1250 Broadway, 27th Floor New York, NY 10001



After a New York County Supreme Court Justice concluded that Graham Ct. Owners Corp had committed “fraud,” by deregulating plaintiff's apartment before any improvements were made, the owner appealed to the Appellate Division, First Department.  And because it found the underlying determination was supported by a “fair interpretation of the evidence,” the AD1 affirmed the outcome -- for the most part.

While the owner claimed to have performed some $60,000 in improvements (which resulted in the unit’s deregulation), the tenant (and corroborating witnesses) testified that the unit was “uninhabitable” when it was leased to him.

Given that the landlord’s proof of the work was called into question, (as was his credibility), the AD1 thought the trial court had correctly found that the “defendant engaged in a fraudulent scheme to deregulate the subject apartment by claiming fictional individual apartment improvements” which thus mandated the imposition of the “default formula” (to determine the unit’s correct legal regulated rent).

But since the tenant had previously waived any entitlement to legal fees in exchange for a “partial settlement,” the AD1 modified that part of the underlying order which allowed the tenant to recoup fees and costs.

How would you deconstruct that?

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Davis v Graham Ct. Owners Corp