Court: Lease Commencement Date, Not Execution Date, Determines If Vacancy Deregulation Applies

When the Housing Stability and Tenant Protection Act of 2019 (HSTPA) took effect on June 14, 2019, the law prospectively repealed high-rent vacancy deregulation. Since then, courts and the DHCR repeatedly have ruled that, if an apartment was permanently exempt from rent-stabilization due to high-rent vacancy deregulation prior to enactment of the HSTPA, the apartment remained so under the HSTPA.

However, the HSTPA triggered immediate questions as to what effect the end of high-rent vacancy deregulation had on vacancy leases whose term commenced on or after June 14, 2019 even though the lease had been signed while vacancy deregulation was still in effect.

This question recently reached the First Department appeals court, which ruled in Laspina v. 340 E. 198th St. LLC that, where a rent-stabilized vacancy lease was signed by a landlord and tenant on May 31, 2019 but the lease term commenced on June 14, 2019, the apartment was not subject to high-rent vacancy deregulation “because the ‘effective date’ of a lease is the date the tenancy commences, not the date on which the lease was executed.” The court noted that applying the HSTPA in this manner didn’t constitute a retroactive application of the law since the operative commencement date occurred on the same day that the HSTPA became effective.

The court also held that, even if the landlord satisfied the conditions for high-rent vacancy deregulation by making individual apartment improvements (IAIs) prior to the HSTPA’s enactment date, “the claimed IAIs related rent increases did not become effective or collectible on the lease until its commencement on June 14, 2019” in accordance with DHCR Operational Bulletins [Index No. 803131/24, App. No. 6902, Case No. 2025-08087, 2026 NY Slip Op 03757, LVT #34235 (App. Div. 1 Dept.; 6/16/26)].