Rent Act of 2015 Didn't Base Vacancy Deregulation on Amount of Prior Stabilized Rent

Tenant sued landlord in January 2019, claiming that his apartment had been improperly deregulated and that he'd been overcharged. Tenant moved into the unit in November 2017 at a monthly rent of $2,400. The lease was renewed after one year at $2,520 per month. No lease provided to tenant ever indicated that it was for a rent-stabilized apartment. The last DHCR rent registration filed in 2016 listed the legal regulated rent-stabilized rent for the prior tenant at $1,643.04 per month. Landlord claimed that the rent had been legally vacancy-deregulated. Tenant later asked the court to decide the case without trial. Among other things, tenant argued that, when the prior tenant vacated the apartment, the legal regulated rent was $1,643.04, which was below the $2,700 vacancy deregulation threshold in effect at that time. Landlord asked the court to dismiss the case because the DHCR had "primary jurisdiction" over rent overcharge matters. 

The court ruled against landlord. HSTPA expressly amended the RSL to provide that a tenant may choose the forum for litigating a rent overcharge claim. The court also denied tenant's request for summary judgment without trial. There were material questions of fact that precluded this relief. Tenant argued that he was entitled to a ruling in her favor based on RSL Section 26-504.2(a), as amended by the 2015 Rent Act. Tenant believed that because the legal rent was not $2,700 at the time the prior tenant vacated, then the apartment must still be rent-regulated. But the court found tenant's interpretation to be incorrect because it contradicted the plain meaning of the statute. RSL Section 26-504.2(a) stated that the high-rent exclusion from rent stabilization applied to "Any housing accommodation with a legal regulated rent that was $2,700 dollars or more per month at any time on or after the effective date of the rent act of 2015 which becomes vacant after the effective date of the rent act of 2015."

The court found the plain meaning of the statute provides that deregulation can occur during a vacancy. Landlord claimed the unit became deregulated during a vacancy where $37,200 was spent on individual apartment improvements (IAIs). A trial was needed to determine the facts.

Perugini v. 162-164 82nd St., LLC: Index No. 150405/2019, 2022 NY Slip Op 32643(U)(Sup. Ct. NY; 8/5/22; Rosado, J)