Court Revokes DHCR Approval of Landlord's Application to Modify Courtyard

In 1991, prior landlord of an apartment complex completely paved over most of a large courtyard area--which had contained grass, trees, benches, an ornamental fountain, play area, and other amenities--for parking spaces without DHCR permission. In response to complaints by rent-stabilized tenants, the DHCR reduced and froze rents, and ordered the restoration of services. Landlord never complied with that order and rent reductions remain in place to date.

But, starting in 2008, landlord filed several DHCR applications, seeking approval to modify services. The DHCR denied the first two applications and courts upheld the DHCR rulings, while noting that landlord could refile a service modification application.

Landlord then filed a third set of applications seeking permission to modify the courtyard by constructing an underground garage with a recreational area above. The application included a proposal for a permanent rent reduction for the decrease in the recreational area. Tenants objected, arguing that landlord's new plan was worse than prior plans and that the project would involve an extended period of loud, vibration-filled construction that further reduced required services. The DRA ruled for landlord and ordered a rent reduction of 3.7 percent of tenants' rents. The DHCR denied tenants' PAR of the service modification approval.

Tenants filed an Article 78 court appeal, arguing that landlord's plan for the destruction of required courtyard services would disturb the tenants' quiet enjoyment of their apartments, was inconsistent with the Rent Stabilization Law and Code, and that the DHCR's ruling was contradicted by the agency's record and factual findings.

The court ruled for tenants and vacated the DHCR's approval of landlord's current application to modify or reduce courtyard services. The DHCR's order allowed landlord to decrease services when landlord neglected its obligation to restore the services for two decades. And the DHCR's approval of a plan that would result in a significant reduction in the quality of life for the tenants, as well as the quiet enjoyment of their units for two or more years, was inconsistent with the RSL and RSC. 

Riverside Tenants Assn v. DHCR: Index No. 518444/19, 2021 NY Slip Op 50204(U)(Sup. Ct. Kings; 3/8/21; Fisher, J)