In a historic decision that could have affected an estimated 150,000 apartments throughout the City, the Court of Appeals has held landlords did not have to re-regulate apartments in rent-stabilized buildings that were properly deregulated once the rent-stabilized renter moves out.
The initial case was brought two years ago in Altman v. 285 West Fourth LLC. The case involves a lease that was $1829.49 at the time of the vacating of the rent-stabilized tenant. The subtenant (Robert Altman) then signed a new lease with the landlord (S.W. Management Acquisitions) that exceeded the prior rent and included a 20 percent vacancy increase ($2,484 per month) which is allowed under the Rent Regulation Reform Act of 1997. The legal rent thereafter exceeded the threshold of $2,000 a month rent in order for the rental to be deregulated. The 2015 case indicated that the 20 percent vacancy increase could not be included in meeting the threshold which Altman was awarded $165,363 in overcharged rent. The court stated that the rent had to exceed the threshold when the tenant was living there. The Court of Appeals overturned this decision and now indicates that apartment rents can be increased and deregulated based on legal rents (including the 20% vacancy increase) on when the tenants move out. The legal threshold for deregulation currently is $2,733.
According to The Commerical Observer the affirmation of the lower court's decision "would have given as many as 150,000 renters a precedent to sue their landlords for illegally deregulating their apartments and potentially allow them to win hundreds of thousands in rent overcharge judgements."
Real Estate Board of New York (REBNY), which filed an affirmation in support of the landlords is in support of the decision. REBNY president John Banks stated “The New York State Court of Appeals, the state’s highest court, has reaffirmed the long-standing legal practice and widely held understanding of the application of the Rent Stabilization Law’s vacancy decontrol provisions. This means that the owners of thousands of rent-stabilized apartments which have been deregulated over the last two decades can rest assured that the rules were followed and these units can remain deregulated.”
Blue Harbour Property Management is a full service NYC property management company servicing the boroughs of Queens, Brooklyn, Manhattan and the Bronx. Whether it be a 1 bedroom condo or multi-family building we are able to assist our clients maximize their investments.
http://www.blueharbourpropertymanagement.com/nyc-landlords-win-major-case-in-states-highest-court-over-rent-regulation/
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