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Lease Which Purported to Deregulate Rent-Controlled Apartment Is Void As Against Public Policy

In a full-fledged opinion by Judge Mazzarelli, the First Department determined that a lease (called the “New Agreement”) which purported to deregulate a rent-controlled apartment was void as against public policy:

In Drucker v Mauro (30 AD3d 37, 39 [1st Dept 2006], appeal dismissed 7 NY3d 844 [2006]) this Court stated:

“It is well settled that the parties to a lease governing a rent-stabilized apartment cannot, by agreement, incorporate terms that compromise the integrity and enforcement of the Rent Stabilization Law. Any lease provision that subverts a protection afforded by the rent stabilization scheme is not merely voidable, but void (Rent Stabilization Code [9 NYCRR] § 2520.13), and this Court has uniformly thwarted attempts, whether by mutual consent or by contract of adhesion, to circumvent regulated rent maximums.”

Even an agreement that modifies the rent laws in a manner favorable to the tenant is of no effect (id. at 41). The New Agreement does not merely modify the rent regulations; it declares them inapplicable to the apartment. Without question, then, the New Agreement is void. We note that, although Drucker addressed only agreements to deregulate rent-stabilized apartments, there is no logical reason why the same principle should not apply to the rent-controlled apartment at issue here.  Extell Belnord LLC v Uppman, 2013 NY Slip Op 07697, 1st Dept 11-19-13

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