Landlord Improperly Deregulated and Overcharged Tenant of Hotel-Stabilized Apartment

Tenant sued landlord, claiming rent overcharge and that his hotel-stabilized apartment had been improperly deregulated. Tenant moved into the apartment in 2012 and paid $3,600 per month under an unregulated lease. The court ruled for tenant. In other cases, courts had ruled that the building was hotel stabilized. Rent registration records showed that the apartment was last registered as rent stabilized in 2010 with a monthly rent of $1,028. The unit was then registered in 2011 and 2012 as vacant, and as permanently exempt due to high-rent vacancy deregulation in 2013. But landlord improperly collected a vacancy rent increase from tenant. Hotel rent guidelines in effect when tenant moved in permitted a 3 percent rent increase only if at least 85 percent of the building's tenants were hotel stabilized. Only 57 percent of the units were hotel stabilized, so no rent increase was permitted when tenant moved in. Landlord pointed out that it spent over $63,000 on individual apartment improvements (IAIs) before tenant moved in, but the applicable 1/60 increase didn't bring the apartment's rent over the deregulation threshold. The court sent the case to a Special Referee to determine the amount of rent overcharge with triple damages and attorneys' fees for tenant.

Riccio v. Windermere Owners LLC: 58 Misc.3d 1223(A), 2018 NY Slip Op 50230(U) (Sup. Ct. NY; 2/21/18; St. George, J)