Apartment Became Vacancy-Deregulated in 2010

(Decision submitted by Mary D. Milone of the Manhattan law firm of Borah, Goldstein, Altschuler, Nahins and Goidel, P.C., attorneys for the landlord.)

Tenant asked the DHCR for a ruling on the regulatory status of his apartment as well as a determination of the legal regulated rent. The DRA ruled for tenant in 2017, finding that the apartment was rent stabilized and that the LRR was $577.61. Landlord appealed and won in part. The DHCR again found in 2024 that the apartment was rent stabilized but that the LRR was $2,000.47. Landlord then filed a Request for Reconsideration with the DHCR. Landlord argued that the DHCR failed to add a vacancy increase at the commencement of a new lease on Dec. 1, 2010. Landlord also argued that the finding that the apartment was rent stabilized contradicted the 2018 ruling of NY's highest court in Altman v. 285 West Fourth LLC.

The DHCR ruled for landlord. Under Altman, if the LRR upon vacancy, including vacancy increases, legitimately reached the threshold for deregulation, the apartment became deregulated as a matter of law and the landlord was then entitled to charge a market rent. Even if the market rent chosen was less than the deregulation threshold amount and no rent above the deregulation threshold was preserved, the unit would be deregulated. The apartment's rent history showed that a prior tenant's monthly rent was $1,800 under a one-year lease commencing on Dec. 1, 2009. The annual apartment registration form for 2011 indicated a LRR of $2,124. And under the 17.75 percent vacancy increase permitted at that time, the LRR would exceed the $2,000 threshold for destabilization as of Dec. 1, 2010. Landlord didn't need to charge or set forth any legal rent in the vacancy lease because the apartment became deregulated when the vacancy rent, including the vacancy increase, exceeded the deregulation threshold. The apartment therefore became permanently deregulated as of Dec. 1, 2010, based on high-rent vacancy deregulation.

Lafayette Ave Equities LLC: DHCR Adm. Rev. Docket No. MM210002RP (8/29/24)[5-pg. document]