Four-Year Rule Applied

Landlord sued to evict rent-stabilized tenant based on tenant’s failure to renew her lease. Tenant claimed that the renewal was unlawful and asked the court to dismiss the case. The court ruled for tenant but denied any award of attorney's fees. Tenant had moved into the apartment in 2005 under a two-year unregulated lease at $1,440 per month. The lease was renewed in 2007 and 2009. In 2010, tenant joined a proposed class action claiming that her apartment was unlawfully deregulated while the building received J-51 tax benefits. That case was dismissed, and tenant’s appeal was pending. But landlord acknowledged that the apartment was rent stabilized and offered tenant a rent-stabilized lease commencing Oct. 1, 2011, listing a stabilized rent of $2,799 for two years, $2,707 for one year, and preferential rents of $1,780 or $1,720 respectively. The offered renewal also contained a J-51 rent rider. Tenant refused to sign the renewal, claiming that the offered rent wasn’t the legal rent and the J-51 rider was improper. The court calculated the lawful rent by using the rent paid four years before tenant filed her class action claim as the base date. Landlord therefore should have offered tenant a renewal lease at $1,731 for a two-year renewal and $1,674 for a one-year renewal. The court ruled that the renewal lease was offered at an unlawful rent, but that the renewal lease itself was not unlawful for including a tax abatement rider that wasn’t included in the initial lease, and landlord didn’t act in bad faith in offering the renewal lease at an unlawful rent. The court also denied attorney’s fees since tenant could have signed the improper renewal offer and filed a rent overcharge complaint.

Sixth Lenox Terrace Associates v. Schneider: 2012 NY Slip Op 22279, 2012 WL 4451003 (Civ. Ct. NY; 9/25/12; Martino, J)