MALKIEWICZ v. ACQUISITION AMERICA XI LLC (2024)

Order, Supreme Court, New York County (Nancy M. Bannon, J.), entered on or about January 2, 2024, which denied defendant-landlord's motion for summary judgment on its counterclaims for a declaration that plaintiffs-tenants’ apartment is not rent-stabilized and for attorneys’ fees and dismissing plaintiff's claims for injunctive relief, rent overcharges, and attorneys’ fees, unanimously affirmed.

Plaintiffs, tenants in a residential building owned by defendant, allege that the apartment was improperly decontrolled and deregulated in 2008, after the rent-controlled tenant vacated the apartment.  Although no administrative fair market rent appeal was timely filed within the next four years, “[i]t is well settled that a tenant may challenge the ostensibly deregulated status of a dwelling at any time during their tenancy” (Thurman v. Sullivan Props. L.P., 226 A.D.3d 453, 454, 209 N.Y.S.3d 8 [1st Dept. 2024]).  Thus, plaintiffs are not time-barred from challenging the rent stabilization status of the apartment.

Defendant's motion for summary judgment on the declaratory judgment counterclaim was properly denied.  Defendant submitted the first lease post-decontrol, which provided for a monthly rent of $2,125, which was above the then-applicable high-rent vacancy deregulation threshold of $2,000, and evidence that the tenant paid that amount for one year.  The first lease was properly authenticated by defendant's managing agent, who also provided a foundation for admitting the lease as a business record (see JPMorgan Chase Bank, N.A. v. Clancy, 117 A.D.3d 472, 472, 985 N.Y.S.2d 507 [1st Dept. 2014];  CPLR 4518[a]).  While this evidence could support a finding that the apartment became deregulated (see Matter of Gavrielov v. Unger Consulting Group Ltd., 173 A.D.3d 443, 444, 104 N.Y.S.3d 54 [1st Dept. 2019];  former Rent Stabilization Code [9 NYCRR] § 2520.11[r][4]), defendant also submitted evidence that the first tenant vacated after one year and the next two leases for the apartment provided for monthly rent of about $1,700, below the threshold rent required for high-rent vacancy destabilization.  It is also notable that the first tenant's rent was never registered with the New York Division of Housing and Community Renewal.  Finally, plaintiffs stress that the rent-controlled tenant who vacated in 2008 was paid $20,000 to surrender the apartment, which indicates an intent on the part of defendant to deregulate it.  Under the circumstances, defendant did not eliminate all triable issues of fact as to whether its purported high-rent destabilization of the apartment was legal and legitimate (see Thurman, 226 A.D.3d at 453, 209 N.Y.S.3d 8).

We have considered defendant's remaining arguments and find them unavailing.