Answer:
The case of Altman v. 285 West Fourth LLC could change the rules for deregulating rent-stabilized apartments in New York City , says Sam Himmelstein, a lawyer with the firm Himmelstein, McConnell, Gribben, Donoghue & Joseph LLP who represents residential and commercial tenants and tenant associations.
Prior to the 2015 court decision, a rent-stabilized apartment could be deregulated through a combination of vacancy increases (rent hikes that the state Division of Housing and Community Renewal allows landlords to make for new tenants) and apartment improvements (rent hikes based upon a percentage of the cost of improvements to or new equipment installed in units).
"We used to think that when the legal regulated rent hit the applicable threshold because of vacancy increases and improvements, the subsequent tenant was not rent-stabilized," Himmelstein explains. "Altman says that you have to go by whether the prior tenant's legal regulated rent was already above the threshold. If not, the next tenant is still rent-stabilized."
If a stabilized tenant's rent was $1,000 a month in 2015, for example, when the rent stabilization threshold was $2,000, the landlord would have been able to institute a 20 percent vacancy increase when the tenant moved out. The landlord would then have had to put in at least $32,000 worth of improvements to the apartment to get the rent over the threshold, and rent the unit at market-rate to the next tenant.
But under Altman, the next tenant would still be rent-stabilized, Himmelstein says, since the prior tenant's rent was under the threshold.
The Altman case is being argued in March in the Court of Appeals, the highest court in the state. The judges' decision there will be the last word on the issue, and if Altman is affirmed, thousands of deregulated apartments could return to stabilization.
"The additional wrinkle is that when the state legislature renewed rent laws in 2015, they incorporated Altman-like language into the new law," Himmelstein says. (See this Gothamist explainer for more information on the legislation.) "For someone who moved into a deregulated apartment after June of 2015, if the prior rent was below the threshold but theirs is above it, they have an argument that under this new law, they should be stabilized."
Another complicating factor has to do with the particular situation of Richard Altman, which set this case in motion.
"Mr. Altman moved into the apartment as the subtenant of a prior tenant, and then was given his own lease," says Ronald Languedoc, a partner at Himmelstein, McConnell, Gribben, Donoghue & Joseph LLP. "His attorney is arguing that there was no high rent vacancy deregulation because there was never any vacancy. The Court of Appeals could affirm the case on that basis, without even reaching the issue of what truly happens to the rent when there's a vacancy."
If Altman is affirmed, it could be great news for thousands of tenants currently paying market-rate rent, but the trick will be finding out whether the decision applies to them.
"There probably won't be any official notification unless the DHCR does an inventory, which is highly unlikely," Languedoc says. "It will come down to tenants figuring it out for themselves or going to an attorney."
Many tenants could be impacted, but "it's always a question of how many people are going to be aware," Himmelstein says. "The first step is to get your rent history from DHCR, and that should generally be taken to an attorney for review and an opinion on whether and how to proceed."
Related:
Ask Sam: I checked my apartment's rent history and I think it was illegally de-stabilized. What do I do? (sponsored)
Ask Sam: How do I find out if my apartment should be rent-stabilized--and the landlord owes me money? (sponsored)
Attention NYC renters: thanks to a new ruling, your apartment might be rent-stabilized after all (sponsored)
Ask Sam: I found out my apartment used to be rent-stabilized. Now what? (sponsored)
Ask Sam: What's a "Major Capital Improvement," and does it really mean my landlord can raise the rent? (sponsored)
Read all our Ask a Renters Rights Lawyer columns here.
Sam Himmelstein, Esq. represents NYC tenants and tenant associations in disputes over evictions, rent increases, rental conversions, rent stabilization law, lease buyouts, and many other issues. He is a partner at Himmelstein, McConnell, Gribben, Donoghue & Joseph in Manhattan. To submit a question for this column, click here. To ask about a legal consultation, email Sam or call (212) 349-3000.
