How Not to Pay Rent
Two musicians and a yogi have lived rent-free for two years in a Brooklyn loft. No, they're not living with their exasperated parents or beleaguered girlfriends. They are among the masses of New Yorkers living in illegal apartment buildings, and they stumbled onto the big advantage of residing outside the law: You don't have to pay rent.
Like a lot of young people, they moved into a place they could barely afford and lived together in a one-room loft. After a couple of years and a little research, they realized that landlords like theirs who rent out apartments in buildings not meant to be residences cannot legally collect rent, sue for back rent, or evict someone for nonpayment of rent. Thus began a long, free ride.
Of course, rent-free living is not guaranteed for tenants of illegal apartment buildings, since complex housing laws can always be reinterpreted and wily landlords can find unofficial ways to drive tenants out. However, in a city of mind-numbing rents and microscopic apartments, these three young men managed to creatively benefit from the city's illegal-housing conundrum.
Illegal loft apartments are increasingly part of the scenery in many industrial areas of Brooklynincluding DUMBO, Williamsburg, and Bushwickas demand from manufacturer tenants has fallen. In fact, some housing lawyers estimate that there are hundreds of illegally converted loft buildings in Brooklyn. In East Williamsburg alone, the New York Industrial Retention Network (NYIRN) identified 27 illegally converted loft buildings in an industrial park. The NYIRN, a nonprofit that promotes economic development, is hoping to prevent more illegal conversions and preserve space for manufacturing, but executive director Adam Friedman makes sure to say that "the solution should protect the tenants."
He clearly remembers the fiasco under the Giuliani administration when the city cracked down on illegal loft buildings and temporarily evacuated 60 tenants from one building.
In 2002, brothers Jamal and Puge Ruhe and their friend Kevin Courtney moved into a lumbering, boxy building at 170 Tillary Street in DUMBO. Although their landlord offered them residential space, the old building was registered and taxed as a factory, and officially their lease was commercial. Other artists and musicians had accepted similar arrangements over the years and subsequently transformed their austere lofts into cozy apartments. But included in their bohemian existence was the daily drama of a poorly maintained building that was never intended to house people.
"When it rains, it pisses in over here," says Puge Ruhe as he motions to a corner of their loft. "We have clumps of stuff falling from the ceiling. . . . There are no fire escapes in here. We would die if there was a fire."
After a year of leaking roofs, soaked furniture, and a locked freight elevator that was only occasionally available for use, the landlord raised their monthly rent from $1,850 to $1,890. "As musicians living on the fourth floor, we need the elevator [to move our equipment]," says Jamal Ruhe. "So that was a primary instigator in our being pissed enough to risk getting thrown out of our apartment." The roommates balked at the thought of paying even more for their crumbling space and decided that they would neither sign the new lease nor acknowledge the rent increase. They waited for the building manager to say something, but as Jamal Ruhe recalls, "Nothing happened, and by nothing I mean nothing at all. Not a tenuous nothing, no word from anyone. And that went on for the better part of the year."
The ultimate in rent control: The loft on Tillary
photo: Giulietta Verdon-Roe
Meanwhile, rumors that at least four other tenants had stopped paying rent made their way around the building. A resident from another illegal loft building told the Ruhe brothers that she lived rent-free for seven years without incident. Inspired by that knowledge, the roommates stopped paying rent altogether in 2004. Again, they were met with silence.
"We were just all in some sort of shock about it because we thought [the building manager] was going to say something bad or have some sort of serious confrontation with us," says Puge Ruhe.
But after conducting a little research, Jamal Ruhe began to understand the silence. Apartment buildings that have at least three residential units must be registered as a multiple dwelling and must have a certificate of occupancy for residential usea difficult-to-obtain piece of paperwork. If landlords don't have those documents, as was the case at 170 Tillary, they can neither compel tenants to pay rent nor evict them for nonpayment.
When the super finally questioned the roommates about rent last summer, Jamal Ruhe responded with a letter hinting at the building's illegal status. "I said, 'I'd be more than happy to start paying rent again if you can furnish me with a copy of my residential lease.' I wrote 'residential lease' five times in a paragraph and then we didn't hear from them for another six months," he says. "Not a peep."
The three roommates contend that they would have been happy to pay if the landlord had attempted to bring the building up to residential standards. The way things actually went, they felt justified in their actions.
"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.
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 outcometo 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 departmentwhich includes Brooklyn, Queens, and Staten Islandwhere 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 tenantthrough New York Supreme Court. And that route is often costly, time-consuming, and unpredictable.
The legal landscape shifted in March 2005 with the court's decision in Czerwinski v. Hayes, which held that housing courts should hear eviction cases in illegal apartment buildings as long as the landlord did not try to recover back rent. (The decision is only binding in New York's Second Department; in other parts of the city, landlords still can't go to Housing Court if their building is illegal.)
The precedent allowed Guttman to start kicking people out with relative ease. "His previous alternative was to go to Supreme Court, which takes significantly longer, probably two years instead of six months," says Guttman's attorney, Gerry Proefriedt. Last fall, after only one verbal warning months earlier, the roommates and tenants of three other lofts in the building were served with court summonses initiating holdover proceedings, a com- plicated type of eviction that does not dispute issues of rent.
Courtney and the Ruhe brothers hired Dalnoky, who asked for continuances that lengthened their rent-free living situation by several months. However, they eventually had to face the inevitable: Go to trial or agree to a settlement. As is often the case, a settlement was preferable to both sides since trial would mean months of lawyers' fees and the risk of the unknown. The other tenants who had been called to court chose cash settlementsone tenant got $8,000, another $5,000, according to Proefriedt. The Ruhes and Courtney chose time over money, and agreed to move out by July 31.
Now the roommates are caught in the chaos of moving. On a mid-June evening, Puge Ruhe sorts through a stack of old instruments, attempting to play a dented WWII bugle that's been passed down through his family. As he sorts through four years of accumulated CDs, books, mementos, and musical equipment, he says he is "absolutely unprepared" to move and has low expectations for finding a place he can actually afford. The experience of living in an illegal building has made him wonder at the strange phenomena of New York housing.
Looking out from 170 Tillary Street in apartment 405 onto a new construction site being built on Wednesday 12th of July 2006.
photo: Giulietta Verdon-Roe
"It begs the question of what you are actually paying rent for," he says. "Do you pay someone an astronomical amount of rent just to have a roof over your head, or do you pay for a certain amount of safety, or do you pay for convenience? Because we haven't had any safety or convenience living here."
The court has turned a blind eye to the landlord, who continues to take rent from residents of the former sweater factory with a leaking roof and no fire escapes. "Usually nothing happens" after a case like this, says April Newbauer, attorney in charge at Legal Aid's civil practice in Queens. "We see the same units being rented out over and over. It could go on indefinitely like that. It is not an individual judge's job to become a whistle-blower for future cases."
Meanwhile, Guttman probably won't have any trouble finding new tenants willing to pay loads of money for the soon-to-be-vacant loft. According to court documents, the landlord estimates the "reasonable value" of the loft is at least $3,000 per month. But then, "reasonable" is a relative term.
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