Landlord Can't Charge First Rent

Landlord sued to evict rent-stabilized tenant for nonpayment of rent. Tenant claimed landlord had collected a rent overcharge. The court ruled for tenant and landlord appealed. The appeals court again ruled for tenant on this issue. Landlord claimed it had created a new apartment and was entitled to charge a first stabilized rent. Landlord had installed new kitchen and bathroom fixtures and had removed two closets, reducing the actual apartment size. But this didn't create a new apartment. Landlord didn't significantly change or rehabilitate the existing apartment and didn't create a new housing accommodation in space previously used for nonresidential purposes. Landlord was at best entitled to a 1/40th increase for the cost of any work that qualified as apartment improvements.

Cedot Realty Corp. v. Estwanik: NYLJ, p. 28, col. 6 (3/24/95) (App. T. 1 Dept.; Parness, JP, McCooe, Glen, JJ)