Landlord Claims Prior Landlord Misrepresented That Apartment Was Deregulated
LVT Number: #30333
New landlord of apartment building sued prior landlord for fraud and breach of contract based on claimed misrepresentation that certain units were exempt from rent stabilization. After new landlord purchased the building, an unregulated tenant complained to the DHCR that he was rent stabilized and entitled to a renewal lease. The court granted prior landlord's request to dismiss the case as premature.
New landlord appealed, and the case was reopened. The issues of whether prior landlord breached the contract and misrepresented the rent-regulated status of the apartment wasn't premature, since the viability of new landlord's claim wasn't contingent on the DHCR's ultimate resolution of tenant's complaint. New landlord adequately alleged that it sustained damages at the time it commenced the action against prior landlord by virtue of having been fraudulently induced to enter into the contract of sale, and to pay an inflated purchase price for the building, as a result of the alleged misrepresentation.
Garendean Realty Owner, LLC v. 14 Lincoln Place, LLC: Index No. 2017-01426, 2019 NY Slip Op 06380 (App. Div. 2 Dept.; 8/28/19; Mastro, JP, Dillon, Maltese, Nelson, JJ)