Adobe Stock / Andrew Bayda

The New York Court of Appeals has ruled that landlords acted properly in raising rents when they converted thousands of regulated apartments to market-rate units, Wall Street Journal staffer Josh Barbanel reports.

Previously, an appellate court ruling challenged the process landlords and state regulators had followed for many years in deregulating apartments with high rents, Barbanel writes. The unanimous decision last week overturns that ruling.

The law allows the deregulation of vacant regulated apartments when rents exceed a threshold—for many years that was $2,000 a month, but it currently is $2,733 a month.

The lower court had said landlords should use the final rent paid by the previous tenant to calculate the rent of regulated units, but landlords instead typically added up to 20%—the amount allowed after a vacancy—and the costs of renovations to the rent.

The case “had the potential to completely upend the city’s residential market,” said lawyer Jeffrey Turkel of Rosenberg & Estis, who argued the appeal on behalf of the landlord.

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