Legal Question in Landlord & Tenant Law in New York

Hi, in May of 2010, we began an entire renovation in the basement apartment (That was already there) of my grandparent's home. I put paid for 85% of the renovation, which a verbal agreement that we could stay rent free...since we put so much money into the apartment..new sheetrock, kitchen cabinets..etc. I helped with all labor.

We had a falling out in the beginning of July...and my wife, my son and myself have decided to move out. Since we have said we will be looking for a new place...she has been coming into our apartment (When we are not home) taking things she thinks is hers, ripped out the cable boxes in all rooms, moved our belongings from our stoarage place into our apartment, etc. We asked once for them not to come downstiars into our apartment again when no one is home...as it is ILLEGAL! The next day, things were moved, doors were unlocked, items touched...so we made a report with the police station. Which the police officer informed the LL they can not come downstairs.

Since then, we have received a summons for small claims court for owed rent. The apartment 1. is illegal and 2. We had a verbal aggreement we didn;t have to pay for all the work we put into the apartment.

My question is, legally can you sue tenants for rent in an illegal apartment?

What documents will I need to provide at the hearing to prove our case?

And, we will be out of the apartment next week. Thank you!

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