Deregulation Rider Invalid

Facts: Landlord filed an application for high-income rent deregulation in 1996. Rent-stabilized tenants' rent was over $2,000 per month, and landlord claimed their total annual household income was over $250,000 during 1994 and 1995. The DRA ruled for landlord, and tenants appealed. While tenants' PAR was pending, their renewal lease expired on May 31, 1997. Landlord was required under the Rent Stabilization Code to offer tenants a one- or two-year renewal lease on the same conditions as the expiring lease. Landlord added a lease rider to the renewal offer form, which stated that if the DHCR ruled against tenants, tenants renewal lease would be revoked, null and void 60 days after issuance of the DHCR's PAR determination. Landlord stated that the lease rider was permitted under DHCR Operational Bulletin 95-3. Tenant signed the renewal lease form, but not the rider. Landlord in turn didn't sign the renewal lease and didn't return a fully signed copy to tenant. In September 1997 the DHCR ruled against tenant, and landlord sent tenant a 60-day cancellation/termination notice. Tenants appealed the DHCR's order within 60 days. While their appeal was pending, landlord sued to evict tenants. Court: Landlord loses. Landlord's deregulation notice was invalid. DHCR Operational Bulletin 95-3 sets forth specific language to be used for renewal lease riders calling for a 60-day cancellation upon deregulation of an apartment. Landlord didn't use the DHCR's language and didn't refer to the applicable laws, the DHCR Operational Bulletin, or the pending PAR. Landlord also never fully signed the lease renewal, so the rider wasn't effective. The DHCR didn't require tenants to sign the lease rider. But since landlord did so, tenants were given the chance to refuse to sign. When they did so, landlord should have sued to evict them for not renewing their lease. Landlord instead deemed a one-year renewal lease.

Trump CPS LLC v. Bousquette: NYLJ, p. 31, col. 1 (3/18/98) (Civ. Ct. NY; Shulman, J)