fees.

Of course, if the landlord had won, the tenant would have had to repay their fees. A good attorney, Himmelstein adds, will be able to anticipate when a tenant may lose a case and be on the hook for these fees, and help them negotiate an exit strategy.

“In many cases, if you settle, the landlord will waive their fees if they’re going to get the apartment back,” Himmelstein says. “If it really looks like the tenant is likely to lose, then we counsel the client that because of the exposure, the best path is to go to the landlord and offer to move out voluntarily, sometimes with a buyout payment, if they will waive the fees.”

If you do end up winning back the cost of your legal representation, the court will rule that you'll be awarded "reasonable" fees. "They have the right to cut it down if they feel yours were excessive, or to increase them if they feel the attorney could have charged you more," says Himmelstein. Even if you're represented for free by legal services or legal aid, your attorney will be reimbursed for their work—but you won't personally get a cut of that cash.

There’s also an exception to the bilateral obligation law: Succession cases. When a tenant asserts their rights to succeed a relative in their rent controlled or rent stabilized apartment, and the landlord brings an eviction case against them on the grounds that they do not have this right, the landlord cannot collect legal fees if they win.

“The courts have said that if a successor loses a case, they’re not bound by lease, so even if it has an attorney’s fees clause, the landlord will not collect legal fees,” Himmelstein says. “However, if the successor wins the case, it means that they inherit the lease and take over the tenancy with all the benefits and obligations, and they can collect their fees.”

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Sam Himmelstein, Esq., represents NYC tenants and tenant associations in disputes over evictions, rent increases, rental conversions, rent stabilization law, lease buyouts, and many other issues. He is a partner at Himmelstein, McConnell, Gribben, Donoghue & Joseph in Manhattan. To submit a question for this column, click here. To ask about a legal consultation, email Sam at shimmelstein@hmgdjlaw.com or call (212) 349-3000.

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