Landlord Bound by Prior Agreement

Facts: In 1987, landlord sued to evict rent-stabilized tenant for nonprimary residence. Landlord and tenant signed a settlement agreement in court in which they agreed that tenant would use the apartment for professional purposes only and that he wasn't rent stabilized. Landlord and tenant agreed that tenant would pay $2,600 per month in rent, well above rent-stabilized levels. They also agreed that tenant's lease would be renewed continually at tenant's option at rent guidelines increases. In 1998, landlord applied to the DHCR for high-rent/high-income deregulation of tenant's apartment. The DRA ruled for landlord based on tenant's default. Landlord then sued to evict tenant when tenant refused to sign a renewal lease at a rent of $8,000 per month. Tenant claimed that he wasn't subject to high-rent/high-income deregulation by the DHCR and that landlord was bound by the prior lease agreed to in the 1987 court case. The court ruled for tenant and dismissed the eviction case. Landlord appealed. Court: Landlord loses. Landlord is bound by the prior lease agreement. There was no legal basis for the DHCR to deregulate the apartment, because it wasn't rent stabilized at the time the deregulation order was issued. The DHCR didn't know all the facts.

Katz 737 Corp. v. Bernstein: NYLJ, 5/18/01, p. 18, col. 2 (App. T.1 Dept.; Parness, PJ, Davis, Suarez, JJ)