Insight

Adam Leitman Bailey, P.C. Wins Co-op’s Right to Retain Multimillion Dollar Security Deposit Post-HSTPA

Adam Leitman Bailey, P.C. Wins Co-op’s Right to Retain Multimillion Dollar Security Deposit Post-HSTPA

Adam Leitman Bailey

Adam Leitman Bailey

August 10, 2021 03:00 PM

In one of the first tests of the 2019 Rent Law’s provisions restricting security deposits and prepaid rent, Adam Leitman Bailey, P.C. won for an extreme upscale cooperative in Manhattan, the right to keep the multimillion-dollar, multi-year prepaid maintenance it had negotiated from a foreign national with an unsavory international reputation. Arguing that the prepaid maintenance was not subject to the 2019 law, Adam Leitman Bailey, P.C. preserved the cooperative’s ability to secure itself against its shareholder’s possible defaults. This was a particularly important victory for the cooperative as the shareholder did ultimately file bankruptcy while owing considerable maintenance to the cooperative, but the cooperative was left unharmed because of the now protected large prepaid maintenance deposit.

Bringing an action in State Supreme Court to declare entitlement to return of the bulk of the prepaid rent, the shareholder argued that the 2019 law made it illegal to retain as security prepaid rent in excess of one month’s maintenance.

Adam Leitman Bailey, P.C., however, argued that the shareholder’s reliance on the 2019 law was misplaced, that the action was based on an incorrect reading of the law, and that the law only forbade asking for such prepaid maintenance, not keeping it. The court then ruled in the cooperative’s favor, dismissing the lawsuit. Soon after this victory, the shareholder declared bankruptcy in a high profile case, making the client realize that if we had lost the case, the money would never have been seen again.

The co-op was represented by Adam Leitman Bailey, P.C. attorneys Adam Leitman Bailey, Carolyn Z. Rualo, Dov Treiman, and Jeffrey R. Metz.

Original Case Study

Adam Leitman Bailey, P.C.

Trending Articles

Johnny Depp and Amber Heard: The Best Lawyers Honorees Behind the Litigation


by Gregory Sirico

Best Lawyers takes a look at the recognized legal talent representing Johnny Depp and Amber Heard in their ongoing defamation trial.

Lawyers for Johnny Depp and Amber Heard

The Real Camille: An Interview with Johnny Depp’s Lawyer Camille Vasquez


by Rebecca Blackwell

Camille Vasquez, a young lawyer at Brown Rudnick, sat down with Best Lawyers CEO Phillip Greer to talk about her distinguished career, recently being named partner and what comes next for her.

Camille Vasquez in office

Announcing The Best Lawyers in The United Kingdom™ 2023


by Best Lawyers

The results include an elite field of top lawyers and firms from the United Kingdom.

The Best Lawyers in The United Kingdom 2023

Announcing The Best Lawyers in France™ 2023


by Best Lawyers

The results include an elite field of top lawyers and firms from France.

Blue, white and red strips

Education by Trial: Cultivating Legal Expertise in the Courtroom


by Margo Pierce

The intricacies of complex lawsuits require extensive knowledge of the legal precedent. But they also demand a high level of skill in every discipline needed to succeed at trial, such as analyzing technical reports and deposing expert witnesses.

Cultivating Legal Expertise in the Courtroom

Announcing The Best Lawyers in Germany™ 2023


by Best Lawyers

The results include an elite field of top lawyers and firms from Germany.

Black, red and yellow stripes

Announcing the 2022 Best Lawyers® in the United States


by Best Lawyers

The results include an elite field of top lawyers listed in the 28th Edition of The Best Lawyers in America® and in the 2nd Edition of Best Lawyers: Ones to Watch in America for 2022.

2022 Best Lawyers Listings for United States

Announcing The Best Lawyers in Belgium™ 2023


by Best Lawyers

The results include an elite field of top lawyers and firms from Belgium.

Black, yellow and red stripes

What If Johnny Depp and Amber Heard Had a Premarital Agreement?


by John M. Goralka

Oh, the gritty details we’re learning from the latest court battle between Johnny Depp and Amber Heard. This unfortunate airing of dirty laundry may have been avoided with a prenup. Should you think about getting one yourself?

What If Johnny Depp & Amber Heard Had Prenup?

Announcing the 2022 Best Lawyers™ in France


by Best Lawyers

The results include an elite field of top lawyers and firms, including our inaugural Best Lawyers: Ones to Watch recipients.

Announcing the 2022 Best Lawyers™ in France

Choosing a Title Company: What a Seller Should Expect


by Roy D. Oppenheim

When it comes to choosing a title company, how much power exactly does a seller have?

Choosing the Title Company As Seller

We Are Women, We Are Fearless


by Deborah S. Chang and Justin Smulison

Athea Trial Lawyers is a female owned and operated law firm specializing in civil litigation, catastrophic energy, wrongful death and product liability.

Athea Trial Law Female Leadership and Success

Announcing the 2022 Best Lawyers™ in Germany


by Best Lawyers

The results include an elite field of top lawyers and firms, including our inaugural Best Lawyers: Ones to Watch recipients.

Announcing the 2022 Best Lawyers™ in Germany

What the Courts Say About Recording in the Classroom


by Christina Henagen Peer and Peter Zawadski

Students and parents are increasingly asking to use audio devices to record what's being said in the classroom. But is it legal? A recent ruling offer gives the answer to a question confusing parents and administrators alike.

Is It Legal for Students to Record Teachers?

U.K. Introduces Revisions to Right-to-Work Scheme and Immigration Rules


by Gregory Sirico

Right-to-Work Scheme and Immigration Rules in

Famous Songs Unprotected by Copyright Could Mean Royalties for Some


by Michael B. Fein

A guide to navigating copyright claims on famous songs.

Can I Sing "Happy Birthday" in Public?