Court Vacates Prior Settlement Stating That Lofts Not Rent Stabilized

Landlord sued to evict loft tenants. Landlord claimed that tenants weren't subject to rent stabilization. Landlord relied on a 1996 settlement agreement approved by a court in a prior case. In that case, landlord and tenants agreed that tenants weren't rent stabilized. Tenants now asked the court to vacate the prior court order and settlement agreement. The court ruled for tenants. Landlord appealed and lost. Six lofts in landlord's building had been converted illegally to residential use. Under the prior settlement agreement, landlord gave tenants 10-year leases at their current rents with increases equal to those permitted under rent-stabilized rent guidelines. Tenants agreed to move out at the end of their leases. Landlord and tenants also agreed in the prior case that the building was substantially rehabilitated for residential use after Jan. 1, 1974, and that tenants didn't complete the substantial rehabilitation. This statement was false and known by all parties at the time to be false. Because the prior court order was obtained by a misrepresentation to the court, it was vacated. The lofts may possibly be legalized and may be subject to rent stabilization.

142 Fulton LLC v. Hegarty: NYLJ, 6/25/07, p. 34, col. 3 (App. Div. 1 Dept.; Sullivan, JP, Nardelli, Williams, Gonzalez, Catterson, JJ)