How Not to Pay Rent

The lofty ambitions of tenants of illegal apartment buildings

"I've had plenty of people who have pulled this moral or ethical debate with me," says Courtney. "Like, 'How can you not pay rent? Isn't that in a sense stealing?' And my response was that it is like Robin Hood. We're just taking a little bit back from the rich. And we were definitely poor." For much of the time they lived in the loft, Courtney was making "maybe $500 a month teaching yoga." Meanwhile, Jamal Ruhe, a musician and film editor at his father's business, was just scraping by, and Puge Ruhe used most of his bartending income to launch his own record label, Strong Ridge Records.

Paul Dalnoky, a lawyer who has represented a handful of tenants from 170 Tillary, contends that landlords who rent out illegal apartments are knowingly taking the risk of dealing with long-term freeloaders. "People think paying rent is a moral obligation of some kind, but it's not. It's a business relationship," he says. "If you don't have to pay rent, don't pay it."

That's bold advice, considering that the buildings department expects to receive more than 135,000 complaints about illegal apartments this year. Of course, "legality" becomes a complicated concept when there are a number of ways that an apartment building may not be legit. According to buildings department statistics, the vast majority of illegal-housing complaints come from Queens, where one- and two-family homes have been added on to or divided without following city regulations. An apartment may also be deemed illegal if it is in an area not zoned for residential use or not in accordance with fire code regulations. Some of these violations are easy to correct, but others, as in the case of 170 Tillary, are a monstrosity of broken rules.

illustration: Neil Swaab

Unlike a simple basement apartment in a family townhouse, 170 Tillary is a large building of 40 or 50 illegal units. It is not registered as a residential building and does not meet city regulations for a multiple-dwelling unit. All of this is well-known to the city. The building's owner, 170 Tillary Corporation, was fined $350 in 2001 for illegally converting the lofts into apartments and has been slapped repeatedly with fines ranging from $800 for a crumbling exterior wall in 1998 to $2,500 last summer for its hazardous elevator. According to records from the buildings department, many of the fines remain unpaid and the problems uncorrected. Any building with uncorrected violations faces "the possibility of additional violations, which may result in a hearing and fines," says Ilyse Fink, spokesperson for the Department of Buildings. Conditions have to be deemed dangerous for the city to take more extreme action. Fink says the city may evacuate the building if there is an unsafe condition that poses an immediate, imminent danger (e.g., something that may collapse). However, it is much more common for the city to step in to correct the unsafe condition, then bill and fine the owner.

The landlord, Moses Guttman, says that receiving violations is just part of "life in the city." While it is true that most buildings receive occasional city violations for broken elevators or leaking roofs, Guttman claims to be innocent of the more serious sin of renting out illegal residential space. (This is despite the fact that in court documents, Guttman's own lawyer wrote that "the building is a multiple-dwelling unit but cannot be registered as such because it lacks a certificate of occupancy permitting residential use.") So why would he allow residents to live there for years without paying rent? "Out of my patience and mismanagement of the building," he says. And why wouldn't he sue for back rent if he was doing everything by the book? Guttman says he doesn't know the law and was simply trying to achieve an outcome—to get bad tenants out. "There's no free lunch," he says. "If you don't pay rent you lose your apartment. That's it." In this story, Guttman proved to be only half right.

The Puge sits in his apartment number 405 on 170 Tillary Street on Wednesday 12th of July 2006 where he has been living rent free for two years.
photo: Giulietta Verdon-Roe
Despite the city's formerly zealous enforcement, the trend of illegal conversions has continued. Last year, the Department of Buildings issued 500 violations for illegal building use in industrial zones, says Fink. "Not all complaints will be for illegal residential uses," she says. "However, I am told that anecdotally, that is the case for many of these violations."

While Dalnoky says it is "very rare" for tenants to take advantage of their buildings' illegal status, it does happen. "Tenants are savvy," he says. He has had at least six clients from the Tillary building who all lived rent-free for over a year and says he knew of "a whole building up in Harlem where no one was paying rent." He chuckles when he mentions this and says, "If the landlord rented it out illegally, that's the risk he took."

That risk is decreasing for landlords in New York's second judicial department—which includes Brooklyn, Queens, and Staten Island—where the rules have changed to make evictions easier.

Historically, city housing courts would not hear eviction cases regarding illegal apartment buildings, so a landlord had only one official avenue to evict a tenant—through New York Supreme Court. And that route is often costly, time-consuming, and unpredictable.

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