Landlord & Tenant

Fact of PHFL Conversion Does Not Constitute Unique and Peculiar Circumstance

Columbus 95th Street LLC v. New York State Division of Housing And Community Renewal

NYLJ 12/4/09, p. 39, col. 5

Supreme Ct., N.Y. Cty.

(Schlesinger, J.)

Landlord brought a proceeding to compel DHCR to determine its applications for rent increases pursuant to the law and regulations in effect at the time the applications were filed. The court granted the petition to the extent of requiring DHCR to determine the applications, but held that DHCR was entitled to apply the code as amended after landlord filed its applications.

Until 2006, the subject building was subject to article II of the Private Housing Finance Law (PHFL). Pursuant to the provisions of the PHFL, the limited housing company that had owned the building was dissolved, and the apartments became subject to rent stabilization by virtue of the Emergency Tenant Protection Act (ETPA). Rents were set at the level of the last rent charged pursuant to the PHFL. Landlord then applied to DHCR to increase the rents of the various apartments based on “unique or peculiar” circumstances (RSL section 26-513(a)). While landlord's application was pending, DHCR amended the Rent Stabilization Code to provide that previous regulation under the PHFL “shall not, in and of itself, constitute a unique and peculiar circumstance within the meaning of this subsection.” While the amendment was pending, landlord brought this proceeding to compel DHCR to determine its applications under the law enacted at the time of filing. After DHCR amended the code, landlord amended its provision to assert, in addition, that the amendment was invalid on a number of grounds.

In rejecting landlord's position, the court held that the Court of Appeals decision in KSLM-Columbus Apartments, Inc. v. DHCR, 5 NY3d 303, did not guarantee a landlord, upon exit from the PHFL, an automatic entitlement to a “unique and peculiar” circumstances rent increase. As a result, DHCR's amendment did not contravene the KSLM decision. The court then held that the amendment did not exceed DHCR's rulemaking authority, and noted that typically, the law to be applied to an application is the law in effect at the time of the decision. As a result, DHCR would be entitled to apply the amendment to landlord's pending applications.

Fact of PHFL Conversion Does Not Constitute Unique and Peculiar Circumstance

Columbus 95th Street LLC v. New York State Division of Housing And Community Renewal

NYLJ 12/4/09, p. 39, col. 5

Supreme Ct., N.Y. Cty.

(Schlesinger, J.)

Landlord brought a proceeding to compel DHCR to determine its applications for rent increases pursuant to the law and regulations in effect at the time the applications were filed. The court granted the petition to the extent of requiring DHCR to determine the applications, but held that DHCR was entitled to apply the code as amended after landlord filed its applications.

Until 2006, the subject building was subject to article II of the Private Housing Finance Law (PHFL). Pursuant to the provisions of the PHFL, the limited housing company that had owned the building was dissolved, and the apartments became subject to rent stabilization by virtue of the Emergency Tenant Protection Act (ETPA). Rents were set at the level of the last rent charged pursuant to the PHFL. Landlord then applied to DHCR to increase the rents of the various apartments based on “unique or peculiar” circumstances (RSL section 26-513(a)). While landlord's application was pending, DHCR amended the Rent Stabilization Code to provide that previous regulation under the PHFL “shall not, in and of itself, constitute a unique and peculiar circumstance within the meaning of this subsection.” While the amendment was pending, landlord brought this proceeding to compel DHCR to determine its applications under the law enacted at the time of filing. After DHCR amended the code, landlord amended its provision to assert, in addition, that the amendment was invalid on a number of grounds.

In rejecting landlord's position, the court held that the Court of Appeals decision in KSLM-Columbus Apartments, Inc. v. DHCR , 5 NY3d 303, did not guarantee a landlord, upon exit from the PHFL, an automatic entitlement to a “unique and peculiar” circumstances rent increase. As a result, DHCR's amendment did not contravene the KSLM decision. The court then held that the amendment did not exceed DHCR's rulemaking authority, and noted that typically, the law to be applied to an application is the law in effect at the time of the decision. As a result, DHCR would be entitled to apply the amendment to landlord's pending applications.