The Bonnie and Clyde icon currently leases a one-bedroom, rent-stabilised apartment in Manhattan's Upper East Side for just over $1,000 (£625) a month, almost half the going rate for the area.
On Tuesday (02Aug11), her landlord Henry Moses Jr. filed a lawsuit against the actress in a bid to have her evicted, insisting she should not be eligible for rent regulation as state laws require the tenant to use that property as their primary home - and claimed that Dunaway spends most of her time in Los Angeles.
The star has now hit back, alleging she moved out of the property in May (11) because Moses Jr. ""refused to paint the house, and bugs were everywhere"".
She tells the New York Times, ""I have not been evicted. I have chosen to leave because of the state of the apartment, and also because I am spending less and less time in New York.""
Moses Jr.'s lawyer, Craig Charie, claims Dunaway called him on Wednesday (03Aug11) and offered to hand back the apartment keys - but he's waiting for a more formal arrangement before allowing the property to be cleared of Dunaway's belongings.
Charie says, ""As of now, I don't have legal possession; she hasn't put a thing in writing. What if she goes in there and later claims, 'I had the Hope Diamond there and my Oscar in there and you took it'?""