Monday, November 30, 2009

Questions for Curatorial: Apartment Leases in the 19th Century

Curatorial Director Dave answers your questions.

Did the residents of 97 Orchard Street have leases for the apartments they rented? What were the terms of these leases?

For much of the 19th century, real estate transactions were sealed by a verbal agreement. From 1863 to 1934, when 97 Orchard Street was a residence, tenants most likely had oral leases. It wasn't until the 1920s that Lower East Side residents moved towards written leases that were more protective of tenants.

This change developed after the New York legislature instituted the Emergency Rent Laws in 1919-1920. Following a severe housing shortage, with escalating rents and widespread evictions, as well as over a decade worth of agitation on the part of tenants associations, these laws placed unprecedented emphasis on tenants obtaining written leases.

Although the Emergency Rent Laws protected tenants who made oral leases, State legislators such as Charles Lockwood and Samuel Untermeyer continually stated that written leases constituted tenants’ only real protection against illegal rent hikes and evictions.

The potential confusion and trouble caused by oral agreements was born out at 97 Orchard Street. On October 3, 1869, 97 Orchard Street resident and Hanover-born real estate broker Heinrich Dreyer met German-born baker Louis Rauch in a saloon on Avenue A. According to Dreyer, Rauch employed him to broker the sale of his bakery at the price of $3500. At that time, the two agreed that Dreyer would receive a 5% commission of $175 for arranging the sale.

According to an October 1870 court case involving Dreyer as the plaintiff and Rauch, Mr. Frederick Schmitt, and Mr. Christopher Weinz as defendants, Rauch never paid Dreyer the promised commission.

In fact, two other real estate agents claim to have brokered the sale of Mr. Rauch’s bakery at 115 Avenue A to Mr. John Rash on January 20, 1870 and were therefore each entitled to the commission.

The court determined that although Rauch made verbal agreements with all three real estate agents (Dreyer, Schmitt, and Rauch), only Schmitt had introduced buyer and seller in person. It was on this basis that the commission was awarded to Frederick Schmitt.

-- Posted by Kate

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