Agreement to Deregulate Apartment Was Unenforceable

Landlord sued to evict tenants for nonpayment of rent. Tenants claimed a rent overcharge. Landlord argued that there was no rent overcharge because tenants were unregulated. One of the tenants was rent stabilized when he moved into the apartment in 1992. In 2002, landlord discovered that an unauthorized occupant of tenant's apartment had made illegal alterations. Landlord and tenant settled this issue without litigation. Landlord agreed to let tenant add occupant to a new, deregulated lease and charged both tenants a new rent of $2,200 per month. The court ruled against landlord, finding that the apartment wasn’t properly deregulated.

Landlord appealed and lost. The agreement, which waived original tenant’s benefits under rent stabilization, was void. Tenant’s apartment could become deregulated in only one of two ways. One was if tenant moved out and the new legal rent was $2,000 or more. The other way to deregulate the apartment after the legal regulated rent reached $2,000 was to file for and obtain a high-rent/high-income deregulation order from the DHCR. Neither had happened in this case.

132132 LLC v. Strasser: NYLJ, 8/27/09, p. 36, col. 3 (App. T. 1 Dept.; McKeon, PJ, Schoenfeld, Heitler, JJ)