Landlord Can Collect First, Deregulated Rent for Newly Created Apartment

Tenant sued landlord, claiming that his apartment was improperly deregulated. He had moved into the apartment in May 2013, and argued that prior tenant was deregulated, but that last rent-stabilized tenant who lived in the apartment until July 2002 had paid a last monthly rent of $1,117. Landlord argued that, after July 2002, tenant’s apartment and the adjoining apartment both were vacant. Landlord then added a penthouse floor above the two apartments and constructed two new duplex apartments. Therefore, tenant’s apartment was newly created and landlord set a first rent that was above the deregulation threshold. The court ruled against tenant, finding that the apartment wasn’t subject to rent stabilization.

Tenant appealed and lost. Landlord showed that that it substantially altered the character of the apartment by connecting it to the new penthouse. The prior apartment was obliterated and reconfigured to create a new apartment. Landlord therefore substantially altered the outer dimensions of a vacant apartment and qualified for a first rent under Rent Stabilization Code Section 2520.11(r)(12).

Dixon v. 105 West 75th Street LLC: 2017 NY Slip Op 02504, 2017 WL 1168343 (App. Div. 1 Dept.; 3/30/17; Mazzarelli, Manzanet-Daniels, Webber, Gesmer, JJ [dissenting])