DHCR Legal Rent as the Measure of Use-and-Occupancy and Strict Rent‑Stabilization Notice Compliance for Ejectment: Commentary on Esposito v. Larig (2025 NY Slip Op 04704)

Introduction

Esposito v. Larig, decided by the Appellate Division, Second Department on August 20, 2025, addresses a long-running dispute arising from a rent-stabilized residential tenancy in Brooklyn. The landlord, Tina Esposito, sought multiple remedies against the tenants, Sophronia Larig and others, including ejectment, damages, and use and occupancy. The litigation followed a 2011 Housing Court dismissal that recognized the tenants’ rent-stabilized status but left the legal regulated rent unresolved. A later administrative order by the New York State Division of Housing and Community Renewal (DHCR) set the initial legal regulated rent at $2,490 per month.

The appellate court’s decision is significant on two fronts:

It holds that a DHCR order fixing the legal regulated rent can serve as the benchmark for calculating the “reasonable value” of use and occupancy under Real Property Law (RPL) § 220, supporting a substantial retroactive money judgment (subject to the statute of limitations).
It reaffirms that ejectment in a rent-stabilized context cannot be granted absent strict compliance with the Rent Stabilization Code’s pre-termination notice requirements, and that contempt will not lie without a clear, unequivocal court mandate.

Summary of the Judgment

The Appellate Division modified the Supreme Court’s order to grant the landlord summary judgment on her second cause of action, awarding the value of use and occupancy under RPL § 220 at $2,490 per month from October 1, 2010, through November 29, 2022, and remitted for entry of a judgment reflecting that value. The court:

Affirmed the denial of civil contempt because the prior 2019 appellate decision did not impose a clear and specific mandate that the tenants violated.
Denied summary judgment on ejectment and on RPAPL § 601 damages because the landlord failed to demonstrate service of the required notices under the Rent Stabilization Code (9 NYCRR 2524.2 and 2524.3) to establish a present right to possession.
Declined to award legal fees under the lease on the facts presented.
Affirmed the denial of leave to amend the complaint to seek a declaratory judgment effectively compelling the tenants to execute the landlord’s lease form, treating it as a request for a mandatory injunction that was palpably insufficient.

Factual Background and Procedural History

2005–2006: Defendants signed a one-year, nonregulated market lease for a first-floor apartment. They held over after expiration and stopped paying rent as of July 31, 2006.
2011 Housing Court proceeding: Petition dismissed; court recognized tenants were entitled to rent-stabilized status but could not fix the legal regulated rent for lack of evidence.
2016 Supreme Court action: Landlord sued for (1) determination of the rent, (2) use and occupancy under RPL § 220, (3) ejectment, (4) damages and attorneys’ fees under RPAPL § 601, and (5) attorneys’ fees under the lease.
2019 appellate decision: Directed a pendente lite determination of use and occupancy and an undertaking for past use and occupancy, remitting to Supreme Court for those calculations.
March 19, 2021: DHCR set the initial legal regulated rent at $2,490 and directed registration and offering of a rent-stabilized lease.
April 29, 2022: After a hearing on stipulated facts, a referee set pendente lite use and occupancy at $2,490 per month and required an undertaking of $346,110 for past use and occupancy (resolved in a companion appeal).
2022 motions: Tenants moved for summary judgment dismissing several causes; landlord cross-moved for contempt and summary judgment or leave to amend. The Supreme Court denied the landlord’s requested relief; the landlord appealed.

Core Holdings and New Practical Rule

Use and occupancy under RPL § 220 may be fixed by reference to a DHCR order establishing the legal regulated rent, and summary judgment awarding retroactive use and occupancy can be granted on that basis when the material facts are established (occupancy, no payments, DHCR rent, registration).
Recovery is limited by the statute of limitations; here, the record supported an award from September 29, 2010, but the court granted from October 1, 2010, because that is what the landlord sought.
Ejectment in rent-stabilized housing requires strict adherence to the Rent Stabilization Code’s notice-to-cure and notice-of-termination requirements; failure to show compliance defeats a claim to immediate possession and RPAPL § 601 damages.
Civil contempt requires a clear and unequivocal mandate; an appellate remittitur directing a future determination is not itself a clear payment command.
A proposed amendment effectively seeking a mandatory injunction (to compel lease execution) will be denied if palpably insufficient or devoid of merit, given the high bar for such relief.

Detailed Analysis

Precedents Cited and Their Influence

Perrone v. Perrone, 229 AD3d 816: Confirms that contempt is discretionary and requires strict proof. Guided the court to affirm denial of contempt.
El-Dehdan v. El-Dehdan, 26 NY3d 19: Sets the elements of civil contempt (clear mandate, knowledge, violation, and prejudice). Applied to find no contempt where the prior appellate decision did not specify a clear directive breached by the tenants.
Keneally, Lynch & Bak, LLP v. Salvi, 231 AD3d 1137: Reinforces the El-Dehdan standard; supports denial of contempt.
Liberty Equity Restoration Corp. v. Pil Soung Park, 129 AD3d 787; Magen David of Union Sq. v. 3 W. 16th St., LLC, 89 AD3d 24: Stand for awarding use and occupancy at the reasonable value of the premises where no rent is being paid, and permitting summary resolution where the rate is established. These cases underpin using the DHCR-set rent as the “reasonable value.”
City of New York v. Anton, 169 AD3d 999; RPAI Pelham Manor, LLC v. Two Twenty Four Enters., LLC, 144 AD3d 1125: Recite ejectment elements (ownership, immediate right to possession, and occupant’s possession). Helped structure the court’s analysis of why ejectment failed here.
9 NYCRR 2524.2(a),(b) and 2524.3(a); Domen Holding Co. v. Aranovich, 1 NY3d 117: Establish that rent-stabilized tenancies require statutory pre-termination procedures and grounds. The landlord’s failure to show service of these notices was fatal to ejectment and related damages.
1537 Assoc. v. Temlex Indus., 128 AD2d 384; RPAPL 601: Make clear that damages for rents and profits are tethered to a viable ejectment claim. Without entitlement to possession, those damages are unavailable.
Nestor v. McDowell, 81 NY2d 410: Cited for rejecting lease-based attorney’s fees under the circumstances, reflecting judicial caution in awarding fees in regulated-housing disputes absent a solid contractual or statutory basis.
US Bank N.A. v. Murillo, 171 AD3d 984; Fenton v. Floce Holdings, LLC, 229 AD3d 768; Bhatara v. Kolaj, 222 AD3d 927; Kyung Hee Moon v. Owadeyah, 223 AD3d 793: Articulate the liberal amendment standard and its limits (no prejudice, and proposed amendments must be non-frivolous). Applied to deny leave where the proposed claim effectively sought a mandatory injunction.
Matos v. City of New York, 21 AD3d 936; Shake Shack Fulton St. Brooklyn, LLC v. Allied Prop. Group, LLC, 177 AD3d 924: Emphasize that mandatory injunctions are extraordinary and rarely granted; used to characterize and reject the proposed amendment.

Legal Reasoning

Use and Occupancy under RPL § 220. The court reaffirmed that in the absence of rent payments, a landlord can recover the reasonable value of the occupant’s use of the premises. The evidentiary record was straightforward:

Continuous occupancy since 2005.
No rent or use and occupancy paid since July 31, 2006.
A DHCR order (March 19, 2021) setting the legal regulated rent at $2,490 per month.
Stipulated DHCR registration of the apartment in 2021 at that rent.

The court reasoned that the DHCR order and registration supplied a reliable and objective measure of the “reasonable value” for RPL § 220 purposes. Because the tenants offered no triable contrary evidence, summary judgment was proper. The court identified that the record supported an award back to September 29, 2010, but granted relief from October 1, 2010, because the landlord limited her request to that date. This timing aligns with the six-year statute of limitations governing quasi-contract claims, the typical classification for use and occupancy claims.

Ejectment and RPAPL § 601. The court reiterated that to obtain ejectment, a landlord must show a present right to possession. In the rent-stabilized context, that right arises only after strict compliance with the Rent Stabilization Code’s notice regime (notice to cure, and notice of termination on a recognized ground). The landlord neither alleged nor proved service of the required notices; accordingly, she lacked an immediate right to possession, defeating both ejectment and RPAPL § 601 damages (which ride with ejectment).

Civil Contempt. The 2019 appellate decision instructed the Supreme Court to determine a pendente lite use-and-occupancy rate and a bond (undertaking) amount. It did not direct the tenants to pay a specified sum or post a bond by a certain date. Without a clear, unequivocal mandate that was violated, the elements of civil contempt were not satisfied.

Leave to Amend. The proposed amendment sought a declaration that the landlord’s proffered lease complied with rent-stabilization law and, functionally, to compel the tenants to execute that lease. The court treated this as a request for a mandatory injunction—an extraordinary remedy disfavored absent exceptional need. Because the proposed claim was palpably insufficient and would in effect compel performance, leave to amend was properly denied.

Impact and Forward-Looking Implications

Measure of Use and Occupancy. In regulated housing disputes, a later-issued DHCR legal rent order can anchor the calculation of use and occupancy awards, including retroactive awards within the limitations period. This significantly streamlines proof for landlords and may hasten summary judgment where DHCR action has clarified the rent.
Strategy for Claims. Counsel should explicitly plead use and occupancy from the earliest date available under the statute of limitations; the court here noted it could have awarded amounts starting days earlier but was bound by the plaintiff’s narrower request.
Separate Tracks for Money and Possession. Even when ejectment is unavailable due to notice defects, landlords can still obtain substantial monetary relief via RPL § 220. Conversely, tenants remain protected against displacement unless and until the landlord strictly follows the Rent Stabilization Code’s pre-termination procedures.
Contempt Caution. Practitioners should avoid contempt applications predicated on remittitur instructions or non-specific orders. A contempt remedy requires a clear command and a clear violation.
Mandatory Injunctions. Attempts to compel tenants to execute a particular lease form through declaratory relief will likely be treated as requests for mandatory injunctions—facing a high threshold and vulnerable to denial at the pleading stage if framed as an amendment.
Administration-Litigation Synergy. The decision underscores the practical synergy between DHCR administrative determinations and civil litigation remedies: administrative findings can be outcome-determinative evidence in court, especially for monetary relief.

Complex Concepts Simplified

Use and Occupancy (RPL § 220): A court-awarded, fair-value payment for occupying property when no rent is being paid or no executable rent agreement is in effect. It is not “rent” per se but compensation for use.
Legal Regulated Rent (DHCR): In rent-stabilized apartments, DHCR can fix the lawful monthly rent. Courts can use this amount as an objective measure of the reasonable value of use and occupancy.
Pendente Lite: A temporary measure ordered while a lawsuit is pending (e.g., interim use and occupancy payments or bonds to secure past amounts).
Undertaking: A bond or security posted to protect the opposing party from potential losses if the court later awards damages.
Summary Judgment: A procedural device to decide claims without trial where no material facts are disputed and the moving party is entitled to judgment as a matter of law.
Civil Contempt: A sanction for violating a clear court order, requiring proof of a specific command, knowledge of that command, a violation, and prejudice to the movant.
Ejectment: A lawsuit to recover possession of real property. In regulated tenancies, it cannot proceed unless statutory pre-termination notices and grounds are satisfied.
Mandatory Injunction: A court order compelling a party to take action (e.g., execute a lease). Such relief is extraordinary and rarely granted, especially at early stages or by way of amendment that lacks merit.

Practice Pointers

For landlords:
- When DHCR sets a legal rent, promptly register and preserve all documentation; this can support summary judgment for use and occupancy.
- Plead use and occupancy from the earliest date permitted by the statute of limitations; do not leave recoverable periods on the table.
- Before pursuing ejectment in a rent-stabilized unit, ensure strict compliance with 9 NYCRR 2524.2 and 2524.3 (notice to cure and notice of termination on cognizable grounds) and retain proof of service.
- Avoid contempt applications unless the order is explicit, specific, and has been violated.
For tenants:
- Recognition of rent-stabilized status does not immunize against monetary liability for past occupancy; DHCR-determined rent can be used to calculate sizeable awards.
- Meticulous attention to notice requirements remains a powerful defense against ejectment.
For litigators:
- Use administrative orders strategically to resolve the “reasonable value” element of RPL § 220 claims.
- Be cautious in seeking declaratory relief that effectively compels performance; courts will scrutinize such claims as mandatory injunction requests.

What the Court Did Not Decide

The decision does not calculate the final dollar sum owed; it remits for the trial court to enter a judgment reflecting $2,490 per month from October 1, 2010, to November 29, 2022. Issues such as the treatment of partial months or any interest are not discussed in this opinion.
The tenants’ counterclaim for attorneys’ fees under Real Property Law § 234 is referenced as having been asserted, but this opinion does not resolve that counterclaim.

Conclusion

Esposito v. Larig clarifies two pivotal points in New York housing litigation. First, a DHCR order establishing the legal regulated rent can be used as the yardstick for calculating use and occupancy under RPL § 220, supporting retroactive monetary relief within the limitations period and permitting summary judgment when the facts are undisputed. Second, landlords seeking ejectment in rent-stabilized housing must strictly comply with the Rent Stabilization Code’s pre-termination notice requirements; without those notices, immediate possession and tethered damages under RPAPL § 601 cannot be awarded.

The decision reinforces the divide between monetary remedies for past occupancy and the procedural rigor required to recover possession. It also cautions against overreaching contempt applications and underscores the high bar for mandatory injunctive relief, especially when presented through late-stage pleading amendments. In the broader legal landscape, Esposito promotes the use of administrative determinations to resolve valuation disputes while preserving the procedural protections embedded in the rent-stabilization framework.