NO LIABILITY FOR LEGAL FEES IN DRUG HOLDOVER

Landlords are required to commence holdover proceedings against their tenants when directed to do so by a duly authorized entity or law enforcement agency, like the District Attorney's office. Upon receipt of a written notice, if a landlord fails to take appropriate legal action within five days to remove those occupants alleged to be engaged in "illegal" conduct (such as prostitution or any illegal trade, business or manufacturing), the D.A. may bring the proceeding and assess the fees and costs of the litigation to the owner, and may further seek the imposition of a civil penalty in an amount up to $5000. [Real Property Actions and Proceedings Law section 715]
What happens when a landlord dutifully complies with the D.A.'s request, but is later advised that the directive to bring the proceeding was erroneous? Is the landlord liable for the tenant's fees and costs?
Those were the precise questions considered by the court in White v. Pineda. In accordance with a notice issued by the Queens County District Attorney, landlord brought a holdover proceeding against Elena and Maria Peneda based on the allegation that their apartment had been utilized for "illegal business of narcotics." After an initial adjournment, the D.A. moved to dismiss the case against the tenants conceding that the Pinedas had not been involved in any illegal drug activity. While the case-in-chief was dismissed on stipulation, the tenants reserved the right to seek a determination on their counterclaim for legal fees. After submission of briefs, the Housing Court concluded that compelling the landlord to remit legal fees would be unfair under the given facts and circumstances.
On appeal, the Appellate Term, 2d and 11th Judicial Districts, affirmed. In addition to recognizing an inequity in awarding the tenants their fees, the Court was of the belief that the parties' lease agreement did not control and that the governing statute did not afford the tenants an entitlement to a recovery. As the Appellate Term noted:

Although the parties' lease contains a provision entitling landlord to attorney's fees in the event of a default by tenant under the terms of the lease, this proceeding was not based on such a default but was commenced by landlord at the direction of the Queens County District Attorney pursuant to RPAPL 715. In the circumstances presented, landlord's right to attorney's fees, had landlord prevailed in the proceeding, would have flowed not from the lease but from subdivision (4) of RPAPL 715, which authorizes the court, upon granting a petition pursuant to that section, to order the payment of reasonable attorney's fees. Neither RPAPL 715 nor Real Property Law 234 gives the prevailing tenant the reciprocal right to recover attorney's fees in these circumstances. Nor, in any event, would an award of attorney's fees against a landlord who was herself required by the District Attorney to commence eviction proceedings further the Legislature's remedial purpose of effecting mutuality in landlord-tenant litigation or help to deter frivolous litigation....