Not For Profit Ineligible For Rent Stabiliazation by Daniel Bateman

The New York City Civil Court has ruled that a Not for Profit organization was not eligible to receive benefits as a rent stabilized tenant.

Iris House is a not for profit organization which operates a program that provides housing for women and families living with HIV. They rent numerous apartments out as scatter site housing as well as provide these individuals and families with supportive services. Since 1998 Iris House had rented an apartment from Lexington NY Realty LLC, each year the leases have been issued on rent stabilized lease forms. However in the fall of 2011 when it came time for Iris House to renew their lease they were served with a Notice to Vacate terminating Iris House’s tenancy December 31, 2011.

The question before the court to decide was whether Iris House is a rent stabilized tenant entitled to benefits under the rent stabilization laws. Lexington NY Realty brought before the court the case Manocherian v. Lenox Hosp 84 NY2d 385 [1994]. This stated that corporations renting premises on behalf of occupants who for various reasons could not be named tenants only were entitled to Rent Stabilization where the lease specifies a particular individual on the lease. This is to prevent a corporation from gaining perpetual tenancy.

Due to the fact that Iris House never had a specific occupant on the leases the court found they lack rent stabilization status. Even assuming that this lease was for the benefit of a group of families affected with HIV/AIDS, it still does not remedy the fact that no specific individual was on the lease. At the time of the lease signing, Iris House had no idea who the occupant of the apartment would be.

This case was reported in the New York Law Journal on October 11th, 2012.

About Peter Moulinos
The founder and partner of Moulinos & Associates LLC. His experience as an attorney includes practice on matters involving commercial law, real estate law, litigation, international law, employment law, estate practice and trademark matters.

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