Prior Preferential Rent Below Deregulation Threshold Didn't Prevent Vacancy Deregulation

(Decision submitted by Paul N. Gruber of the Manhattan law firm of Borah, Goldstein, Altschuler, Nahins & Goidel, P.C., attorneys for the landlord.)

Landlord sued to evict unregulated tenant after tenant's lease expired. Tenant claimed that he was rent stabilized and that the apartment had been improperly deregulated. The court found that because landlord charged the prior rent-stabilized tenant a preferential rent, the apartment remained rent-stabilized under Rent Stabilization Law (RSL) Section 26-511(c)(14)(i) in 2014 even though the complaining tenant's legal vacancy rent was above the vacancy deregulation threshold before June 2015 when the RSL was amended to provide generally for continued rent stabilization coverage to a new rent above the deregulation threshold when the last prior rent was below that threshold.

Landlord appealed and won. The issue of whether rent increases applied in 2014 after prior tenant moved out may be used to support deregulation of tenant's apartment is governed by RSL Section 26-504.2(a). As in the decision of New York's highest court in the Altman case, the appeals court found that RSL Section 26-504.2(a) excluded from rent stabilization apartments that became vacant between 2011 and 2015 where the legal rent was $2,500 or more per month following vacancy increases.  

1650 Realty Associates, LLC v. Ovadiah: Index No. 2018-1877, 2019 NY Slip Op 29266 (App. T. 2 Dept.; 8/23/19; Aliotta, JP, Pesce, Siegal, JJ)