Recitation, as required by CPLR 2219(A), of the papers considered in the review of these Cross-Motions for: Dismissal and for Discovery:PAPERS NUMBEREDNotice of Motion, Affidavits & Exhibits Annexed 1Notice of Cross-Motion and Opposition, Affidavits & Exhibits Annexed 2Affirmation in Reply and in Opposition 3Affirmation in Reply 4Decision/Order Upon the foregoing cited papers, the Decision/Order on these Cross-Motions, Respondents’ Motion to Dismiss and Petitioner’s Motion for Discovery, is as follows:Respondents’ motion is granted. The petition is dismissed for failure to state a cause of action. Petitioner’s motion is denied as moot.Petitioner commenced this summary holdover proceeding to regain possession of the subject premises alleging it is a rent stabilized tenancy and that Ms Laing’s tenancy was terminated pursuant to Rent Stabilization Code (RSC) §2524.3(a) for violating a substantial obligation of the lease in failing to seek petitioner’s permission before changing the composition of individuals living in the apartment; profiteering in violation of RSC §2525.6(b), and illegal occupancy in violation of Real Property Law (RPL) §235-f.The initial lease, executed October 11, 2012, was between 561 W 144th St Holdings (petitioner’s predecessor in interest) as Owner and Lynda Nguyen and Lori Laing as Renters (“Initial Lease”). [Exh. A to Respondents' motion] Jovan Collins and Dara Pierre were identified as additional occupants in paragraph 3, which also states, “Renter is obligated to advise Owner, in writing, if any additional occupant moves into the apartment within 30 days of the date such additional occupant moves into the apartment. The apartment may not be occupied by more than the number of occupants permitted by law.” Paragraph 10 requires written permission from the owner before a “Renter” may assign any rights or sublet any portion of the premises, or before permitting anyone not named in the lease to occupy the premises; violation of paragraph 10 is considered a substantial violation of the lease. The lease does not address “profiteering” and explicitly states it is not subject to rent regulation — paragraph 58 states, “[t]his apartment is not subject to rent stabilization;” paragraph 56 denies a right of renewal.In 2013, Ms Laing and Ms Nguyen signed a one-year renewal lease commencing September 1, 2013 and ending August 31, 2014 with a rent of $8500 per month — an increase of $1000 from the prior lease (“Renewal Lease”). [Exh B to Respondents' Motion] The Renewal Lease also explicitly stated it was not subject to rent stabilization. In June 2017, Ms Laing signed a two-year renewal without Ms Nguyen beginning September 1, 2017 ending August 31, 2019 with a rent of $1937.90 (the “Current Lease”). [Exh C to Respondents' Motion] The Current Lease indicates the apartment is subject to Rent Stabilization.Despite being subject to Rent Stabilization on its face, the Current Lease was not registered with the Department of Housing and Community Renewal (DHCR). Despite the language of the Initial Lease and the Renewal Lease, they were registered with DHCR. In 2013, only Ms Nguyen was registered as the tenant with a rent as $1750. Ms Laing’s name was not registered. In 2014, a one-year renewal ending 8/31/2014 was registered to both Ms Laing and Ms Nguyen with a rent of $1850. In 2015, the same lease was registered but as a two-year renewal ending 8/31/14, same rent. After registration of the Renewal Lease, no more were filed. In October 2018, after commencement of this proceedings, petitioner registered the leases for 2016-2018 with DHCR. [Exh B to Petitioner's Cross Motion]Based upon the above record, the petition fails to state a cause of action and is dismissed pursuant to CPLR 3211(a)(7). No valid Rent-Stabilized lease exists between the parties. The Current Lease is a nullity because it renews that which was void ab initio for its wrongful denial of rent stabilized rights to respondent. RSC §2520.13. Here, both parties admit the premises is Rent Stabilized, yet neither the Initial Lease nor the Current Lease advised respondent of her rights and responsibilities under the Rent Stabilization Law and Code, which is a violation of RSC §2522.5. The Initial Lease being a nullity, it cannot be renewed. AA Kodash Holdings v. John, 2018 NYLJ LEXIS 3681 (Kings Cty Civ Ct, 11/7/18). Without a valid lease, petitioner cannot maintain an action under RSC 2524.3(a), as advised in the Notice of Termination. Moreover, without a valid lease, petitioner cannot maintain an action under RPL §735-f. Capitol Holding Co. v. Stavrolakes, 242 AD2d 240 (1st Dep’t 1997).As to profiteering, neither the Initial Lease nor the Current Lease notified Ms Laing of any prohibition against profiteering. Profiteering is generally encouraged in the free market; its prohibition is a creature of Rent Stabilization. Even if profiteering were prohibited by function of the apartment being Rent Stabilized, regardless of whether Ms Laing had notice or knowledge, the rent upon which petitioner calculates profiteering — $1938.90 — is not a proper rent. That rent was not registered until after this proceeding commenced. Finally, roommate overcharge does not create a cause of action for the owner, but for the roommate, and it does not create a basis for eviction. RSC §2525.7, First Hudson Capital, LLC v. Seaborn, 54 AD3d 251 (1st Dep’t 2008)This is the decision and order of the court. Copies shall be mailed upon the parties.Date: 4/15/19
