Substantially Rehabbed Building Was Exempt From Rent Stabilization

Landlord asked the DHCR in 2017 for a ruling on whether its building was exempt from rent regulation due to substantial rehabilitation. Landlord stated that the building was vacant when the rehab began, and that the building was gut-renovated by a prior landlord between November 2005 and April 2007.

The DRA ruled for landlord, finding that the building was in substandard condition, or at least 80 percent vacant, when the reno work began, that no prior tenants returned after the work was done, and there was no proof that the prior tenants had been harassed. DOB records showed that the prior landlord had obtained DOB approval for work done. DHCR inspection confirmed that 75 percent of the building and apartment systems had been replaced.

Tenants appealed and lost, then filed an Article 78 court petition against the DHCR's decision. The case was sent back to the DHCR for further consideration.

The DHCR again ruled against tenants, only one of whom remained in the building at this point. That tenant moved into the building in 2014, seven years after the substantial rehab was completed. So she was not subject to rent stabilization. Landlord wasn't required to obtain a new Certificate of Occupancy after the work was completed, and did obtain a DOB Letter of Completion. There was no proof submitted that landlord and/or prior landlord harassed former tenants to move out. 

Ledesma: DHCR Adm. Rev. Docket No. JR210007RP (11/3/21)[12-pg. document]