Court Finds Unregulated Tenant Was Actually Rent Stabilized

Landlord sued to evict unregulated, month-to-month tenant. Tenant claimed that she was rent stabilized. Landlord argued that she was entitled to collect a negotiated unregulated rent from tenant when tenant moved into the apartment in 2007 because of a high-rent vacancy of the apartment before tenant moved in.

The court ruled against landlord, who appealed and lost. Landlord’s claim that the apartment was deregulated due to a “high-rent” deregulation following a vacancy had no merit. Former Rent Stabilization Code Section 2526.1(a)(3)(iii), which was applicable until Jan. 8, 2014, governed landlord’s right to recover a negotiated first rent following a vacancy. This section provided that, where an apartment was vacant or temporarily exempt on the base date, the legal regulated rent would be “the rent agreed to by the owner and the first rent stabilized tenant taking occupancy after such vacancy or temporary exemption and reserved in a lease.” By its terms, this code section was applicable only where the first tenant after a vacancy was a rent-stabilized tenant. Therefore, since tenant moved in after a high-rent vacancy but was not offered a rent-stabilized lease, landlord wasn’t entitled to charge a first rent of $3,000 based on the fact that the apartment had been vacant or exempt prior to when tenant moved in. On appeal, landlord claimed, in the alternative, that it had combined two apartments to create tenant’s apartment before she moved in. But landlord didn’t raise this before the lower court and didn’t present proof of changes to the perimeter and dimensions of the apartment.

Esposito v. Larig: 2016 NY Slip Op 26236, 2016 WL 4019726 (App. T. 2 Dept.; 7/13/16; Weston, JP, Aliotta, Elliot, JJ)