Agreement to Exempt Apartment from High-Rent Deregulation Is Void

Facts: Tenant occupied two rent-stabilized apartments in the same building. In 2000, landlord sued to evict tenant from Apartment 19A, claiming that tenant didn't use that apartment as her primary residence. Landlord claimed tenant and her husband used that apartment as professional offices. Landlord and tenant signed a settlement agreement in court. They agreed that Apartment 19A was permanently deregulated, that landlord would give tenant an office lease at $4,400 per month, and that tenant had the option to renew for four two-year terms at 15 percent increases. Landlord and tenant also agreed that landlord would withdraw a pending DHCR application for high-rent/high-income deregulation of Apartment 18D, where tenant lived with her family. Landlord also agreed that it wouldn't seek high-rent/high-income deregulation of Apartment 18D at any time in the future. In 2004, landlord did file a DHCR deregulaton application. Tenant claimed that landlord was barred from doing so by the court settlement. Landlord then filed a court action, claiming that the prior settlement agreement was void because it violated the Rent Stabilization Code and public policy. The court dismissed landlord's case. Landlord appealed only that portion of the agreement by which landlord agreed not to seek deregulation of Apartment 18D.

Court: Landlord wins, in part. An agreement between landlord and tenant to waive the benefit of a statutory protection is unenforceable as a matter of public policy, even if it benefits tenant. The portion of the prior settlement agreement relating to Apartment 18D is void. But the portion of the agreement relating to Apartment 19A isn't legal either and can't be separated from the other part of the agreement. Dismissal of the case was reversed, and the case was sent back to the lower court.

Georgia Properties, Inc. v. Dalsimer: NYLJ, 4/19/07, p. 29, col. 6 (App. Div. 1 Dept.; Friedman, JP, Marlow, Sweeny, Catterson, Malone, JJ)