Base Date Vacancy Didn't Determine Legal Rent

Tenant sued landlord by filing a summons and complaint in court on March 11, 2010. Tenant claimed that he was rent stabilized and that landlord had overcharged him. Prior tenant was rent stabilized and had a registered rent of $1,418 in 2005. Tenant moved in on March 15, 2006, at a monthly rent of $3,095. Tenant's lease stated that the apartment was a luxury deregulated unit. Tenant pointed out that the building was receiving J-51 tax benefits when he moved in and therefore he remained rent stabilized. Landlord acknowledged that, under the Court of Appeals' ruling in Roberts v. Tishman Speyer Props. LLP, tenant was subject to rent stabilization. But landlord argued that tenant's initial rent was the legal rent because the apartment was vacant on the base date four years before tenant complained. The court disagreed with landlord, who appealed and lost. The four-year rule applied, and the base date was March 11, 2006. Although the apartment was vacant on that date, Rent Stabilization Code Section 2526.1(a)(3)(iii) didn't apply. That code section states that if an apartment is vacant on the base date, the legal rent is the rent "agreed to by the owner and first rent stabilized tenant taking occupancy after such vacancy...and reserved in a lease or rental agreement." Because the code section requires that the "legal regulated rent" after a vacancy be "agreed to by the owner and the first rent stabilized tenant," and tenant wasn't offered a rent-stabilized lease, or a regulated rent, and the apartment wasn't registered with the DHCR, it didn't apply. The case was sent back to the lower court to determine tenant's legal rent.

Gordon v. 305 Riverside Corp.: 2012 NY Slip Op 02382, 2012 WL 1033483 (App. Div. 1 Dept.; 3/29/12; Mazzarelli, JP, Andrias, DeGrasse, Richter, Abdus-Salaam, JJ)