Can Landlord Withdraw Building from the Rental Market?

Landlord asked the DHCR for permission to terminate the tenancy of the building's last rent-stabilized tenant in order to convert the entire building into a commercial premises to be used by a business that landlord owns. The DRA ruled against landlord, who appealed and lost. In its PAR decision, the DHCR said that landlord failed to submit DOB-approved plans or proof that it had funds in the bank earmarked for the proposed project. Landlord then filed an Article 78 court petition, claiming that the DHCR's decision was arbitrary and capricious because the DHCR failed to conduct a hearing. The court agreed and sent the case back to the DHCR. In connection with withdrawal of housing accommodations from the rental market, RSC Section 2524.5(a)(1)(i) includes a requirement that the DHCR hold a hearing in connection with landlord's type of application. Even if the DHCR reaches the same decision, a hearing must be held. The DHCR incorrectly argued that a hearing was only to be held at the DHCR's discretion.

351 Canal St. LLC v. DHCR: Index No.152314/2022, 2022 NY Slip Op 34156(I)(Sup. Ct. NY; 12/8/22; Perry, J)