HSTPA Caps Renewal Rent for Successor Tenants When Renewal Offer Occurs After June 14, 2019, Despite Prior DHCR-Approved Preferential-Rent Settlement

1. Introduction

Matter of West Side Marquis LLC v. Maldonado (Appellate Division, First Department, Feb. 24, 2026) addresses how the Housing Stability and Tenant Protection Act of 2019 (HSTPA) applies to a rent-stabilized tenant who succeeded to a family member’s tenancy but was not timely offered a renewal lease.

The building left the Mitchell-Lama program in 2005 and became rent-stabilized. In 2006, the prior landlord and certain tenants entered into a DHCR-ratified settlement (the “WSM Agreement”), establishing an “actual collectible rent” (ACR), i.e., a preferential rent, for signatory tenants and some qualifying successors. Respondent Carlos Maldonado lived with his grandmother (the tenant of record) since 1988; she later renewed a lease reflecting both a legal regulated rent and an ACR. After her death in 2016, Civil Court (2018) recognized Maldonado as the lawful successor and entitled to a renewal lease, but the landlord did not offer him a renewal until November 2019—after the HSTPA’s June 14, 2019 effective date.

Core issue: Whether, given the landlord’s delayed renewal offer, the HSTPA’s preferential-rent protections under Rent Stabilization Law (RSL) § 26-511(c)(14) required the landlord to renew at (essentially) the prior rent actually paid under the grandmother’s last lease terms, rather than reverting to the higher legal regulated rent.

2. Summary of the Opinion

The First Department reversed the Appellate Term and granted the tenant’s cross-motion for summary judgment dismissing the petition. It held that because the landlord failed to timely offer a renewal lease, the tenant’s rights under the expiring lease continued until a renewal was actually offered. Since the landlord’s renewal offer occurred after the HSTPA took effect, the HSTPA applied, limiting what could be charged on renewal to no more than the rent previously charged and paid, with only lawful adjustments.

The Court further rejected the landlord’s attempt to treat the reversion from ACR to legal regulated rent (based on a DHCR order incorporating the WSM Agreement) as an “increase[] authorized by law” within RSL § 26-511(c)(14). A DHCR order is an administrative determination, not “statute law,” and thus did not qualify. The Court also found no impermissible retroactivity and no preclusive effect from the prior DHCR proceeding.

3. Analysis

3.1 Precedents Cited

  • 24 Fifth Ave. Assoc. v New York State Div. of Hous. and Community Renewal, 191 AD2d 331, 331 (1st Dept 1993), lv denied 82 NY2d 652 (1993)
    Role in this case: The Court used this decision to support the proposition that when a renewal lease is not timely offered, courts have upheld applying renewal increases only prospectively. This undergirds the holding that the tenant’s rights under the expiring lease continue until a proper renewal is offered; the landlord cannot leverage its own delay to alter the tenant’s rent protections.
  • Matter of West Pierre Assoc. LLC v Harvey, 241 AD3d 413, 413 (1st Dept 2025)
    Role in this case: Cited for the principle that a constitutional retroactivity analysis is unnecessary where the operative lease event occurs after HSTPA’s enactment. Here, because the renewal lease offer was made after June 14, 2019, applying HSTPA was treated as prospective application to post-enactment conduct.
  • Board of Educ. of Union Free School Dist. No. 6 v Town of Greenburgh, 277 NY 193, 195 (1938)
    Role in this case: Provided the interpretive canon that phrases like “allowed by law” typically refer to New York State statutory law unless context demands broader meaning. This supported the Court’s conclusion that an administrative DHCR order is not “statute law” and therefore does not automatically qualify as an “increase[] authorized by law” under RSL § 26-511(c)(14).
  • Matter of KSLM-Columbus Apartments, Inc. v New York State Div. of Hous. and Community Renewal, 5 NY3d 303, 312 (2005)
    Role in this case: Used to reject deference-based arguments: the Court emphasized it is not bound by an agency’s statutory interpretation. Even if DHCR had treated the issue differently in another apartment, the judiciary independently interprets RSL § 26-511(c)(14).
  • Gersten v 56 7th Ave. LLC, 88 AD3d 189, 203 (1st Dept 2011), appeal withdrawn 18 NY3d 954 (2012)
    Role in this case: Cited (as a contrast) regarding when administrative determinations can have preclusive effect. The Court distinguished the 2006 DHCR proceeding (resetting legal regulated rents and ratifying a settlement) from the present question (whether HSTPA prevents disregarding the ACR on renewal). Because the issues were not the same, preclusion doctrines did not apply.
  • Ryan v New York Tel. Co., 62 NY2d 494, 501 (1984)
    Role in this case: Reinforced that collateral estoppel requires a “full and fair opportunity” to litigate. The record did not show Maldonado’s involvement in the 2006 DHCR proceeding, defeating any attempt to bind him to that proceeding’s outcome.

3.2 Legal Reasoning

  1. Continuing effect of the expiring lease when the landlord fails to timely renew. The Court relied on Rent Stabilization Code (9 NYCRR) § 2523.5(d), which provides that a landlord’s failure to offer a renewal lease does not deprive the tenant of RSL/RSC protections and the tenant “shall continue to have the same rights as if the expiring lease were still in effect.” In practical terms, the grandmother’s last renewal lease terms continued to govern the successor tenant’s rights until the landlord finally made a renewal offer.
  2. Timing triggers HSTPA application. Because the landlord’s renewal offer to Maldonado occurred on November 7, 2019—after HSTPA’s effective date—RSL § 26-511(c)(14) applied to the renewal. The Court treated the controlling event as the post-HSTPA renewal offer (and the tenant’s entitlement to receive a renewal at that point), not the earlier (pre-HSTPA) judicial determination that he was a successor.
  3. HSTPA’s cap on renewal rent applies to succession rights. The Court explicitly applied RSL § 26-511(c)(14) to a successor tenant’s renewal, holding that the renewal rent must be “no more than the rent charged to and paid” prior to that renewal, subject only to permissible guideline adjustments and other lawful increases.
  4. Reversion from ACR to legal regulated rent is not an “increase[] authorized by law” when based on a DHCR order/settlement. The landlord argued it could return to the higher legal regulated rent because the ACR was merely preferential and the DHCR Order/WSM Agreement effectively “authorized by law” the higher amount. The Court rejected that construction: under Board of Educ. of Union Free School Dist. No. 6 v Town of Greenburgh, “allowed by law” refers to statute law, while the DHCR Order is an administrative determination. Thus, the landlord could not use that administrative framework to sidestep the HSTPA’s preferential-rent protections at renewal.
  5. No impermissible retroactivity; no preclusion. Applying HSTPA was not retroactive because the renewal offer occurred after enactment (citing Matter of West Pierre Assoc. LLC v Harvey). The landlord also failed to establish administrative finality/res judicata/collateral estoppel based on the 2006 DHCR proceeding, because the issues differed (cf. Gersten v 56 7th Ave. LLC) and, in any event, the tenant lacked a full and fair opportunity to litigate (see Ryan v New York Tel. Co.).

3.3 Impact

The decision strengthens tenant protections in a recurring fact pattern: a landlord delays issuing a renewal after succession (or after a determination of entitlement), then attempts to impose a higher rent once it finally tenders a lease. The Court’s approach makes the landlord’s delay legally consequential: the expiring lease protections persist, and if the renewal offer lands after June 14, 2019, the HSTPA’s cap on preferential-rent withdrawal can apply.

More broadly, the ruling limits landlords’ ability to characterize increases rooted in administrative settlements/orders as “authorized by law” for purposes of RSL § 26-511(c)(14). That framing may affect other buildings with DHCR-supervised restructurings or stipulations that attempted to preserve pathways back to higher legal regulated rents.

4. Complex Concepts Simplified

  • Legal regulated rent vs. preferential rent (ACR). The legal regulated rent is the maximum rent permitted under rent stabilization. A preferential rent is a lower amount the landlord agrees to actually collect. Here, the ACR functioned as a preferential rent for certain tenants under the WSM Agreement as ratified by DHCR.
  • Succession rights. A family member who lived with the rent-stabilized tenant of record may “succeed” to the tenancy when the tenant dies or permanently leaves, becoming entitled to a renewal lease in their own name under rent stabilization rules.
  • HSTPA (RSL § 26-511(c)(14)). After HSTPA, for covered tenants entitled to a renewal, the landlord generally cannot jack up the rent by dropping the preferential rent and reverting to the higher legal regulated rent; the renewal is capped at the rent previously charged and paid, plus only certain lawful increases.
  • Retroactivity. A law is “retroactive” if it changes legal consequences of actions completed before the law existed. The Court treated this case as prospective because the renewal offer—the conduct governed by the statute—occurred after HSTPA’s effective date.
  • Res judicata/collateral estoppel (preclusion) and “full and fair opportunity.” These doctrines can prevent re-litigating issues already decided, but only when the same issue was actually determined and the party to be bound had a genuine chance to litigate it. The Court found those conditions unmet.

5. Conclusion

Matter of West Side Marquis LLC v. Maldonado establishes that when a landlord fails to timely offer a renewal lease to a successor tenant, the expiring lease’s protections and terms continue, and a renewal offer made after June 14, 2019 triggers HSTPA’s restrictions under RSL § 26-511(c)(14). The Court also construes “increases authorized by law” narrowly—excluding reliance on a DHCR order/settlement as a substitute for statutory authorization—and rejects retroactivity and preclusion defenses on these facts. The decision meaningfully deters strategic delay in renewals and reinforces HSTPA’s reach in succession contexts.