Substantial Alteration of Building with Rent-Controlled Tenant

Landlord's building was substantially altered in 1991 from a five-unit to a three-unit building. One apartment was owner-occupied, one deregulated, and one rent-controlled. Landlord wished to evict rent-controlled tenant based on the substantial alteration of the building and asked the DHCR if he qualified for the exemption from the relocation requirements of the law now that his net annual return for the building was less than 8.5 percent. Under the Rent Regulation Reform Act of 1997, landlords are exempt from the relocation requirement when there is one occupied apartment in a building containing 10 or fewer apartments. In an opinion letter, the DHCR said no. ''One occupied apartment'' didn't mean one rent-controlled apartment. The DHCR interpreted the law to include all occupied apartments. Since there were three occupied apartments in landlord's building, landlord didn't qualify for the exemption.

DHCR Opin. Ltr. by Charles Goldstein (10/30/97) [3-pg. doc.]