CAMBRIDGE DEVELOPMENT LLC v. STAYSNA (2009)

Order of the Appellate Term of the Supreme Court of the State of New York, First Department, entered December 23, 2008, which modified an order of Civil Court, New York County (Marc Finkelstein, J.), entered on or about November 3, 2006, inter alia, granting petitioner landlord's cross motion for summary judgment awarding it a final judgment of possession, by permanently staying execution of the warrant of eviction, unanimously affirmed, without costs.

Appellate Term properly modified the order of the Civil Court by permanently staying execution of the warrant of eviction because although a tenant who profiteers on a rent-stabilized apartment by substantially overcharging a subtenant may forfeit his or her rights under rent stabilization (see e.g. Matter of 151-155 Atl. Ave. v. Pendry, 308 A.D.2d 543 [2003]; Continental Towers Ltd. Partnership v. Freuman, 128 Misc.2d 680, 681-82 [1985] ), the circumstances presented do not warrant termination of tenant's 16-year rent-stabilized tenancy. Although tenant sublet his rent-stabilized apartment to a subtenant for a substantial percentage above the legal rent, the tenancy was to be of short duration and upon learning of the illegality of the rent being charged, tenant promptly cured any violation of Rent Stabilization Code (9 NYCRR) § 2525.6(b) by immediately agreeing with the subtenant to offset his future rent and utility payments at the legal rate against the full amount of his initial overpayment. This arrangement was reached before the first month of the sublease had ended, and thus the duration of the illegal overcharging by tenant was brief, the offset resulted in a full refund of the overpayment, and landlord was aware of tenant's cure before the commencement of the holdover proceeding (see e.g. Ariel Assoc. v. Brown, 271 A.D.2d 369 [2000], lv. dismissed 95 N.Y.2d 844 [2000]; Central Park W. Realty v. Stocker, 1 Misc.3d 137[A], 2004 N.Y. Slip Op 50058[U] [2004]; Husda Realty Corp. v. Padien, 136 Misc.2d 92, 518 N.Y.S.2d 99 [Civ. Ct, N.Y. County 1987] ).