Landlord-Tenant—Rent Stabilization—Lease Terminated—Tenant Profiteered by Subletting Apartment to 93 Customers Through Airbnb or 338 Days Over 18-Month Period—Dissent Asserts That Questions of Fact Should Preclude Summary Judgment

The Appellate Division, First Department (court) explained that “a rent-stabilized tenant who sublets her apartment at market rates to realize substantial profits not lawfully available to the landlord, and does so systematically, for a substantial length of time, places herself in jeopardy of having her lease terminated on that ground, with no right to cure….” The court found that this was “precisely what defendant did with the rent stabilized cooperative apartment….” Accordingly, the court held that the plaintiff was entitled to summary judgment on its cause of action for a declaration that it had validly terminated the lease and on its cause of action for ejectment, and as to liability on its claim “for recovery of the fair value of the use and occupancy of the apartment since defendant was served with notice of the termination of the lease.”

The defendant sublet her apartment to 93 different customers through the Airbnb website, “for 338 days spread over a period of 18 months…, at nightly rates ($95 for one person, $120 for two) far in excess of her stabilized rent, which was $1,758.01 per month…, equivalent to $57.80 per day.” The tenant was permitted by the Rent Stabilization Code (RSC) §2525.6(b), “to charge a 10 percent premium for an otherwise lawful sublet of a furnished rent-stabilized apartment, 110 percent of plaintiff's stabilized rent, on a per-diem basis,” which was only $63.58. Thus, the defendant's charge of $95 per night for single guests was “approximately one and a half times the lawful per-diem charge for a sublet, and the $120 she charged couples was nearly twice (approximately 189 percent) the lawful charge.”