No Rent Hike for Improvements After Evicted Tenant Restored to Possession

In 2006, landlord sued to evict rent-controlled tenant for performing unauthorized apartment alterations. On March 1, 2007, the court ruled for landlord after a trial but delayed the eviction to give tenant time to cure by restoring the apartment to its original condition. On July 26, 2007, perhaps by error, tenant was evicted even though the court had signed an order on July 24 staying the execution of the eviction warrant for tenant to prove it had cured his alterations. On July 27, 2007, the court denied another motion by tenant seeking to be restored to possession of the apartment. The court noted that tenant hadn't completed the apartment restoration. Tenant appealed, and the appeals court stayed any re-renting of the apartment while tenant's appeal was pending.

In April 2009, the appeals court ruled for tenant and sent the case back to housing court for further proceedings. The appeals court found that tenant had restored the apartment in a timely manner and shouldn't have been evicted. Landlord and tenant later signed a settlement agreement by which tenant was restored to the apartment. They agreed to let the DHCR decide what tenant's legal rent should now be. Landlord claimed that it had performed substantial demolition and renovations in tenant's apartment after tenant was evicted and, based on the cost, the apartment was now deregulated. Alternatively, landlord pointed out that in another court case, an owner was permitted to collect a rent increase for apartment improvements made after a tenant was evicted but later restored to possession.

The DHCR ruled against landlord. In the other case, there was no question as to whether the eviction had been legal. In this case, the lower court had signed an order two days before the eviction that directed the delay of the eviction. The eviction that took place therefore was improper, and landlord couldn't claim there was a vacancy deregulation.

Benjamin Scott Corp.: DHCR Adm. Rev. Docket No. ZE420045RO (2/21/14) [7-pg. doc.]