Constructively Occupied Apartments Not Exempt from ETPA

Facts: In 1995, a fire severely damaged landlord's building. The town ordered tenants to move out because the build- ing was hazardous. The DHCR later ruled that tenants who paid $1 per month in rent during renovation of the building constructively occupied their apartments and would be reinstated into possession of their apartments after the building renovations were complete. Landlord substantially rehabilitated the building and asked the DHCR to exempt the building, including the ''constructively occupied'' apartments, from ETPA. The DHCR refused. Landlord then challenged the DHCR's ruling in court, arguing that it was unreasonable. Court: Landlord loses. The DHCR reasonably determined that tenants who constructively occupied their apartments during the renovations remained rent stabilized. But landlord could collect MCI rent hikes from these tenants, capped at 15 percent per year, for the renovations it made.

Ecco Land Corp. v. DHCR: NYLJ, 11/1/04, p. 35, col. 6 (App. Div. 2 Dept.; Santucci, JP, Adams, Mastro, Spolzino, JJ)