In Leheup v. Direct Realty, LLC (2008 WL 2871889, 2008 NY Slip Op 32028[U] [Sup Ct, NY County 2008]), a new landlord used a two-step approach in an attempt to deregulate an apartment. After a period of vacancy predating change in ownership, it issued a one-year lease to the first set of tenants for $2,065.00 per month, reduced to the preferential rate of $1,750.00 per month. The landlord gave plaintiff, the next tenant, a one-year lease at the same face value, reduced to 1,800.00 per month. The landlord argued that the first vacancy lease effectively deregulated the apartment, and plaintiff could not possibly claim that the apartment was rent stabilized. The court, however, determined that while 9 NYCRR 2526.1 (a) (3) (iii) was applicable, the landlord's failure to provide the first tenants a rent-stabilized lease meant that their rent was not "the legal regulated rent" and could not be used for the purposes of deregulation. Thus, the court found that the apartment did not lose its rent-stabilized status.