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DEFENDANT LANDLORD DEMONSTRATED RENOVATIONS TO THE APARTMENT, WHICH WAS ONCE RENT-CONTROLLED, WERE SUFFICIENT TO WARRANT CHARGING MARKET RENT (FIRST RENT), COMPLAINT DISMISSED BASED ON LANDLORD’S DOCUMENTARY EVIDENCE.

The First Department, over an extensive dissent, determined plaintiff landlord was entitled to dismissal of tenant’s complaint (based on documentary evidence). The complaint alleged the landlord was not entitled to charge market rent (“first rent”) but rather the apartment was subject to rent control. The landlord demonstrated that renovations, including the addition of a second floor, substantially altered the apartment such that first rent could be charged:

The documentary evidence submitted by landlord was designed to refute plaintiff’s claim that the conversion of the apartment into a duplex did not meet the criteria for first rent or high rent vacancy deregulation. A landlord may charge first rent, pursuant to the Rent Stabilization Code, where the landlord “substantially alters the outer dimensions of a vacant housing accommodation, which qualifies for a first rent equal to or exceeding the applicable amount qualifying for deregulation” (9 NYCRR 2520.11[r][12]) which in this case, was $2,000 or more per month” (9 NYCRR 2520.11[r][4]). Stated somewhat differently, first rent is permitted “when the perimeter walls of the apartment have been substantially moved and changed and where the previous apartment, essentially, ceases to exist, thereby rendering its rental history meaningless” … . This Court has described the test for whether alterations qualify for first rent as “reconfiguration plus obliteration of the prior apartment’s particular identity” … . * * *

Landlord satisfied its burden of demonstrating that it made the necessary improvements to qualify for first rent, since it established that it substantially altered the character of the apartment by connecting it to the new penthouse. * * *

We similarly find that the documents submitted by landlord established that it properly claimed a rent increase based on the costs of its project to substantially increase the space in the apartment. Dixon v 105 W. 75th St. LLC, 2017 NY Slip Op 02504, 1st Dept 3-30-17

 

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