The state's highest court has ruled that the city's precious, sparse rent-stabilized leases can not be used as assets in the case of bankruptcy, meaning the leases cannot be seized and sold to pay off creditors, the Times reports. The decision comes after a year-long legal battle between the state and rent-stabilized East Village tenant Mary Veronica Santiago Monteverde, who declared bankruptcy when she was unable to keep up with her expenses following her husband's death. The decision means that rent stabilized leases will essentially be treated as public assistance, like Social Security or Medicare, Gothamist points out. In the past, rent stabilized leases have largely been protected from use as public assets, although there has never been a law specifying their limitations.
Monteverde will continue to pay $703 per month for the East 7th Street two-bedroom apartment she has lived in since 1963. Under the new ruling, her son will be able to assume the lease after her passing. "This decision helps a lot of needy New Yorkers," attorney Ira Herman told the Post.
· Rent-Stabilized Leases Shielded in Bankruptcy [NYT]
· Court Finds Rent-Stabilized Apartments Can't Be Seized As Assets in Bankruptcy [Gothamist]
· Widow wins bankruptcy fight over rent-stabilized lease [NYP]
· Should Stabilized Leases Be Treated As Assets In Bankruptcy? [Curbed]