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Adam Leitman Bailey, P.C. Protects Tenants in 420-Unit Complex Under Rent Stabilization Code

May 9, 2018

By Scott Mollen

Landlord-Tenant—Rent Stabilization—Mitchell Lama Buy Out—Nine Plus Year “Dormant Litigation Resuscitated”

Plaintiff tenants had moved, inter alia, for an order “vacating” the defendants’ “demand to resume prosecution of the action and serve and file a note of issue or extending the time to file a note of issue,” or in the alternative, “extending the time to file a notice of issue.” A defendant argued that the plaintiffs had delayed prosecuting this matter for almost ten years. The pleadings had been filed in July 2007. Until May 2016, “no discovery was sought or exchanged, no RJI was filed nor were any court conferences sought.” In May 2016, the plaintiffs served defendants with a notice demanding entry onto the premises and soon thereafter, the moving defendant served a demand that plaintiffs resume prosecution. The defendant did not oppose the plaintiffs’ demand for entry onto the premises.

The plaintiffs responded in July by seeking an extension of time to file their note of issue. The court held that the plaintiff’s response constitutes “a sufficient and timely response to the demand.” The court further noted that “numerous cases establish that a motion seeking such an extension constitutes a sufficient, timely response to a 90-day notice” and that “from February 2017 to November 2017, the parties sought adjournments” based on “productive” and “ongoing” settlement negotiations. Accordingly, the court granted the plaintiff’s motion to the extent that their time to file a note of issue was extended pursuant to a stipulation dated January 29, 2018.

Comment: Adam Leitman Bailey’s law firm represents a group of renters at the “West Village Houses complex,” which involves 42 buildings and 420 units. The plaintiffs had started a declaratory judgment against the original sponsor/developer of the complex in 2007. The complaint primarily sought a declaration that the plaintiffs’ leases were protected under the Rent Stabilization Code, since the “entire complex” had “received J-51 tax benefits.”

Bailey explained that the Court of Appeals, in the Roberts v. Tishman Speyer case, had conferred “rent stabilized status to tenants living in buildings receiving J-51 benefits.” However, that decision came down in 2009, “after the conversion process had already run its course having been approved by the attorney general.” Bailey noted that the complex had been converted to “free market with an affordable protection freeze that expires in March 2018.” He further explained that the renters had not taken action for almost a decade, because they were allegedly “led astray” by public officials. He asserted that the conversion was “illegal” and involved improper conduct by the owner and the government. Finally, Bailey noted that rents will climb from approximately $1,500 to between $8,000 to $12,000 per month.

[Attorney] of [Firm], attorney for a defendant, advised that both parties have moved for summary judgment on the rent regulatory status.

West Village Houses Renters Union v. WVH Housing Development Fund, Sup. Ct., N.Y. Co., Index No. 118482/2006, decided Feb. 2, 2018, Jaffe, J.

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