Building Rehabbed Under HODAG Program Is Rent Stabilized

Landlord sued to evict tenant for nonpayment of rent. Landlord claimed that the building and rent amount was regulated through an agreement among landlord, HUD, and HPD. The building had been substantially rehabilitated 20 years earlier through federal funding under the Housing Development Grant Program (HODAG). Tenant claimed that the building was rent stabilized and that landlord was overcharging him. He asked the court to dismiss the case.
The court ruled for tenant. The HODAG program no longer existed and was merely a financing program. It had no effect on the building's rent-stabilization status. Rent Stabilization Code Section 2520.11 exempts apartments supervised by HPD only where the federal rule is inconsistent with the Rent Stabilization Code's rent scheme. HODAG's rent-setting scheme wasn't inconsistent with rent stabilization. And DHCR Advisory Opinion 91-1 provides guidance on multi-tier rent orders where, as here, rents are adjusted periodically by means other than guidelines board orders due to funding from federal programs including HODAG. The case was dismissed because landlord misstated the regulatory status of the building and the amount of rent due.

B&L Concourse Housing Assoc. v. Elliot: NYLJ, 10/28/09, p. 28, col. 1 (Civ. Ct. Bronx; Saunders, J)