Landlord Not Required to Extend Preferential Rent

(Decision submitted by Gerald Shapiro of the Manhattan law firm of Mitofsky Shapiro Neville & Hazen LLP, attorneys for the landlord.) Landlord sued to evict rent-stabilized tenant for refusing to sign a properly offered renewal lease. Tenant claimed that landlord offered an improper renewal because landlord sought the legal regulated rent rather than a preferential rent. Under tenant's initial 2005 lease, the legal regulated rent was $4,012.50 per month, but tenant paid a preferential rent of $2,700. In 2006, tenant signed a one-year renewal lease for $4,012.50, but paid a preferential rent of $2,764.45. In 2007, landlord offered tenant a renewal lease at either $4,662 for one year or $4,775 for two years. Landlord didn't offer any preferential rent. Tenant claimed that the lease required a preferential rent for his entire tenancy. Tenant also claimed fraud by landlord. The court ruled for landlord. Tenant claimed that landlord told him at the outset that he could either buy the apartment when the building converted to condominium ownership or pay a preferential rent for his entire tenancy. But the court couldn't consider the fraud claim because the lease agreement clearly stated otherwise. And the preferential rent agreement contained in tenant's initial lease clearly stated that it was a temporary rent concession agreement, "temporary in nature" and "not intended as a preferential rent which continues throughout this tenancy." Tenant relied on additional lease rider language that stated that "Upon the Tenant being provided with the option to renew this lease, this Temporary Rent Concession Amount, plus all other lawful sums may be used as a basis upon which the renewal rent may be calculated[.]" But the court found no contradiction between this provision and the rest of the preferential rent agreement. The cited language gives landlord the right to rent stabilized increases in the future notwithstanding the preferential rent agreement. The court gave tenant a chance to stay in the apartment by accepting the offered renewal lease retroactively and paying the legal rent increase.

Wellington Fee, LLC v. Cotter: L&T Index No. 59535/08 (11/18/08) (Civ. Ct. NY; Sikowitz, J)[9-pg. doc.]