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Taylor v 72A Realty Assoc., L.P.

Supreme Court of New York, Appellate Division, First Department

 May 25, 2017, Decided ; May 25, 2017, Entered

151560/14, 2673

Opinion

 [*97]  [**310] Gische, J.

There are interlocking complex issues framed by this appeal involving plaintiffs' claims that the apartment they have continuously rented for the last 16 years (apartment 5M), was improperly removed from rent stabilization. The overarching [**311]  issue is whether the apartment should be restored to rent stabilization because defendant 72A Realty Associates, L.P. (the owner) deregulated the apartment pursuant to the luxury decontrol laws while it was simultaneously receiving tax incentives under the City's J-51 program1 (see  [***2]  [****2] Administrative Code § 11-243). There can be little dispute that following Roberts v Tishman Speyer Props., L.P. (13 NY3d 270, 918 NE2d 900, 890 NYS2d 388 [2009]) and its progeny applying Roberts retroactively (Gersten v 56 7th Ave. LLC, 88 AD3d 189, 198, 928 NYS2d 515 [1st Dept 2011]) the subject apartment must be returned to rent stabilization as of 2000, when the owner first treated the apartment as exempt. The thornier issues implicated by returning the apartment to rent stabilization concern the setting of the stabilized rent, the base date for, and the statute of limitations applicable to, the setting of such rent, and the possible imposition of treble damages and attorney fees. We agree with Supreme Court that plaintiffs are entitled to a declaration that the apartment was and still is subject to rent stabilization and that they are the rent-stabilized tenants thereof. We also agree with Supreme Court that the issues of the legal rent, as well as the issues of possible overcharge, treble damages and attorneys' fees cannot be resolved on a motion for summary judgment. We disagree with Supreme Court only insofar as it held that the increases made to the rent-stabilized rent in 2000, based upon individual apartment improvements (IAIs) before the plaintiffs took occupancy, are subject to challenge on this record.

Apartment 5M is a two bedroom apartment at [***3]  187 East 4th Street in Manhattan. Plaintiff Tamara Jenkins moved into the apartment in February 2000 upon signing a two-year vacancy [*98]  lease at a monthly rent of $2,200.2 The lease consisted of an altered, standard, printed rent-stabilized lease. The words "RENT STABILIZATION" were crossed out in the heading of the lease as was the entirety of paragraph 32, pertaining to "[r]ent regulations." There was a separate rider that contained the following notice:

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151 A.D.3d 95 *; 53 N.Y.S.3d 309 **; 2017 N.Y. App. Div. LEXIS 4113 ***; 2017 NY Slip Op 04218 ****; 2017 WL 2269598

 [****1]  James Taylor et al., Respondents, v 72A Realty Associates, L.P., et al., Appellants.

Subsequent History: Modified by, Affirmed by, Certified question answered by Matter of Regina Metro. Co., LLC v. New York State Div. of Hous. & Community Renewal, 2020 N.Y. LEXIS 779 (N.Y., Apr. 2, 2020)

Prior History: Appeal from an order of the Supreme Court, New York County (Jennifer G. Schecter, J.), entered January 29, 2016. The order, to the extent appealed from, denied defendants' motion for summary judgment insofar as it sought dismissal of the complaint as against the owner and granted plaintiffs' cross motion for summary judgment declaring that apartment 5M is rent-stabilized.

Taylor v. 72A Realty Assoc., L.P., 2016 N.Y. Misc. LEXIS 5096 (N.Y. Sup. Ct., Jan. 29, 2016)

CORE TERMS

rent, apartment, rent-stabilized, rent stabilization, lease, increases, benefits, decontrol, registrations, plaintiffs', retroactive, luxury, tenant, expiration, records, registered, occupancy, exempt, rent regulation, renewal lease, installation, deregulated, overcharge, discovery, four-year, regulated, vacancy, summary judgment motion, charge a plaintiff, Stabilization

Real Property Law, Landlord & Tenant, Rent Regulation, Rent Control Statutes, Tax Law, State & Local Taxes, Real Property Taxes, Exemptions, Governments, Legislation, Statute of Limitations, Time Limitations, Tolling, Evidence, Burdens of Proof, Allocation