No Fraud Where Landlord Improperly Deregulated Apartment in J-51 Building

Tenants sued landlords, claiming landlord fraudulently deregulated their rent-stabilized apartment while receiving J-51 tax benefits. The court ruled against tenants, who appealed and lost. Landlord received J-51 benefits and deregulated the apartment in 2001, based on individual apartment improvements (IAIs). Landlord admitted that it had relied on the DHCR's policy before the Court of Appeals ruled in Roberts v. Tishman Speyer Props, LP, and refunded any rent overcharge. Tenants were entitled to rent-stabilized status for the duration of their tenancy and to collect any rent overcharges. But the lower court properly disregarded claimed evidence of fraud post-Roberts as irrelevant. Landlord also substantiated the IAI costs.

Stulz v. 305 Riverside Corp.: 2017 NY Slip Op 04066, 2017 WL 2231188 (App. Div. 1 Dept.; 5/23/17; Acosta, PJ, Renwick, Mazzarelli, Andrias, Manzanet-Daniels, JJ)