Illegally Destabilized Unit?

[jpm1992]

My landlord recently emailed our building that he is potentially pursuing a sale. To protect us against rent hikes from new ownership, we've been investigating a long-held suspicion that many of the units may have been illegally de-stabilized.

Background on the building:
- Built in 1920
- Currently has eight units
- One of the tenants has been a resident for over 50 years and confirms that they pay a rent-stabilized rate
- We're in close contact with our neighbors. All those who haven't already requested rent history are in the process for doing so

Background on my unit, history requested in 2023:
- From 1984 to 1986 the unit was Rent Stabilized (RS)
- From 1987 to 1989 the unit was temporarily exempt due to owner residence in it (PE)
- In 1990 the unit was Rent Stabilized (RS)
- From 1991 to 1995 the unit was temporarily exempt due to owner residence in it (RS-TE)
- From 1996 to 2020 (the last year of data) it shows "*REG NOT FOUND FOR SUBJECT PREMISES*"
- The building has been managed by the current owner for 22 years
- We know the unit was at one time split from one large unit (3) into two smaller ones (3B and 3F). I requested data for both 3F and 3, and was told that there is no existing data for 3F - only for 3

From what I can tell, it seems like when the owner moved out, the unit should have reverted back to a Rent Stabilized status, but was never re-registered as such. Please let me know your thoughts, and if there's any additional information that would be helpful to provide. Thank you all in advance!

Edit: Since there's an absence of evidence, would it ever fall upon the potential new owner to prove the unit(s) WAS DESTABILIZED rather than us as the tenants to prove it is STILL STABILIZED?

[Ohio_steve]

Then you kind of answered your own question. There were not more than six units at the relevant point in time. Are you saying the folks who lived there for 50 years have no memory of whether there was a tenant in your unit between 1995 and when you moved in? It sounds deregulated by a vacancy or when they partitioned the units.

Check on the HPD website for the notices of property value from the Dept of Finance and the actual tax bills. You can check by building and unit. Look for any exemptions or abatements to start. You might have something there.

[jpm1992]

Not quite - I've done a tremendous amount of research and have talked at length with my building's long-time residents so let me clarify.
- The building was built with 8 units. Sometime in the 60s, two of the RS units were combined into one. This "mega-unit" was used as the residence for the building's owner.
- The last listed rental history is from 1995 when it is listed as RS-TE. For 1996-today, the rental history from DHCR is *REG NOT FOUND FOR SUBJECT PREMISES*.
- Someone besides the owner lived in the "mega-unit" from 1996-2011, however there is no DHCR rental history for this time (*REG NOT FOUND FOR SUBJECT PREMISES*).
- In 2011, the "mega-unit" was split back into two separate apartments and a new tenant moved into my unit. From my reading of DHCR statute, the spit apartments are de-facto new units and should have been registered as RS based on the former perimeter rule. The LL would also be entitled to charge a "first-rent" (which was the law at the time), but the unit would have only have passed out of regulation if it had been (1) correctly submitted for deregulation and (2) vacant prior to the new laws of 2019 which eliminated the ability for LL's to high-rent deregulate a unit.
- The resident lived in my unit from 2011-2020, and thus it was never vacant to be high-rent deregulated prior to 2019. The current statute is very clear that RS units were not automatically high-rent deregulated - it was something that had to be filed for.
- I should also note, there's no record of any improvements made that would have triggered de-regulation.

Despite the extremely complicated nature of my situation, my thinking is that it boils down to something pretty simple: a new RS apartment was created in 2011 when a RS unit was split in two. This unit was eligible for high-rent deregulation, but because the LL never filed for deregulation AND because it was never vacant, there was never an opportunity for it to fall out of it's RS before 2019 which then made that illegal.

Let me know if my thinking makes sense to you all, if I'm missing anything, and if you have any questions. Thanks!

[Ohio_steve]

I have some info for part of your inquiry. Re: the number of units: the number on the date the building first became stabilized would be your number. You would use July 1, 1974 as the base date. It seems you are ok there. My source is an article prepared by the law firm Rosenberg Estis, a landlord firm, for the NYLJ in 2021. I did not independently confirm the citations. There is an earlier base date for another exception, 1969 and the landlord cannot avoid this with subsequent combinations. There are also rules re: a super’s apt.
As you know the landlord has the burden, but what is your rent? Your scenario seems complicated because it appears to be destabilized in 2011. If that tenant had a rent stabilized lease, then you should have one too, though . I will reread your post.

Sometimes there is no “answer” other than you petition the DHCR or the court for one, and present your facts. The court or an admin agency does not always get it right either.