In Cambridge Dev., LLC v Staysna , Cambridge Development wanted to evict a tenant when it was discovered Bruce Staysna subleased his apartment and charged more than three times the lawful regulated rent for that unit. (Staysna paid only $425 a month but rented out the apartment for $1,625 a month while "out of town.")
When Cambridge brought its holdover proceeding, the New York County Civil Court found Staysna's conduct violative of applicable law and granted the landlord's request for an eviction.
On appeal, the Appellate Term, First Department, agreed "profiteering" or "commercial exploitation" of a rent-stabilized apartment can result in a tenancy's termination, but thought the isolated, short-term sublet which transpired in this instance didn't comprise the type of conduct needed to justify an eviction -- particularly since the tenant refunded the money when he learned he was violating the law. (Staysna applied the excess to future rent owed by the subtenant and when the latter prematurely left the apartment the unapplied amount was insubstantial in the AT1's view.)
Because he didn't think Staysna's activity was insubstantial and saw "profiteering" as undermining the integrity of the rent stabilization system, a lone dissenter -- Justice McKeon -- disagreed with the majority's decision and would have affirmed the loss of Staysna's home.
We hope to profit from the Appellate Division's wisdom on this subject.
To download a copy of the Appellate Term's decision, please use this link: Cambridge Dev., LLC v Staysna