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When Is a Settlement Not a Settlement?
In April 2006, setting off in a new direction, the Appellate Division held that settlement agreements that favor a tenant can be unenforceable. Drucker v. Mauro 814 NYS 2d 43 (1st Dept. 2006). There was a two-justice dissent, but the appeal to the Court of Appeals was recently dismissed due to non-finality. Thus, Drucker needs to be looked at to gauge when a settlement is indeed a settlement in landlord-tenant disputes.
The Case
In Drucker, landlord sought a declaration from the Division of Housing and Community Renewal (DHCR) that the Drucker apartment was not rent-stabilized. While the DHCR case was pending, the parties negotiated an out-of-court settlement that raised tenants' rent, but guaranteed lease renewals in perpetuity at rates tracking rent stabilization guideline increases. Shortly after the settlement agreement, the DHCR ruled that the apartment was rent-stabilized. The parties went on without incident for about 7 years until the landlord sought to deregulate the apartment, this time based on luxury deregulation, as the rent had reached $2000 per month.
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