Aijaz v. Hillside Place, LLC

In Aijaz v. Hillside Place, LLC, 3 Misc. 3d 754, [2004], the tenant sued for a rent overcharge based on prior lease renewals that were calculated on the legal rent rather than preferential rent. The court dismissed the landlord's affirmative defense that chapter 82 of the Laws of 2003 permitted the landlord to abandon the preferential rent in a lease renewal, in favor of the legal regulated rent holding that the law did not apply to a preferential rent that was given for consideration and contracted for the entire duration of the tenancy. In Aijaz v. Hillside Place, LLC, the original 1997 lease provided that the preferential rent would last for the term of the tenant's occupancy. Although the tenant twice entered into renewal leases offering the legal regulated rent, the court ruled that, because of the original lease, the landlord had to charge the preferential rent (Aijaz, 8 Misc 3d at 76, 798 N.Y.S.2d 840). In addition, the court found that the tenant had a contract cause of action for the refund of the rents paid in excess of the agreed-upon preferential rent (id.). The Appellate Term held that the amendment was not intended to prevent parties from contracting or stipulating to preferences which extend into renewal periods. Since the parties agreed that the preference would be for the entire tenancy there was an overcharge based on a contract cause of action.