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BUILDING OWNERS EXPENDED SUFFICIENT FUNDS FOR THE IMPROVEMENT OF AN APARTMENT TO JUSTIFY AN EXEMPTION FROM RENT STABILIZATION (FIRST DEPT).

The First Department, in a full-fledged opinion by Justice Kahn, over a two-justice dissenting opinion, determined that the building owners demonstrated the expenditure of sufficient funds for improvements to an apartment to justify an exemption from rent stabilization. The opinions are too extensive to fairly summarize here. What follows is the majority’s summary of the holding:

On this appeal, we are asked to determine whether the record sufficiently demonstrates that defendants Windemere Chateau, Inc. (Chateau), the original owner of a residential building located at 666 West End Avenue in Manhattan, and Windermere Owners, LLC (Owners), the successor owner of the building, expended an amount in qualified individual apartment improvements (IAIs) to apartment 4K in that building sufficient to render that apartment exempt from rent stabilization. Should we answer that question in the negative and conclude that defendants imposed a rent overcharge on the apartment’s tenant, plaintiff Laura DiLorenzo, we are then asked to determine whether there was evidence supporting a finding of willfulness on defendants’ part in doing so, warranting an award of treble damages to plaintiff. Upon our de novo review of the record, we conclude that defendants have substantiated their claims that they have made sufficient expenditures for IAIs performed in the apartment to warrant an exemption from rent stabilization and did not impose a rent overcharge. Thus, we do not reach the issue of whether defendants willfully imposed a rent overcharge. DiLorenzo v Windermere Owners LLC, 2019 NY Slip Op 04779, First Dept 6-13-19

 

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