Landlord Must Offer Renewal Lease with Preferential Rent

Facts: In 1992, landlord gave tenant a rent-stabilized lease with a preferential rent rider. The rider gave tenant a preferential rent at less than the stabilized rent and stated that tenant's rent would be renewed at increases based on the preferential rent, not the higher rent-stabilized rent. In 2003, the DHCR amended the Rent Stabilization Code to provide that landlords didn't have to give renewal leases based on preferential rents. Landlord then offered tenant a renewal lease based on the higher rent-stabilized rent, not the preferential rent. Tenant refused to sign the lease or pay the higher rent. Landlord then deemed tenant's lease to be renewed at the higher rent and sued to evict tenant for nonpayment of rent. Court: Landlord loses. Landlord couldn't rely on the amended Rent Stabilization Code provision because it violated the terms of tenant's lease agreement. The preferential rent rider specifically applied to tenant's renewal leases. Also, permitting landlord to abandon the preferential rent during the tenancy would defeat the purpose of the ETPA and the Rent Stabilization Code.

448 W. 54th St. Corp. v. Doig-Marx: NYLJ, 7/14/04, p. 18, col. 3 (Civ. Ct. NY; Fiorella, J)