Tenant Claims New Landlord Must Continue Preferential Rent

Facts: Prior landlord charged rent-stabilized tenant a preferential rent when tenant relocated to an apartment in 1997. The legal rent was $810; the preferential rent was $760. The lease for the apartment stated that the preferential rent would continue upon lease renewal. But in 1999, prior landlord charged tenant the full legal rent. And in 2000, new landlord continued to charge the full legal rent. In 2003, tenant sued landlord for rent overcharge. Tenant claimed that the overcharge was willful. Landlord argued that under the 2003 amendment to the Rent Stabilization Code, landlord wasn't required to continue the preferential rent upon lease renewal. The court ruled against landlord, and landlord appealed. Court: Landlord loses. Tenant and prior landlord agreed in the lease to renew at a preferential rent. Rent Stabilization Code Section 26-511(c)(14) doesn't invalidate a written agreement to extend the preferential rent upon renewal. And the fact that the renewal leases didn't include the preferential rent can't be deemed a waiver of tenant's right to the preferential rent.

Aijaz v. Hillside Place, LLC: NYLJ, 5/5/05, p. 31, col. 4 (App. T. 2 Dept.; Pesce, PJ, Golia, Rios, JJ)