Building Ruled Exempt from Stabilization Years After Rehab

Landlord sought a ruling from the DHCR that its building was exempt from rent stabilization. The DRA ruled for landlord, finding that the building had been substantially rehabilitated after Jan. 1, 1974. Tenants appealed, claiming there was insufficient proof that landlord replaced at least 75 percent of building-wide systems. The DHCR ruled against tenants. Landlord showed that the building was in substandard or seriously deteriorated condition when it bought the building in 1984. Landlord also showed that the required number of building systems were replaced. Landlord's architect submitted an affidavit to the DHCR that in 1986, she found the building had one store and six vacant, partly demolished apartments. Landlord filed an altered building application in 1988 and got a Certificate of Occupancy in 1989. Although landlord's application to DOB included a "tenant safety plan," there was no other proof that the building was occupied. Documents showed that landlord replaced an oil-burning boiler with a gas burner; created new kitchens in connection with new gas lines; replaced ceilings, walls, and floors in common areas of the building; installed new staircases; and replaced hallway walls. Landlord's architect also stated that a new roof was installed. Fire escapes also were extended to reach newly created apartments. Two long-term tenants admitted that, when they moved in, the common areas and apartment interiors were new. It didn't matter that landlord waited a long time to seek a ruling from the DHCR. There was no time limit for doing so. It also didn't matter if landlord treated tenants as rent stabilized because they weren't regulated as a matter of law. None of the apartments was ever registered with the DHCR, and no tenant filed an overcharge complaint until 2005.

9 Units - 170 West 25th Street: DHCR Adm. Rev. Docket No. VB410052RT (11/19/07) [7-pg. doc.]