Glambosky and Honig defeat tenant’s Fair Market Rent Appeal on behalf of developer Naftali Group

October 19, 2016 | Real Estate, Zoning & Land Use | Commercial Litigation | Construction

In a hotly contested landlord-tenant proceeding that has been pending for over three years, Erez Glambosky and Jeremy Honig won a significant victory on behalf of developer/landlord Naftali Group.  In an unprecedented eleven page decision, the Deputy Commissioner of the New York State Division of Housing and Community Renewal affirmed the Rent Administrator’s underlying order and denied the tenant’s Fair Market Rent Appeal.  The underlying order determined that the subject apartment was not rent stabilized because the landlord successfully demonstrated, by utilizing the marketability formula, that the initial fair market rent exceeded the deregulation threshold.  In affirming the Rent Administrator’s underlying order, the Deputy Commissioner, on an issue of first impression, ruled that the well-recognized exceptions to the four year statute of limitations, such as those based upon allegations of fraud, permitting an examination of the rental history of an apartment prior to the four year base date of a proceeding, do not apply to comparable apartments in Fair Market Rent Appeal proceedings.  Furthermore, and most notably, the Deputy Commissioner specifically ruled that Appellate Division’s recent decision in Altman v. 285 West Fourth LLC, 127 AD3d 654 (1st Dept. 2015) was irrelevant to the issues raised in this proceeding as the Altman holding does not apply to the analysis of a comparable apartment in the context of a Fair Mark Rent Appeal.  This is an important decision for landlords throughout New York City as it limits the impact of Altman, which has severely altered vacancy deregulation of rent-regulated apartments.

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