Laspina v 340 E. 198th Street LLC
Attorneys and Parties
Brief Summary
Residential landlord-tenant and rent stabilization dispute over whether an apartment was lawfully deregulated before the Housing Stability and Tenant Protection Act (HSTPA) (L 2019, ch 36, part D, §§ 5, 8, as amended by L 2019, ch 39, part Q, § 10) [repealed the Rent Stabilization Law's luxury deregulation provisions] took effect.
The lower court denied plaintiffs' motion for summary judgment seeking a declaration that the apartment was rent stabilized, a determination of the lawful legal regulated rent, and damages for alleged overcharges.
The Appellate Division reversed the denial of summary judgment on the rent-stabilization issue and granted plaintiffs summary judgment declaring that the apartment is subject to rent stabilization.
The court held that the operative date of the vacancy lease was the date the tenancy commenced, June 14, 2019, not the date the lease was signed in May 2019. Because the lease commenced on the same day the HSTPA became effective, the repeal of high-rent deregulation under Administrative Code of City of NY § 26-504.3 [high-rent vacancy deregulation provision] applied. The court also relied on Division of Housing and Community Renewal operational bulletins stating that Individual Apartment Improvement increases became effective and collectible only when the vacancy lease commenced.
Background
Defendant bought the Bronx building on or about October 30, 2018, when apartment 3B was vacant but rent stabilized. Defendant claimed it performed about $65,400 in Individual Apartment Improvements (IAIs). On May 31, 2019, defendant signed a lease with nonparty Lydia Brown at a market rent of $2,500, but that lease did not begin until June 14, 2019, the same date the HSTPA took effect. Plaintiffs moved into the apartment on September 1, 2020 under a market-rate lease at $2,500 and later renewals remained at market rate. In February 2024, plaintiffs sued for a declaration that the apartment remained rent stabilized, a determination of the legal regulated rent, and recovery of overcharges, treble damages, and attorneys' fees.
Lower Court Decision
Supreme Court, Bronx County denied plaintiffs' motion for summary judgment to the extent they sought a declaration that the apartment was subject to rent stabilization, a determination of the lawful rent, and a money judgment for overcharges and treble damages.
Appellate Division Reversal
The Appellate Division unanimously reversed, granted summary judgment declaring the apartment is subject to rent stabilization, and remanded for further proceedings to determine the legal regulated rent and any overcharges and damages. The court found that applying the HSTPA was not impermissibly retroactive because the vacancy lease commenced on the statute's effective date.
Legal Significance
This decision emphasizes that for rent-regulation purposes the effective date of a lease is the commencement date of the tenancy, not the execution date. It also confirms that when a vacancy lease commenced on or after June 14, 2019, the HSTPA's repeal of luxury deregulation controlled, and claimed IAI increases had to be assessed under post-HSTPA rules because they became effective only upon lease commencement.
A landlord cannot avoid rent stabilization by signing a vacancy lease before June 14, 2019 if the lease did not start until that date or later; the commencement date controls, and apartments not lawfully deregulated before the HSTPA took effect remain rent stabilized.