Did Landlord Improperly Use Rent Concessions in 421-a Program?
LVT Number: #31422
Rent-stabilized tenants in a 421-a building sued landlord claiming that landlord registered illusory initial rents for apartments in the building by utilizing rent concessions. Typically, a lease gave new tenant a one-month rent concession. But landlord didn't prorate the rent over the lease period when registering monthly legal regulated rents for the building. Landlord asked the court to dismiss the case before filing an answer to tenants' complaint. The court ruled against landlord, finding that it was too early in the case to make a decision. Under the Rent Stabilization Code, a landlord participating in the 421-a tax benefit program must register "the initial adjusted monthly rent charged and paid." But the application of that provision to this case was unclear. Is the initial rent charged and paid the prorated amount (the "net effective rent") or is it the amount defendant cites in the lease? Whether the rent concessions here are actually concessions requires an exploration of the facts surrounding the building's leases. And it was unclear at this point how concessions might apply to the 421-a program. The court directed landlord to file an answer.
Chernett v. Spruce 1209, LLC: Index No. 159188/2020, 2021 NY Slip Op 31064(U)(Sup. Ct. NY; 4/5/21; Bluth, J)