Thursday, October 31, 2013

REBNY Legal Line Question of the Week: Rent Stabilized Leases


Legal Line Question of the Week
Rent Stabilized Leases
QuestionWhen can a Landlord (hereinafter the “Landlord or “Owner”) refuse to 
renew the lease of a rent stabilized tenant (the “Tenant”) who lives in a 
rent stabilized apartment (the “Apartment”)?  Furthermore, under what 
circumstances can an Apartment be “deregulated”?
AnswerGenerally, an Owner may refuse to renew a rent stabilized Tenant’s l
ease in the following circumstances, and only upon providing the Tenant 
with the required prior written notice: (i) where the Owner wants to take 
over the Apartment for his/her (or a member of the Owner’s “immediate 
family”) personal use and occupancy as a primary residence; (ii) where 
the Apartment is not occupied by the Tenant as their primary residence; 
or (iii)  where the Owner takes the Apartment off the rental market or 
demolishes the building. Notwithstanding the foregoing, an Owner cannot 
evict a Tenant from an Apartment if the Tenant, or the Tenant’s spouse, 
is 62 years or older (or if the Tenant is disabled).
An Apartment may be deregulated, and removed from the benefits of the 
rent stabilization laws, when the legally regulated rent is $2,500.00 
(or more) per month & the Apartment is occupied by Tenants whose 
total annual household income exceeds $200,000 (or $175,000 or 
$250,000 based upon the applicable circumstances) in each of the 
two preceding years. An Apartment may also be deregulated if the 
Apartment is vacated and could be offered at a legal rent of 
$2,500.00 or more.  Furthermore, after a rent stabilized building is 
converted to a co-op or condominium, rent stabilized Tenants 
residing in the building at the time of the conversion are generally 
allowed to remain in possession of the Apartment pursuant to a 
non-eviction conversion plan.  However, once the rent stabilized 
Tenant vacates the Apartment, then the Apartment will be removed 
from the protection of the rent stabilization laws. Sometimes, 
albeit rarely, an apartment building is converted to a co-op or 
condominium pursuant to an eviction plan. Under an eviction 
plan, the Owner may evict (in accordance with applicable 
rules and procedures) the Tenant and/or refuse to renew a lease if the 
Attorney General has accepted the plan as an eviction plan and 
three years have elapsed from the date on which the Attorney 
General accepted the eviction plan. If a building is newly constructed 
or substantially rehabilitated and takes advantage of a 
421-a or J-51 Tax abatement/program, then the building 
may only be regulated for the period of the tax abatement.
Important Tip: Issues concerning the Rent Stabilization 
Laws are very complicated.  Therefore, when faced with a question 
from a Landlord and/or Tenant, you should advise the Tenant and/or 
Landlord to consult with their respective attorney.

Neil B. Garfinkel, REBNY Broker Counsel
Partner-in-charge of real estate and banking practices at 
Abrams Garfinkel Margolis Bergson, LLP

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