Landlord Improperly Set Initial Legal Rent for 421-a Building Tenant

Landlord sued to evict rent-stabilized tenant of a 421-a building for nonpayment of rent. After trial, the court ruled for landlord and found that tenant owed $95,000 after giving tenant a 20 percent rent abatement for a 16-month period and a 40 percent abatement for a later 11-month period. Both sides appealed.

The appeals court ruled for tenant and dismissed the case. Tenant claimed that the rent charged was improper and that landlord fraudulently registered his rent. Tenant was the first tenant of her apartment in the 421-a building. Her initial lease listed the monthly legal regulated rent as $9,175 with a preferential rent of $3,540. But, under Rent Stabilization Code Section 2521.1(g), the initial legal regulated rent for a 421-a unit is the monthly rent charged and paid. So $3,540 was tenant's initial legal regulated rent. Landlord failed to register the correct maximum legal regulated rent between 2005 and 2013 and offered no explanation for its filing of improper registrations. Also, none of the leases offered to tenant during those years accurately represented the maximum legal rent. Therefore, tenant's rent was frozen at $3,540 and couldn't be increased until September 2013 when the rent registrations were corrected. And landlord's amended registrations had no retroactive effect. Landlord's rent demand therefore was improper since it didn't set forth the approximate good faith amount of rent owed and can't be amended. 

125 Court Street, LLC v. Sher: 58 Misc.3d 150(A), 2018 NY Slip Op 50092(U) (App. T. 2 Dept.; 1/19/18; Elliot, JP, Pesce, Aliotta, JJ)