Apartment Temporarily Exempt Reverted to Rent-Stabilized Status

Landlord sued to evict month-to-month tenant, claiming that the apartment was deregulated. Tenant claimed that he was rent stabilized, that his apartment had been improperly deregulated, and that he had been overcharged. The court ruled for tenant, dismissed landlord’s case, and granted tenant’s request for pretrial questioning on his overcharge claim. Landlord argued that it was entitled to negotiate a first, deregulated rent when tenant moved into the apartment in 2005, consistent with Rent Stabilization Code Section 2526.1(a)(3)(iii) as it existed at that time and as the DHCR interpreted the law.

The apartment was registered as rent stabilized with a monthly rent of $792 in 1998. Landlord registered the apartment as temporarily exempt/employee-occupied between 1999 and 2005. When tenant moved in, landlord set a first deregulated rent of $2,050 per month and registered the apartment as permanently exempt. But the court agreed with tenants that landlord’s interpretation of the law was wrong. After the temporary exemption, the apartment reverted to rent-stabilized status and landlord was required to offer tenant a rent-stabilized lease. And landlord didn’t perform any apartment renovations that would justify the 250 percent increase between the rents collected in 1998 and 2005. 

M&E Christopher LLC v. Godfrey: Index No. L&T80419/2012, NYLJ No. 1202730082181 (Civ. Ct. NY; 6/15/15; Wendt, J)