When George Boyd arrived the other day at the East Village apartment building where he has lived since 1978, he found his neighbor Alistair Economakis, who at 37 is half his age, politely holding the door open. Mr. Boyd, a retired telephone worker, nodded and walked through, but there was no exchange of pleasantries, no neighborly chitchat.

Yet this encounter was the most face-to-face communication the two men had had in months.

Mr. Boyd and Mr. Economakis live in a building at war, a century-old five-story tenement torn by the peculiarities of New York real estate. Mr. Economakis is the landlord, and since 2003 has been trying to convert the building’s 15 rent-stabilized apartments into an 11,000-square-foot home for himself, his wife, their two children and a British bulldog named Leo. Mr. Boyd is one of nine remaining tenants, who pay $675 to $1,200 per month for one-bedroom apartments; his is on the third floor, sandwiched between spaces that the Economakis family currently occupies.

In a way, each faction is living a version of the New York real estate dream. Anyone might envy the Economakises, who work at a family-owned apartment-management company and lucked into buying the building for $1.3 million  what some one-bedroom condos in the area cost today. They have both the cash and the connections to create a sprawling showpiece. But there are also countless New Yorkers who would sacrifice their firstborns (or at least a beloved pet) for a charming if cramped perch like Mr. Boyd’s in a coveted neighborhood where comparable spaces command twice or three times as much.

But these dreams have turned into a five-year nightmare including three court rulings, the most recent from the State Court of Appeals this month; countless letters written by lawyers; dueling Web sites; and dozens of skirmishes over the use of air-conditioners and the positioning of flowerpots. The Economakises reached financial settlements with six of the original occupants, turning those units into a three-story space for themselves and a duplex for guests. Now that the Court of Appeals has sent the case back to housing court, lawyers estimate a resolution could still be two years away.