Unit Didn't Become Deregulated by Rent Increase Resulting from Adding New Co-Tenant

Landlord sued to evict tenants, claiming they were deregulated. The court disagreed and dismissed landlord's claim. Landlord appealed and lost. Tenant and prior co-tenant had moved into the rent-stabilized apartment in 2013. When prior co-tenant moved out in 2014, tenant asked landlord to add new co-tenant to the lease. Landlord issued an eight-month lease to tenant and new co-tenant with the same preferential rent and expiration date of August 2015 as the existing lease. When the new lease expired, landlord took the position that the addition of the new co-tenant permitted landlord to take a lawful vacancy increase on the rent. Landlord argued that this then qualified the apartment for high-rent deregulation because the legal regulated rent then exceeded $2,500 per month.

The appeals court found that the apartment didn't become exempt from rent regulation under the "high-rent" deregulation provisions of the RSL in effect at that time because the apartment didn't become vacant. Tenant had remained in continuous possession of the apartment since 2013 and since there was no actual physical vacancy, deregulation wasn't triggered. 

200 Haven Owner, LLC v. Drachman: Index No. 570191/23, 2023 NY Slip Op 23294 (App. T. 1 Dept.; 9/28/23; Hagler, PJ, Brigantti, James, JJ)