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Can an Owner Recover an Entire Building for Personal Use?

BY Stewart E. Sterk
April 27, 2006

New York City's rent stabilization law has long permitted a building's owner to recover possession of an apartment when the owner seeks to use the apartment as a primary residence for himself or members of his immediate family. Suppose, however, an owner seeks to convert an entire apartment building to single-family use. May the owner refuse to renew the leases of multiple rent-stabilized tenants? In a decision certain to be appealed, a Manhattan Supreme Court justice has held that the answer is no ' unless the landlord seeks and obtains approval from the Division of Housing and Community Renewal (DHCR).

The Pultz Case

In Pultz v. Economakis (NYLJ 3/21/06, p. 19, col. 3), the landlords owned a 5-story, 15-unit tenement on East Third Street in Manhattan. They recovered five of the units, and then served notices of non-renewal on the remaining tenants, alleging that they planned to devote the entire building to their personal use as a private residence. The tenants responded by bringing an action for a judgment declaring that the landlords' plan to recover the entire building for personal use violates the Rent Stabilization Law and Code. Last June, a Supreme Court justice granted tenants a preliminary injunction. Pultz v. Economakis, 8 Misc2d 1022A. In the most recent development in the case, another Supreme Court justice denied landlords' summary judgment motion, holding that landlords' attempt to recover possession of the entire building was governed by section 2524.5 of the Rent Stabilization Code, which requires approval of DHCR before a landlord withdraws units from the rental market, rather than section 2524.4, which enumerates grounds for refusal to renew leases without order of the DHCR.

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