Building Not Substantially Rehabilitated

Tenant sued landlord, claiming a rent overcharge. Landlord claimed that the building wasn't rent stabilized, due to substantial rehabilitation. Landlord said that the substantial rehabilitation of the building was established in a prior court decision that was binding on tenant. The court ruled for landlord and dismissed the case. Tenant appealed and won. In the prior case, landlord sued to evict other tenants and claimed that the building was exempt from rent stabilization due to substantial rehabilitation. That case was settled by a court-ordered settlement agreement. There was no actual ruling that the building was substantially rehabilitated, and tenant wasn't a party to the prior case. So there was no binding court decision. And landlord didn't prove there actually had been a substantial rehabilitation.

Cecilia v. Irizarry: NYLJ, 5/24/01, p. 22, col. 4 (App. T.2 Dept.; Scholnick, PJ, Patterson, Golia, JJ)