72A Realty Assocs. v. Lucas

• Decision Date: 04 December 2012
• Citation: 101 A.D.3d 401,2012 N.Y. Slip Op. 08241,955 N.Y.S.2d 19
• Parties: 72A REALTY ASSOCIATES, Petitioner–Appellant–Respondent, v. Sandra LUCAS, etc., Respondent–Respondent–Appellant, John Doe, et al., Respondents. Community Housing Improvement Program of New York Inc., Amicus Curiae.
• Court: New York Supreme Court — Appellate Division

101 A.D.3d 401

955 N.Y.S.2d 19

2012 N.Y. Slip Op. 08241

72A REALTY ASSOCIATES, Petitioner–Appellant–Respondent,

v. Sandra LUCAS, etc., Respondent–Respondent–Appellant,John Doe, et al., Respondents.Community Housing Improvement Program of New York Inc., Amicus Curiae.

Supreme Court, Appellate Division, First Department, New York.

Dec. 4, 2012.

Joel M. Zinberg, New York, for appellant-respondent.

Sokolski & Zekaria, P.C., New York (Robert E. Sokolski of counsel), for respondent-appellant.

Borah, Goldstein, Altschuler Nahins & Goidel, P.C., New York (Paul N. Gruber of counsel), for amicus curiae.

MAZZARELLI, J.P., SAXE, DeGRASSE, RICHTER, ABDUS–SALAAM, JJ.

Order of the Appellate Term of the Supreme Court, First Department, entered June 13, 2011, which, to the extent appealed from, affirmed those portions of the order of the Civil Court, New York County (Peter M. Wendt, J.), entered on or about May 25, 2010, granting respondent tenant's motion to dismiss the holdover petition and denying petitioner landlord's cross motion for summary judgment on the petition, denying tenant's rent overcharge counterclaim to the extent it sought treble damages, and directing a hearing on the issue of rent overcharges based on a base date rent amount of $2,250, and modified that portion of the order conditionally granting her counterclaim for attorneys' fees to deny that counterclaim, unanimously modified, on the law, to vacate the base date rental rate determination and reinstate tenant's counterclaims for treble damages and attorneys' fees to the extent indicated below, and remand for further inquiry on those issues, and otherwise affirmed, without costs.

In light of the Court of Appeals' decision in Roberts v. Tishman Speyer Props., L.P., 13 N.Y.3d 270, 890 N.Y.S.2d 388, 918 N.E.2d 900 [2009] and subsequent case law giving retroactive effect to Roberts( Roberts v. Tishman Speyer Properties, L.P., 89 A.D.3d 444, 445 [1st Dept.2011]; Gersten v. 56 7th Ave., LLC, 88 A.D.3d 189, 196–197, 928 N.Y.S.2d 515 [1st Dept.2011] ), tenant is entitled to rent-stabilized status for the duration of her tenancy and to collect any rent overcharges, as her apartment was improperly deregulated by landlord while it was receiving J–51 tax benefits. That the J–51 benefits subsequently expired does not support landlord's claim that the apartment must be denied ongoing regulated status. Our determination that the tenancy is rent stabilized is not, as found by the lower courts, based on the failure of the owner to have provided notice as set forth in Rent Stabilization Law § 26–504, but is premised on the apartment having been improperly deregulated as of the time that the tenant took occupancy.¹ Additionally, as we explained in Gersten, tenant's challenge to the deregulated status of her apartment, which presents a “continuous circumstance” (88 A.D.3d at 198–99, 928 N.Y.S.2d 515), is not barred by the six-year statute of limitations period set forth in CPLR 213(2).

The courts below, however, erred in setting the base date rent for the overcharge counterclaim at the $2,250 per month rate based on the market rate in the lease effective for October 2004. While that date is correct under CPLR 213–a, in light of the improper deregulation of the apartment and given that the record does not clearly establish the validity of the rent increase that brought the rent-stabilized amount above $2,000, the free market lease amount should not be adopted, and the matter must be remanded for further review of any available record of rental history...