DHCR Must Consider Status of Buildings After HPD and HUD Regulatory Status Ended

Landlord asked the DHCR in 2019 for a ruling on the rent-regulatory status of three buildings that it claimed were substantially rehabilitated by the prior building owner in the 1980s. Landlord stated that the rehab work was done under a city redevelopment program supervised by HPD, the buildings had been subject to HPD regulation under the Private Housing Finance Law, and the buildings were subject to HUD regulatory agreements that expired in 2007. The DRA asked landlord to provide clarification letters from HPD explaining its participation and full intent regarding the buildings' regulatory status. When landlord failed to submit anything, the DRA dismissed the application.

Landlord appealed and lost before the DHCR. Landlord then filed an Article 78 petition. Although the DHCR found that the impact of the FHA mortgage pay-off on HUD's regulatory authority under the city and HUD agreements remained unclear, landlord argued that since the FHA mortgage was paid off in 2007, the DHCR should have determined that HUD rent regulation had then lapsed. After that, the DHCR should have ruled that the buildings were exempt from rent stabilization due to the substantial rehab. The parties agreed to send the case back to the DHCR, and the DHCR now ruled that the case must go back to the DRA for further fact-finding. 

968/984/990 Bronx Park South LLC: DHCR Adm. Rev. Docket Nos. KM610002RP, KM610003RP, KM610004RP (3/16/22)[4-pg. document]