This summary nonpayment proceeding was commenced by 156 East 37th Street LLC (Petitioner) againstthe rent stabilized tenant of record Larry Negron (Respondent) seeking possession of 156 East 37th Street, Unit 1D, New York NY 10016 (Subject Premises) based on the allegation that Respondent has failed to pay rent due under his lease. PROCEDURAL HISTORY

Petitioner issued a three day demand dated January 7, 2013 seeking $2923.79 in arrears. [*2]The arrears sought were based on the increase due under the parties' 2009 renewal lease. The litigation stems from the fact that Petitioner failed to bill Respondent for the increased rent after the renewal was executed, and Petitioner continued to bill Respondent for the old rent and Respondent continued to pay the old rent, until Petitioner discovered its error.

The petition is dated February 4, 2013. On March 8, 2013, Respondent appeared by counsel and made a pre-answer motion to dismiss. The motion was based on Respondent's allegation that the three day demand was defective, because it included an initial charge dated November 17, 2011 for "retro rent." On May 13, 2013, the court (Spears,J) denied the motion pursuant to an order finding that the demand was not defective, and directing Respondent to serve and file an answer by May 31, 2013.

On May 31, 2013, Respondent filed an answer asserting that Petitioner waived its right to collect the increase due under the 2009 renewal lease, and a counterclaim asking the court to find that the 2011 renewal lease offer was improper in that it was not based on the legal rent.

On June 10, 2013, Respondent moved for summary judgment on its first affirmative defense and sought an order directing Petitioner to rescind its last renewal lease dated November 16, 2011 and issue a revised renewal lease to Respondent. Said motion was denied by the court (Spears, J) pursuant to a decision and order dated December 16, 2013, which provided that waiver was a defense requiring factual determinations which must be made at trial.

On April 10, 2014, the proceeding was assigned to Part L for trial. The trial commenced and concluded on said date, and the proceeding was adjourned to April 30, 2014 for the submission of post trial memoranda. On April 30, 2014, the memoranda were submitted and the court reserved decision.

TRIAL

The basic underlying facts at trial were undisputed. Petitioner is the owner of the subject building pursuant to a deed dated July 25, 2002 (Ex 1). There is a valid multiple dwelling registration for the building (Ex 2). Respondent is the rent stabilized tenant of record pursuant to an initial lease dated March 15, 1991 (Ex 4).

The records from DHCR regarding the legal registered rent were irregular. Exhibit C, offered by Respondent, is a certified DHCR printout as of February 2013 of registered rents for the Subject Premises from 1984 through 2012. The documents shows that no registration was filed for the Subject Premises from 1984 through 1990, or from 1992-1995. It further shows the legal registered rent for the Subject Premises for the years 2008 through 2011 is $611.60, and for 2012 it is $720.29.

Petitioner offered Exhibit 3 which purports to be an "attorney certified" version of rent registration documents. This exhibit contains various documents from various dates submitted as one package by counsel. Page 13 of this exhibit indicates that on December 2, 2013, Petitioner filed a rent registration for Respondent listing the legal regulated rent as $371.60, for a lease running from January 1, 2010 to December 31, 2011, which is the time frame covered by the 2009 renewal. In the several pages following that, Petitioner purports to annex an individual apartment registration for 2011 for Respondent at a rent of $611.60. It is not clear if or when this document was ever filed with DHCR, or whether it is an amended registration or an original registration. It certainly does not comport with the requirements for filing an amended registration, which require that an amended registration be labeled as such on the top of both the building and the apartment forms. Further, it is contradicted by the properly certified DHCR registration put into evidence by Respondent for the same period, as well as the earlier pages of [*3]the document submitted by Petitioner.

There are two lease renewals in evidence. There is a lease renewal dated September 1, 2009, executed by Respondent on October 30, 2009, for a two year period at a rate of $671.60 per month (Ex 5). The renewal is for the period of January 1, 2010 through December 31, 2011. The other lease renewal is dated November 16, 2011 and is for a two year period from March 1, 2012 through February 28, 2014 at a monthly rent of $720.29 (Ex 6).

Notwithstanding the executed renewals, Petitioner continued to bill Respondent for a monthly rent of $611.60 from January 2010 through November 2011, and Respondent continued to pay said amount (Ex A). Petitioner's rent ledger shows that Respondent had a zero balance as of October 2011 (Ex 7). In November 2011, Petitioner billed Respondent $611.60 for the monthly rent and $1380 for "Retro Rent," and from December 2011 through February 2012, Petitioner billed Respondent $671.60 for the monthly rent. In March 2012, Petitioner began billing Respondent $720.29 for the monthly rent.

DISCUSSION

§ 2525.1 of the Rent Stabilization Code provides in pertinent part "(i)t shall be unlawful, regardless of any contract, lease or other obligation heretofore or hereafter entered into, for any person to demand or receive any rent for any housing accommodation in excess of the legal regulated rent ...".

§ 2520.6 (e) of the Rent Stabilization Code defines legal regulated rent as "(t)he rent charged on the base date set forth in subdivision (f) of this section, plus any subsequent lawful increases and adjustments."

§ 2522.2 provides that "(t)he legal regulated rent shall be adjusted ... on the effective date of a lease or other rental agreement providing for the rent guidelines board annual rate of adjustments...".

§26-517 of the Rent Stabilization Law requires an owner to file an annual registration which is "proper" and which sets forth the current rent for the unit, and bars an owner for collecting any increase, if no such registration is filed, until a proper registration is filed.

§ 2521.2 of the Rent stabilization Code provides that where the amount of rent charged to and paid by the tenant is less than the legal regulated rent, the rent paid is considered a preferential rent.

In the case at bar, the parties had entered a lease renewal providing for an increase rent in monthly rent to$671.60 for January 2010 through December 2011. Petitioner inadvertently failed to bill for the increase. Respondent continued to pay the lower amount billed, and when Petitioner discovered its error, in or about November 2011, Petitioner started billing for the higher amount and retroactively billed for the increase not previously sought. The rent provided for in the renewal is a legal rent, that Petitioner would have the right to collect on proof of a proper and timely registration.

There was no "preferential rent" because that assumes a meeting of the minds to pay and accept the lower amount. There is no basis to make such a finding here.

There was no waiver established by Respondent at trial.

However, the failure by Petitioner to establish a valid registration for the rent of $671.60 for the relevant period is a failure by Petitioner in establishing its prima facie case. Petitioner failed to establish a right to collect a rent higher then $611.60 for 2010 and 2011, as this was the amount it registered as the legal rent, and Petitioner failed to establish an proper amendment of this registration was ever filed with DHCR. [*4]

Petitioner offered the registrations at trial without any explanation as to the discrepancies, or any testimony about any amended registrations.

The court assumes that Petitioner mistakenly filed the 2011 registration at the lower amount, just as it had mistakenly billed the Respondent for the lower amount. Presumably then Petitioner may also seek to properly amend said registrations. However, this too has become more complicated given the recent amendment provided in §2528.3 (c) and effective January 8, 2014, which provides that "(a)n owner seeking to file an amended registration statement for other than the present registration year must file an application pursuant to sections 2522.6 (b) and Part 2527 of this Title as applicable to establish the propriety of such amendment ....".

Given the foregoing, the court finds that Petitioner failed to establish its prima facie case at trial.

As such the proceeding is dismissed without prejudice.

This constitutes the decision and order of this Court.

_________________________

SABRINA B. KRAUS

Dated: New York, New York

May 8, 2014