Parties Cannot Agree To Subject Apartment To Rent Stabilization Law

On Tuesday the First Department held in 546 W. 156th St. HDFC v Smalls, 2007 NY Slip Op 05574 that parties can not voluntarily agree to subject an apartment to Rent Stabilization Laws where the apartment is in a building created as a not-for-profit housing cooperative under the Private Housing Finance Law. Such buildings are statutorily exempt from rent stabilization (Administrative Code of City of New York § 26-504[a]; 9 NYCRR § 2520.11[j], [l]), and thus, the Court held that for parties to voluntarily subject an apartment to rent stabilization would contravene the statutory scheme. However, the Court did state that such a voluntary agreement could be enforceable only to the extent that it set the rental amount and only for the duration of the lease signed by the parties.

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