A 94-year-old New York City apartment tenant has asked the U.S. Supreme Court to throw out a lower court ruling that the Resolution Trust Corp. has the power to override New York's rent control and stabilization laws.
On March 2, the U.S. Court of Appeals for the Second Circuit ruled that the Banking agency can preempt a contract or a lease under the 1989 Financial Institutions Reform, Recovery and Enforcement Act.
The decision "imperils the homes of the 10% of Americans who live in rent-controlled housing." said lawyers for Lillian Solomon and four other tenants in a May 4 petition, Lillian Solomon v. RTC.
Since 1962, Solomon has lived in a rent-controlled apartment building. In July 1987, the building was pledged as collateral for a defaulted loan. The RTC was named receiver for Nassau Federal Savings and Loan Association, the failed bank that made the loan, and sought to evict Solomon and other tenants.
Solomon said the agency would record a loss by selling the building with rent-controlled tenancies, but would earn a "substantial profit" if units were vacant.
Solomon has no written lease but has state statutory rights to stay in her apartment for as long as she pays the controlled rent, according to the brief.
The federal appeals court held that the tenancy constituted a lease. But the court also said that the banking laws gives the RTC the power to override the lease "in aid of an acute financial emergency." This power does not necessarily accommodate the tenant's right to occupy the apartment under the state's rent control law, the court said.