No Substantial Rehab If No Housing Units Added
LVT Number: 8176
Facts: Landlord sued to evict tenant for nonpayment of rent. Tenant claimed that the building was rent stabilized; landlord argued that it wasn't. Landlord had renovated the building before tenant moved in. Previously, the building contained one store and six apartments. It was vacant when landlord bought it in 1988. Landlord then filed an altered building application to make certain renovations, stating that the estimated cost of the renovations was $71,400. There was no plan to increase the building's square footage. Landlord claimed that, in fact, it had spent $275,000 in renovations and that the building had been fully gutted. Landlord's plans didn't show as much work as landlord claimed, but there was substantial renovation. There were now two duplex apartments where the store had been, but there was still a total of six apartments.Court: Landlord loses. For destabilization, landlord must substantially rehabilitate the building---not the apartments within it. The basic purpose of the law is to give landlords an incentive to increase the number of Class A dwelling units. Cost alone isn't conclusive, and the work must be necessary in order to repair substandard housing. Landlord's renovation didn't add housing units, event though the building was vacant when bought. There was no indication of a long-term vacancy, and no outstanding building violations. The number of apartments remained the same, even though they were reconfigured. The building was also primarily residential, both before and after the rehab. Landlord could also recover its rehabilitation costs through rent increases permitted under rent stabilization.
81 Russell Street Associates v. Scott: NYLJ, p. 24, col. 2 (8/25/93) (Civ. Ct. Kings; Rivera, CJ)