Court Can Determine Fair Market Rent for Stabilized Apartment

Landlord sued to evict unregulated tenant for nonpayment of rent, claiming that tenant owed $171,885. Tenant's monthly rent was $7,391. Tenant claimed rent overcharge. The prior tenant was rent controlled, and tenant had a fair market rent appeal (FMRA) pending before the DHCR. Tenant asked the court to delay the nonpayment case until his FMRA was decided. The court refused to do so since the DHCR refused to expedite processing and the court also had the authority to determine the fair market rent. Landlord claimed that the apartment was exempt from rent stabilization due to high-rent vacancy deregulation. Tenant claimed that prior landlord was receiving J-51 tax benefits at the time he moved in and therefore couldn't legally deregulate the apartment. Landlord agreed, but tenant disputed the rent adjustment that landlord gave him. The court ruled that a trial was needed to determine the legal rent. The four-year rule didn't apply under these circumstances, and landlord should be given the chance to produce full rent history records. A default formula would apply to calculate the legal regulated rent if landlord's records were insufficient.

SAV V/Atlas 845 WEA Associates NF LLC v. Spiritos: Index No. L&T 51740/12, NYLJ No. 1202590378185 (Civ. Ct. NY; 1/24/13, Stanley, J)