Prior Settlement Agreement, Falsely Stating Building Substantially Rehabilitated, Not Binding

Landlord sued tenants and asked the court to find that tenants were not subject to rent stabilization. In prior litigation, landlord and tenants had signed a settlement agreement. Tenants got some benefits, and both sides agreed that the building had been substantially rehabilitated after Jan. 1, 1974. Tenants now admitted that the portion of the settlement agreement stating that the building was exempt from rent stabilization was based on false statement concerning substantial rehabilitation. The court ruled against landlord. Because the prior settlement agreement contained a false statement concerning the building's status, landlord couldn't rely on it for deregulation. The building contained six or more units and was built before 1969. The building, therefore, was rent stabilized.

142 Fulton LLC v. Hyatt: NYLJ, 2/7/07, p. 18, col. 1 (Sup. Ct. NY; Lehner, J)