Landlord Improperly Deregulated Rent-Stabilized Apartment

Tenant sued landlord for rent overcharge and fraudulent deregulation of his apartment. Tenant moved into the unit in 2014 under a one-year lease that included a deregulation notice. Tenant claimed that the deregulation notice didn't comply with the requirements of Rent Stabilization Code (RSC) Section 2522.5(c)(1) and that landlord didn't inform him of his right to see documentary proof substantiating a claimed rent increase for individual apartment improvements (IAIs). Landlord asked the court to dismiss the case without trial, and argued that that it provided a deregulated lease to tenant based on a good faith belief that its IAI increase was accurate and that the apartment was subject to deregulation.

The court ruled against landlord, and for tenant. The court found that the apartment was rent stabilized, that it was improperly deregulated in 2016, and that landlord's attempt to retroactively register the apartment in 2020 was invalid. Tenant made a "colorable claim of fraud" by pointing to landlord's 2020 action in retroactively registering the apartment based on claimed 2014 expenses as "dubious at best."

Greenwood v. Ajal LP: Index No. 157838/2020, 2021 NY Slip Op 32930(U), NYLJ No. 1645512336 (Sup. Ct. NY; 8/20/21; Cohen, J)