Review of Facts Needed to Determine If Apartment Was Properly Deregulated

Decision submitted by Noah Levenson, Esq. of the Manhattan law firm of Butnick & Levenson LLP, attorneys for the landlord.

An unregulated tenant sued landlord in early 2019, claiming that his apartment had been improperly and fraudulently deregulated, and that he had been overcharged. Tenant had moved into the apartment in November 2017 at a monthly rent of $2,400. The last rent-stabilized rent registered with the DHCR was prior tenant's April 1, 2016, rent of $1,643.04. No rent registration was filed for 2017 or 2018. Landlord claimed that the unit had been properly deregulated. Tenant argued that, while his initial rent was $2,400, the vacancy deregulation threshold at that time was $2,700. Tenant asked the court to rule in his favor without a trial.

The court ruled against tenant, finding that tenant misinterpreted RSL Section 26-504.2(a). This provision created an exclusion from rent stabilization for high-rent apartments and stated that the exclusion shall apply to "[a]ny housing accommodation with a legal regulated rent that was $2,700 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 that the plain meaning of the statute was that deregulation can occur during a vacancy. Landlord and tenant had not yet conducted pretrial discovery, and landlord claimed that it had installed individual apartment improvements (IAIs) costing $37,200 during the vacancy of the unit, bringing the legal rent that could be charged over the deregulation threshold.

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