New Landlords Can't Convert SRO for Owner Occupancy

New landlords bought SRO building with the intent of converting it for owner occupancy to a single-family home. After they took title, they found out that a prior vacate order issued by HPD hadn't been cured. So they couldn't obtain a certificate of no harassment and, therefore, couldn't get permits to convert the building. Landlords were previously unaware of the vacate order or the need for a certificate of no harassment. Landlords sued the City of New York for negligence, and for breach of a duty to act on landlords' behalf. They also sued their attorney for malpractice. The court ruled that landlords had a claim against their attorney but dismissed the case against HPD. Landlords appealed and lost. There was no proof that the city owed landlords a duty to serve, file, or publish the vacate order. Landlords didn't own the building at the time the vacate order was issued, and the city complied with procedures in place at that time. There also was no proof that HPD had a duty to act on their behalf or that HPD's agents knew that inaction would harm them. Landlords' additional claim that the city illegally denied them a building permit was also properly dismissed because the city's decision to issue a permit is discretionary and not subject to litigation.

Seradilla v. Lords Corporation: NYLJ, 4/10/08, p. 31, col. 5 (App. Div. 1 Dept.; Tom, JP, Saxe, Nardelli, Williams, JJ)