Apartments Occupied by Nonprofit Without Sublet to Affiliated Tenants Not Exempt from Stabilization

Landlord sued to evict tenant from four rent-stabilized apartments in the same building, after refusing to renew tenant’s leases. Landlord claimed that the apartments were exempt from rent stabilization because they were rented to a corporate entity not as a primary residence. The court and appeals court dismissed the cases without prejudice because landlord’s notices stated insufficient facts to support the claims and misrepresented the rent regulatory status of the apartments. Landlord then started new eviction proceedings after sending 30-day termination notices for the apartments, which stated that the apartments weren’t rent stabilized because the apartments had been rented to tenant for occupancy by persons affiliated with tenant’s nonprofit purposes. The court again dismissed the cases based on the prior dismissals.

Landlord appealed and lost. The lower court incorrectly dismissed the cases on res judicata grounds.  But the cases were correctly dismissed for a different reason. Rent Stabilization Code Section 2520.11(f) exempts from rent stabilization apartments rented by a nonprofit institution operated exclusively for charitable or educational purposes and occupied by a tenant whose initial occupancy is contingent upon an affiliation with the institution. That provision didn’t apply in this case since the apartments were occupied by the institution, not by affiliated tenants.

2363 ACP Pineapple, LLC v. Iris House, Inc.: Index No. 570573/16, NYLJ No. 1202779859877 (App. T. 1 Dept.; 2/22/17; Lowe III, PJ, Schoenfeld, Gonzalez, JJ)