Building Rehabilitated After Prior Landlord Intentionally Destroyed It

Facts: Landlord sued to evict tenant for nonpayment of rent. Landlord claimed that the building was exempt from rent stabilization because it had been substantially rehabilitated before tenant moved in. Tenant claimed that he was rent-stabilized and that he was overcharged. Tenant claimed also that the building wasn't substantially rehabilitated and that, even if it was, the work was done primarily to repair damage done purposely to the building by prior landlord. There was no question that during the 1980s, prior landlord had harassed tenants, destroyed building systems, and installed ''goons'' in the building to force tenants to move out. Prior landlord went to jail for this, and there was an outstanding harassment lien on the building from the DHCR. Current landlord bought the building from prior landlord and was fully aware of the circumstances. Court: Landlord loses. The building remained subject to rent stabilization. The intentional criminal conduct of prior landlord bars application of the substantial rehabilitation exemption to landlord's building. And, even if landlord wasn't barred, he didn't perform enough work to qualify for the substantial rehabilitation exemption. Most of the work done by landlord was done on a few floors, only. However, tenant's duplex apartment was newly created before tenant moved in, so landlord was entitled to collect a first stabilized rent for the apartment, which wasn't subject to a fair market rent appeal.

446 Realty Co. v. Higbie: NYLJ, 11/20/00, p. 28, col. 3 (Civ. Ct. NY; Hoffman, J)