One of the smartest things the landlord of a rent-stabilized building can do is to use existing space in the building to create an apartment that did not previously exist. Such work—if properly done—acts as a foolproof vaccination against tenant claims of rent overcharge. Pursuant to Justice Gerald Lebovits’ July 12, 2016 decision in Rubin v. Decker Assoc., 52 Misc.3d 1208(A) (Sup. Ct. N.Y. Co. 2016), creating a new apartment, under the proper circumstances, can also defeat claims of rent-stabilized status.
The First-Rent Rule
One of the primary features of rent stabilization is that the current rent for a given apartment is a function of the rent previously charged. Thus, a tenant renewing his or her lease is charged a guideline increase (assuming there is one under the de Blasio/RGB regime) over the existing rent. An incoming tenant, similarly, will pay a statutory vacancy increase above the rent paid by the last tenant.
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