Change in Tenant's Corporate Entity Resulted in Vacancy Deregulation

(Decision submitted by Paul N. Gruber, of the Manhattan law firm of Borah, Goldstein, Altschuler, Nahins & Goidel, P.C., attorneys for the landlord.)

Landlord sued to evict tenant, claiming that the formerly rent-stabilized apartment became vacant after the building's Real Property Tax Law (RPTL) 421-a tax benefits expired due to high-rent vacancy deregulation and that a new corporate tenant was vacancy deregulated due to high rent. The court and lower appeals court dismissed the case. They agreed with tenant that the apartment didn't become vacant. Instead, the prior named tenant, who had lived in the unit for 30 years, substituted a new corporate entity for his prior corporate entity as the tenant name on a recent renewal lease.

Landlord appealed further and won. The Appellate Division found that tenant and corporate entity created a vacancy by substituting a new corporate entity on a renewal lease and omitting tenant as an individual named co-tenant. And there was no proof that landlord or prior landlord voluntarily waived a known right to deregulate the apartment based on vacancy. 

Gavrielov v. Unger Consulting Group Ltd: Index No. 9547 (570582/17), 2019 NY Slip Op 04467; 6/6/19; Sweeny, JP, Gische, Webber, Oing, Moulton, JJ)