In Ruxton Towers, L.P. v. Floratos , Andrew and Jean Floratos leased two different rent-stabilized apartments, removed the adjoining wall, and, combined the units without the owner's permission. Thereafter, a holdover proceeding against the Floratos was filed, based on those unauthorized alterations.
The parties then entered into a stipulation of settlement wherein the tenants agreed to incur the costs of legalizing the combined premises, signed an "unregulated lease," and, the rent was set at $2,001 a month. (A sum which exceeded the "legal rent" for the two units.)
After the tenants breached that agreement, and the New York City Civil Court awarded possession to Ruxton Towers (the landlord), the Floratos appealed to the Appellate Term, First Department, claiming the settlement was unenforceable because it violated public policy.
Unless the agreement falls within an exception authorized by statute or case law, a waiver of statutory protections usually isn't unenforceable, even when they might benefit a tenant.
The AT1 was of the view that since the alterations which triggered the higher rent were made by the tenants, rather than the owner, a "newly created unit" didn't come into existence and the underlying agreement couldn't be "countenanced."
Why wouldn't the Appellate Term allow for a stipulated resolution of the controversy?
Didn't the tenants face possible eviction for the unit's illegal alteration?
Guess, all in all it's just another brick ....
To view a copy of the Appellate Term's decision, please use this link: Ruxton Towers, L.P. v. Floratos