Landlord's Nonprofit Arts Group is Illusory Tenant

Facts: In 1995, landlord rented rent-stabilized apartment to a nonprofit arts group he founded. Soon after, landlord agreed to allow an artist to occupy one bedroom in the apartment on the condition that other artists referred by the arts group be allowed to use the other bedroom and share the apartment facilities. Artist/tenant also agreed that one-half of the rent she paid would be applied as a donation to the arts group. In 2006, the arts group sued to evict tenant after sending her a 30-day termination notice. Tenant asked the court to dismiss the case, claiming that she was rent stabilized.

Court: Tenant wins. Landlord used the arts group as an illusory tenant to profit and to get around the rent stabilization law. Although landlord didn't overcharge tenant, she was required to accommodate other artists on the arts group's behalf. And half of tenant's rent was paid as a charitable contribution, although tenant couldn't claim a tax deduction for it.

Art Omi, Inc. v. Vallejos: NYLJ, 4/11/07, p. 18, col. 1 (Civ. Ct. NY; Lebovits, J)