West Side Marquis LLC v. Carlos Maldonado
Attorneys and Parties
Brief Summary
Landlord-tenant and rent stabilization—whether a landlord may discontinue a preferential rent upon renewal where the tenant's renewal was delayed and the Housing Stability and Tenant Protection Act (HSTPA) had taken effect.
The Appellate Term held the HSTPA did not apply because the tenant's entitlement to a renewal arose before the HSTPA's enactment, reinstating the landlord's holdover petition.
The Appellate Term’s order that reinstated the petition and remanded for further proceedings.
Because the tenant's prior lease rights continued until a renewal was actually offered in November 2019, after the HSTPA’s June 14, 2019 effective date, the HSTPA applied and capped the renewal rent at no more than the rent previously charged under the grandmother’s lease (RSL § 26-511[c][14] [for tenants entitled to a renewal or vacancy lease as of June 14, 2019, renewal rent may be no more than the rent previously charged, subject only to guideline and other lawful increases]). Returning to the higher legal regulated rent was not an 'increase authorized by law' because the DHCR order is an administrative determination, not a statute. Application of the HSTPA was not impermissibly retroactive since the renewal offer post-dated the statute’s enactment, and the DHCR order had no preclusive effect against the tenant.
Background
The building exited the Mitchell-Lama program in April 2005. The predecessor landlord applied to the New York State Division of Housing and Community Renewal (DHCR) under Rent Stabilization Law (RSL) § 26-513(a) [permits DHCR to adjust the initial legal regulated rent] to set initial rents. A December 1, 2006 settlement (WSM Agreement), ratified by a December 29, 2006 DHCR order, set legal regulated rents and provided a preferential 'actual collectible rent' (ACR) for signatories and qualifying successors. Respondent Carlos Maldonado had lived with his grandmother (the tenant of record) since 1988 but did not qualify as a WSM ACR successor because he was not 28 years old on December 1, 2006. The grandmother’s last renewal (Nov. 1, 2015–Oct. 31, 2016) listed a legal regulated rent of $2,429.53 and an ACR of $791. She died in June 2016. In July 2018, the Civil Court held Maldonado was a lawful successor entitled to a renewal lease. The landlord did not offer a renewal until November 7, 2019—after the Housing Stability and Tenant Protection Act (HSTPA) took effect on June 14, 2019. The renewal demanded the legal regulated rent ($2,481.62) and omitted any ACR. Maldonado rejected the renewal; the landlord terminated the tenancy and commenced this 2020 holdover.
Lower Court Decision
The Civil Court denied the landlord’s summary judgment motion and dismissed the petition, holding the tenant was entitled to a renewal on the same terms and conditions as the grandmother’s prior lease due to the HSTPA. The Appellate Term reversed, holding the HSTPA did not apply because the tenant’s entitlement to a renewal predated the HSTPA, and it reinstated the petition.
Appellate Division Reversal
The Appellate Division unanimously reversed the Appellate Term, granted the tenant’s cross‑motion for summary judgment dismissing the petition, and directed entry of judgment. The court held that, under Rent Stabilization Code (RSC) § 2523.5(d) [failure to offer a renewal does not deprive the tenant of rights; tenant retains the same rights as if the expiring lease were still in effect], the grandmother’s lease terms—including the ACR—continued until the landlord actually offered a renewal in November 2019. Because the renewal offer post‑dated the HSTPA, RSL § 26-511(c)(14) [for tenants entitled to a renewal or vacancy lease as of June 14, 2019, renewal rent may be no more than the rent previously charged, subject only to guideline and other lawful increases] applied to cap the renewal rent at no more than the previously charged rent. The shift from ACR to the higher legal regulated rent was not an 'increase authorized by law' since the DHCR order is an administrative determination rather than statutory law. Application of the HSTPA here was not impermissibly retroactive, and the DHCR order had no preclusive effect against the tenant.
Legal Significance
Clarifies that when a landlord delays offering a renewal, the expiring lease’s protections—including preferential rent—continue under RSC § 2523.5(d), and if the renewal is offered after June 14, 2019, the HSTPA’s cap in RSL § 26-511(c)(14) applies. It also limits 'other increases authorized by law' to statutory, not administrative, sources and rejects preclusion based on a DHCR rent-setting order in this context.
If a renewal lease is offered after June 14, 2019, a landlord cannot discontinue a preferential rent upon renewal merely by reverting to the legal regulated rent; the HSTPA caps the renewal rent at no more than what was previously charged, and rights under the prior lease persist until a proper renewal is offered.