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FYI: A state Court of Appeals panel issued a rebuke this week to landlords seeking to move units out of rent stabilization through an administrative backdoor called “first rent”—which exempts units if landlords make significant renovations that essentially create a new apartment. The case stemmed from a 1999 complaint from tenants in a Lower East Side apartment that the landlord renovated by moving a wall between two units and then raised rent from $673 to $1,950, citing the “first rent” exemption. The Division of Housing and Community Renewal and a state Supreme Court upheld the rent hike. But in a harshly worded opinion this week, Appellate Judge Peter Tom said allowing the landlord’s move would be “unreasonable in view of the goals of rent stabilization” and would create a dangerous precedent for future landlords seeking the exemption. Tom said the standard must be set high, and that only renovations that completely eradicate the former unit and create entirely new apartments should quality. [9/19/03]

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