U.S. Court of Appeals for the Second Circuit
Rent-Stabilized Leases — Local Public Assistance Exemption
Santiago-Monteverde v. Pereira
Judges Sack, B.D. Parker and Raggi
Background: The plaintiff appealed from an order by the bankruptcy court that struck her claim of entitlement to an exemption of property from her estate. She argues that the value of her rent-stabilized lease was exempt from her bankruptcy estate as a local public assistance benefit within the meaning of New York’s Debtor and Creditor Law.
Ruling: The Second Circuit certified the question to the New York State Court of Appeals. The court noted that the Court of Appeals has explained that the rent stabilization program was created to ameliorate the intractable housing emergency in the city of New York. However, the issue is whether a debtor, as a rent-stabilized tenant, prevents the assumption and assignment of her lease by claiming it is exempt as a local public assistance benefit.
Ronald J. Mann for the debtor-appellant; J. David Dantzler Jr. of Troutman Sanders for the trustee-appellee