Recitation, as required by CPLR 2219(a), of the papers considered. Papers Numbered

Upon the foregoing cited papers, the Decision/Order is as follows:

Petitioner commenced this summary nonpayment proceeding seeking to recover possession of the subject apartment, originally pleaded as governed by the Rent Stabilization Law. Respondent initially appeared self-represented and interposed an answer. On March 29, 2016, Respondent entered into a stipulation of settlement granting Petitioner a possessory judgment and monetary judgment for rent arrears. The stipulation provided that execution of the warrant of eviction would be stayed through May 10, 2016 for payment of the arrears.

On May 26, 2016 after retaining counsel, Respondent moved by order to show cause to, inter alia, vacate the stipulation dated March 29, 2016 on the grounds that the stipulation was improvidently entered into because by doing so, he unintentionally waived substantial defenses to the proceeding without receiving any consideration. Respondent also sought to amend his answer to include affirmative defenses, including rent overcharge and unlawful deregulation, as well as counter-claims seeking treble damages for rent overcharge and reasonable attorneys' fees. In support of his motion, Respondent presented a Division of Housing and Community Renewal (hereinafter "DHCR") apartment registration record, which indicated that the apartment was registered as exempt from Rent Stabilization for several years, going back to 2012. The registration contradicted the specific allegations in the petition that the premises were properly [*2]registered as required by the Rent Stabilization Law and Code constituting grounds for a potential dismissal of the petition for failure to comply with a condition precedent to maintaining a nonpayment proceeding.

Petitioner then cross-moved for an order permitting amendment of the petition to substitute the erroneous allegation of rent regulation coverage with language that the premises were decontrolled due to a high rent vacancy lease entered into in 2011.

Prompted by Petitioner's request to amend the petition, Respondent then cross-moved for an order permitting discovery on the issue of the apartment's ostensible permanent exemption from Rent Stabilization, including information related to rent increases taken prior to the alleged deregulation and documents relating to individual apartment improvements and major capital improvements.

By Decision and Order dated February 24, 2017, this Court allowed both parties to amend their pleadings; vacated the stipulation of March 29, 2016 to enable Respondent to defend Petitioner's new allegation that the premises are not covered by rent regulation; granted Respondent's request for discovery relating to the purported deregulation of the subject apartment in 2011; and denied Respondent's request for discovery beyond the four-year statute of limitations for rent overcharge claims, finding that Respondent did not establish a colorable claim of fraud.

Now, Petitioner moves to renew and/or reargue those portions of Respondent's motions seeking to vacate the stipulation dated March 29, 2016, amend Respondent's answer and conduct discovery. Petitioner contends that renewal is warranted, since the DHCR issued an Order on February 22, 2017 while the parties' motions were pending, determining that the subject apartment was not subject to Rent Stabilization. Petitioner argues that the DHCR Order is new evidence warranting renewal of Respondent's motions, since it would have changed the court's prior determination and constitutes res judicata in this proceeding as to Respondent's rent overcharge and unlawful deregulation claims. Petitioner also claims that the court misapprehended relevant facts and/or controlling law, necessitating reargument. More specifically, Petitioner claims that the court misapprehended Rent Stabilization Code §2528.3, which requires landlords to register, annually each July, leases in effect on April 1st of the preceding year. Therefore, Petitioner argues that there is no irregularity in the rent registrations, since it was not required to register the lease dated June 5, 2011 until July 2012. Notwithstanding, Petitioner further argues that, as the subject premises was properly deregulated, there was no requirement to register the lease dated June 5, 2011, since it was the first exempt lease. As such, Petitioner contends that Respondents' motions should have been denied.

In opposition, Respondent argues that, when he filed his rent overcharge claim with the DHCR on March 21, 2016 while he was self-represented, he did not allege unlawful deregulation. Therefore, the DHCR Order issued on February 22, 2017 only addressed the issue of rent overcharge, not unlawful deregulation. Therefore, Petitioner's request for renewal should be denied. Respondent also contends that Petitioner's request for reargument should be denied, since, although the court erred in questioning why the lease dated June 5, 2011 was not registered by Petitioner in July 2011, that error was not the sole basis for the relief granted by the court.

A motion to renew is generally based upon new facts not offered on the prior motion that [*3]would change the prior determination or demonstrate that there has been a change in the law that would change the prior determination; and state a reasonable justification for failing to submit such facts on the prior motion. CPLR §2221(e).

Here, Petitioner contends that the Order issued by the DHCR on February 22, 2017 serves as new evidence that would have changed the court's Decision dated February 24, 2017. Petitioner further claims that the DHCR Order constitutes res judicata in this proceeding as to Respondent's rent overcharge and unlawful deregulation claims.

Under the doctrine of res judicata, or claim preclusion, a valid final judgment or determination bars the same parties from relitigating the same claim. Landau, PC v LaRossa, Mitchell & Ross, 11 NY3d 8 (2008).

In its Order, the DHCR denied Respondent's rent overcharge complaint on the basis that"evidence in the agency's record indicates that the subject apartment has been deregulated since June 5, 2011 due to high rent vacancy. At the time complainant took occupancy (November 1, 2014), the subject apartment was no longer under the jurisdiction of this agency. Therefore, it is ordered that the relief is denied, and/or this proceeding is terminated."

A review of Respondent's DHCR rent overcharge complaint reveals that Respondent did not check off the box on his complaint to request that the DHCR investigate the issue of unlawful deregulation. A review of Petitioner's answer to Respondent's overcharge complaint reveals that Petitioner asserted that "tenant's complaint for rent overcharge should be denied" and annexed copies of renewal leases for four years prior to the filing of Respondent's overcharge complaint, including the lease dated June 5, 2011. Based upon the lease dated June 5, 2011, the DHCR denied Respondent's overcharge complaint on the basis that the subject apartment was not under the DHCR's jurisdiction when the respondent took occupancy. Based upon review of the submissions to the DHCR, it is clear that the DHCR did not investigate or determine the issue of whether the deregulation of the premises was proper, as that issue was not submitted to the DHCR for investigation. Furthermore, the DHCR Order also does not have res judicata effect as to the issue of rent overcharge, since that issue was not finally determined by the DHCR. Instead, the DHCR stated that it did not have jurisdiction to address the issue of rent overcharge. Accordingly, Petitioner's motion to renew is denied.

"A motion to reargue, addressed to the discretion of the court, is designed to afford a party an opportunity to establish that the court overlooked or misapprehended the relevant facts or misapplied any controlling principles of law. Its purpose is not to serve as a vehicle to permit the unsuccessful party to argue once again the very questions previously decided." Mangine v Keller, 182 AD2d 476 (1st Dept. 1992).

As Petitioner is correct in its application of Rent Stabilization Code §2528.3, in that it was not required to register the lease dated June 5, 2011 until July 2012, Petitioner's motion to reargue is granted. Upon reargument, however, this Court's Decision dated February 24, 2017 stands, since the inquiry as to why Petitioner did not register the lease dated June 5, 2011 in July 2011 was not the sole basis for the relief granted. There still remains sufficient grounds to find that the apartment deregulation was questionable and that Respondent is entitled to discovery.

This Court granted Respondent's request to vacate the stipulation dated March 29, 2016, in light of Petitioner's request to amend the petition to change the regulatory status of the subject apartment from rent regulated to no longer rent regulated effective 2011 due to high rent [*4]vacancy, occurring prior to Respondent taking possession. Petitioner moved to amend its pleadings to allege deregulation only after Respondent, with the assistance of counsel, challenged the initial allegation of proper registration with the DHCR. Since this proceeding was commenced and settled with the impression that the premises were rent regulated, the court vacated the stipulation dated March 29, 2016, finding that Respondent should be permitted to defend Petitioner's new allegation that the premises are not covered by rent regulation. This Court also granted both parties' requests to amend their pleadings to enable all claims and defenses to be fully asserted and litigated, finding that no significant prejudice or undue delay was established.

Finally, in granting Respondent's request for discovery relating to the purported deregulation of the subject apartment in 2011, this Court found that Respondent is entitled to discovery on the calculation method and basis for the high rent vacancy which occurred in 2011 and was registered in July 2012, which is within the relevant four-year statutory period.

This Court noted that Respondent took possession of the subject premises pursuant to a free market lease, dated October 22, 2014, for a one year term, commencing on November 01, 2014, at $1,275.00 per month. The DHCR record of registrations shows that the last rent stabilized tenant Gina E. Williams, occupied the apartment under a one year lease commencing August 01, 2010, and expiring on July 31, 2011, at the rate of $982.39 per month. On June 15, 2011, Petitioner entered into a lease with Wilson Collazo, a new tenant, whose term was set to begin on June 15, 2011 and expire on August 31, 2012, for a highly irregular term of fourteen and one half months. According to Petitioner, this vacancy lease rendered the apartment exempt from rent stabilization coverage because the reserved rent was indicated as $2,082.79 per month, ostensibly qualifying it for a "high rent vacancy" exemption. On the purported date of the lease, the threshold for this type of exemption was a vacancy lease with a legal regulated rent of $2,000.00 or more per month.

In 2011, the Rent Stabilization Law was amended effective July 1, 2011, in accordance with the Rent Act of 2011, in that the high rent vacancy threshold was raised from $2,000.00 to $2,500.00 per month. DHCR incorporated this amendment into the Rent Stabilization Code, by enacting its own amendment, found in RSC §2520.11(s). In addition, DHCR added a disclosure requirement, found in RSC §2520.11(u), to mandate disclosure of the calculations leading to exemption, including any individual apartment improvements, to the first exempt tenant.

The two-page standard Blumberg form initial lease dated June 15, 2011 at issue gives rise to serious questions as to whether deregulation of the subject premises was lawful. Meriting concern is the issue of the unusual fourteen and one half month term duration of the initial exempt lease. This Court noted that had this been a standard one year lease with the same August 31, 2011 expiration, it would have had to commence on September 01, 2011, and the amendment effective July 1, 2011 would have been applicable to it, disabling its deregulation.

Based upon the foregoing, this Court found that the subject apartment's deregulated status was questionable under the circumstances; that Respondent should be permitted the latitude to seek information on the calculation and basis of the increases taken to bring the apartment legal regulated rent above the $2,000.00 a month rent threshold; that the information requested is not available from the public record; that discovery is warranted as the Farkas criteria of ample need have been met; and that Petitioner has impliedly agreed to provide the information concerning deregulation since it has already turned over documents, including the 2011 initial deregulated lease, in its papers.

Accordingly, notwithstanding the lease registration issue, upon reargument, this Court adheres to the relief granted in its initial Decision.

The Court has considered the parties' remaining arguments and finds them to be without merit.

Respondent is directed to serve this Decision and Order with Notice of Entry upon Petitioner within 20 days.