Appeals Court Dismisses Tenant's Claim of Fraudulent Apartment Deregulation

Tenant sued landlord, claiming fraudulent removal of his apartment from rent regulation in 2009 and a related rent overcharge between 2021 and 2022. Landlord asked the court to dismiss tenant's claim without trial and submitted work invoices and checks in support of claimed individual apartment improvements (IAIs) made to the apartment in 2007-2008. In opposition, tenant sought pre-trial questioning concerning whether the deregulation was fraudulent because it was based on false claims and false evidence of IAIs. Tenant stated that he didn't believe that landlord performed sufficient renovations to have deregulated the unit and that the unit didn't give the appearance of having been renovated to such a degree that it could have been deregulated. The court ruled against landlord, finding that questions of fact precluded a ruling without trial.

The appeals court reversed and dismissed tenant's complaint. Landlord showed that the deregulation of the apartment was valid and nonfraudulent, and that tenant failed to raise any factual issues as to the IAI evidence that would warrant discovery into whether the IAIs were legitimate proof of a valid deregulation. Instead, the appeals court found that landlord was entitled to a ruling without trial dismissing the complaint, a judgment of possession, and a hearing on rent arrears and related legal fees.

Cain v. 42 W. 65th LLC: Index No. 155713/22, App. No. 2743, Case No. 2023-03390, 2024 NY Slip Op 04899 (App. Div. 1 Dept.; 10/8/24; Manzanet-Daniels, JP, Singh, Mendez, Rosado, O'Neill-Levy, JJ)