Appeals Court Rejects Landlord Challenge to HSTPA Amendments Limiting IAI Rent Hikes

Landlord sued the DHCR, claiming that the agency's post-HSTPA policies and procedures concerning individual apartment improvement (IAI) rent increases were improper. After HSTPA was enacted, landlords were required to file a Notification Form, related before-and-after photographs, and a tenant's informed consent form, for work done in occupied apartments. Landlord had bought the building in 2014, hired a contractor, and filed permits with DOB in early 2019 to perform building interior renovations. The court granted the DHCR's request to dismiss the case, finding that landlord didn't have a vested interest in the pre-HSTPA IAI rent increase formula, in effect until June 14, 2019, and it wouldn't suffer a "hardship" from the court's refusal to entertain its challenge to Rent Stabilization Law Section 26-511(c)(13). (See LVT #31826). The court found that the case wasn't ripe and dismissed landlord's claim that the new policies were unconstitutional. 

Landlord appealed and lost. The appeals court agreed with the lower court that landlord lacked vested rights in the pre-HSTPA rent laws governing IAIs because it had begun apartment renovation work two weeks before the effective date of the HSTPA amendments that substantially restricted IAI rent increases. The appeals court also found that the landlord's IAI rent increase claims weren't ripe since they were fact-based claims without a determination of what IAI work actually was done or qualified for a rent increase. The record also didn't establish that landlord had an actual, concrete injury as a result of the enactment of the HSTPA amendments or that a hardship would result if the court denied landlord's claim. The appeals court also denied landlord's claim that the HSTPA amendments were unconstitutional since they would deprive landlord of an economic benefit.

300 Wadsworth LLC v. DHCR: 2022 NY Slip Op 06311 (App. Div. 1 Dept.; 11/10/22; Renwick, JP, Oing, Singh, Kennedy, Mendez, JJ)