| Kuzmich v 50 Murray St. Acquisition LLC |
| 2018 NY Slip Op 00336 [157 AD3d 556] |
| January 18, 2018 |
| Appellate Division, First Department |
[*1]
| John Kuzmich et al., Respondents, v 50 Murray StreetAcquisition LLC, Appellant. |
Holwell Shuster & Goldberg, LLP, New York (James M. McGuire of counsel), forappellant.
Himmelstein, McConnell, Gribben, Donoghue & Joseph LLP, New York (Serge Josephof counsel), for respondents.
Rosenberg & Estis, P.C., New York (Alexander Lycoyannis of counsel), for the RealEstate Board of New York, amicus curiae.
Letitia James, Public Advocate for the City of New York, New York (Molly Thomas-Jensenof counsel), for the Public Advocate for the City of New York, amicus curiae.
Order, Supreme Court, New York County (Carol R. Edmead, J.), entered July 3, 2017,which, among other things, denied defendant's motion for summary judgment, granted plaintiffs'cross motion for partial summary judgment, declared that plaintiffs' apartments are subject to rentstabilization, and ordered that a special referee be designated to hear and determine the amountof overcharges and the amount of attorneys' fees and costs incurred by plaintiffs in litigating thisaction, unanimously reversed, on the law, without costs, plaintiffs' cross motion denied,defendant's motion for summary judgment granted to the extent of declaring that plaintiffs'apartments were properly deregulated and are not subject to rent stabilization, the ordersregarding the special referee vacated, and the matter remanded for further proceedings.
Except for condominiums and cooperatives, dwellings in buildings that receive tax benefitspursuant to Real Property Tax Law § 421-g are subject to rent stabilization for theentire period the building is receiving 421-g benefits (RPTL 421-g [6]). However, 421-gbuildings are subject to the luxury vacancy decontrol provisions of Rent Stabilization Law of1969 (Administrative Code of City of NY) § 26-504.2 (a), unlike buildings thatreceive tax benefits pursuant to Real Property Tax Law §§ 421-a and 489.
Real Property Tax Law § 421-g does not create another exemption to RentStabilization Law § 26-504.2 (a). Supreme Court essentially interpreted RealProperty Tax Law § 421-g (6)'s prefatory phrase "Notwithstanding the provisions ofany local law for [rent stabilization]" to mean "Notwithstanding [the luxury decontrol] provisionsof any local law." However, "[a] statute or legislative act is to be construed as a whole, and allparts of an act are to be read and construed together to determine the legislative intent" (New York State Psychiatric Assn., Inc. vNew York State Dept. of Health, 19 NY3d 17, 23-24 [2012] [internal quotation marksomitted]). Accordingly, the prefatory phrase, which also appears identically in RPTL 421-a (2)(f), must be read in tandem with the coverage clause of that section. The prefatory phrase and thecoverage clause were both necessary to extend rent stabilization to certain dwellings in buildingsreceiving 421-g benefits.
[*2] As plaintiffs pointout, if 421-g buildings are subject to luxury vacancy decontrol, then most, if not all, apartmentsin buildings receiving 421-g benefits would, in fact, never be rent-stabilized, because the initialmonthly rents of virtually all such apartments were set, as here, at or above the deregulationthreshold. Although courts should construe statutes to avoid "objectionable, unreasonable orabsurd consequences" (Long v State ofNew York, 7 NY3d 269, 273 [2006]), the legislative history in this case demonstratesthat the legislature was aware of such consequences during debate on the bill that enacted RealProperty Tax Law § 421-g.
Plaintiffs also argue that a dwelling in a building receiving 421-g benefits cannot bederegulated upon the setting of the initial rent at or above the deregulation threshold. Theycontend that a rent-stabilized dwelling cannot be deregulated unless it is first registered as arent-stabilized apartment. However, this Court recently rejected this contention in Matter of Park v New York State Div. ofHous. & Community Renewal (150 AD3d 105, 113 [1st Dept 2017], lvdismissed 30 NY3d 961 [2017]).
We have considered plaintiffs' remaining arguments and find them unavailing.Concur—Acosta, P.J., Sweeny, Gische and Andrias, JJ. [Prior Case History: 2017 NYSlip Op 31416(U).]