New York residents Frank and Elizabeth Cudar got a divorce in 2006. Frank Cudar moved out of the Staten Island rent controlled apartment they were living in, while Elizabeth continued to stay there.
New York is one of the states that have an equitable distribution law for couples seeking a divorce. Frank Cudar claimed the rent controlled apartment as his separate property and asked the judge to evict Elizabeth and give him sole possession.
Rent controlled apartments are a valuable commodity in New York, but the Appellate Division Court ruled that the apartment lease could not be distributed as either marital or separate property under New York's Domestic Relations Law.
The key to the ruling was the Appellate Court's agreement with the lower court that the rent controlled apartment was not distributable unless there was a possibility of it being converted into some form of ownership such as a co-operative or a condo.
But the Appellate Division judges differed from the lower court regarding who gets the property possession. The lower court had ruled that even possession of a rent controlled apartment could not be decided under the Domestic Relations Law. But the new judgment allows the divorce court to decide on the possession.
This allows Frank Cudar to now ask for possession of the apartment and eviction of his ex-wife under the Domestic Relations Law, even though the apartment was not considered as part of the marital or separate property. Elizabeth may still end up retaining possession, but the ruling serves as a precedent for couples seeking to distribute leased assets.