ROXBOROUGH APARTMENTS CORP v. BECKER (2006)

Final judgment (Cyril K. Bedford, J.), entered March 11, 2004, affirmed, without costs.   Execution of the warrant shall be stayed on condition that tenant, within 30 days after service of a copy of this order with notice of entry, refunds to each roommate any rent paid by the roommate to tenant after January 1, 2001 in excess of 25% of the legal regulated rent.

Judgment (Cyril K. Bedford, J.), entered May 12, 2004, reversed, without costs, and the award of attorney's fees is vacated.

 The record, including the parties' stipulation of facts, established that the rent stabilized tenant collected rent from three roommates in the aggregate sum of $2,100 per month, in excess of the legal regulated rent of $1,954 per month.   The tenant thus charged his roommates a disproportionate share of the legal rent in violation of Rent Stabilization Code (9 NYCRR) § 2525.7, conduct warranting issuance of a possessory judgment in landlord's favor (see RAM I LLC v. Mazzola, 2001 N.Y. Slip Op. 50073[U], 2001 WL 1682829, lv. denied 2002 N.Y.App.Div. LEXIS 6531).   However, the overcharges did not rise to a level of profiteering requiring eviction of the long-term tenant without giving him an opportunity to cure (see 54 Greene St. Realty Corp. v. Shook, 8 A.D.3d 168, 779 N.Y.S.2d 77 [2004], lv. denied 4 N.Y.3d 704, 792 N.Y.S.2d 1, 825 N.E.2d 133 [2005];  see also Ariel Assoc., L.L.C. v. Brown, 271 A.D.2d 369, 706 N.Y.S.2d 116 [2000] ).   Significantly, the surcharge amounts, though not insubstantial, do not reflect commercial exploitation of the regulated tenancy (see 270 Riverside Dr., Inc. v. Braun, 4 Misc.3d 77, 79, 781 N.Y.S.2d 551 [2004] [no “incurable violation” shown by tenant's collection of rent from two roommates in the aggregate sum of $1,270, where the legal regulated rent was $1,192;]  compare W. 148 LLC v. Yonke, 11 Misc.3d 40, 812 N.Y.S.2d 735, [eviction required where tenant charged a series of roommates nearly double the monthly stabilized rent and advertised the apartment under an internet listing for “Affordable Hotels”] ).   Nor, so far as shown by the parties' stipulation of facts, were the financial arrangements between tenant and his roommates actuated by “ bad faith or an intent to profiteer” (54 Greene St. Realty Corp. v. Shook, 8 A.D.3d at 168, 779 N.Y.S.2d 77, supra ).   Tenant's belief that he was entitled to compensation in the form of rent for the services and amenities he provided to his roommates, though erroneous (see Bryant v. Carey, 196 Misc.2d 412, 765 N.Y.S.2d 146 [2003] ), was not palpably unreasonable (Shook, 8 A.D.3d at 168, 779 N.Y.S.2d 77).

 Although the landlord may have achieved prevailing party status by obtaining a possessory judgment (see generally 490 Owners Corp. v. Israel, 189 Misc.2d 34, 35, 729 N.Y.S.2d 819 [2001] ), the imposition of attorney's fees would be unfair under the particular circumstances of this case, where tenant's roommate overcharges would not have triggered a possessory remedy at their inception (see 520 E. 81st St. Assoc. v. Roughton-Hester, 157 A.D.2d 199, 555 N.Y.S.2d 70 [1990] ) and where the tenant's litigation position, albeit unsuccessful, was of colorable merit in an unsettled area of the law (see Wells v. East 10th St. Assoc., 205 A.D.2d 431, 613 N.Y.S.2d 634 [1994];  Rose v. Montt Assets, Inc., 187 Misc.2d 497, 723 N.Y.S.2d 592 [2000];  cf. Huron Assoc., LLC v. 210 E. 86th St. Corp., 18 A.D.3d 231, 794 N.Y.S.2d 360 [2005] ).

This constitutes the decision and order of the court.

PER CURIAM.

I concur.