EPTA Covers Former Mitchell-Lama Building

Facts: Landlord built and financed a Mitchell-Lama housing complex prior to 1969. When the complex was withdrawn from Mitchell-Lama more than 20 years later, the DHCR ruled that the complex became subject to rent stabilization under the Rent Stabilization Law of 1969 (RSL), rather than the ETPA of 1974. Landlord appealed, arguing that the DHCR's decision was unreasonable. The court ruled against landlord, and landlord appealed again. Court: Landlord wins. The building complex became subject to rent stabilization under ETPA, not the RSL. The Mitchell-Lama complex was made specifically exempt from the RSL in 1969. So, after leaving the Mitchell-Lama program, the building became rent stabilized under the ETPA. The rules for setting tenants' first rents under stabilization were more flexible under the ETPA and allowed for consideration of unique and peculiar circumstances. Otherwise, under the RSL, landlord could charge tenants only the rent in effect when the Mitchell-Lama regulation ended.

KSLM-Columbus Apts., Inc. v. DHCR: NYLJ, 3/3/04, p. 18, col. 1 (App. Div. 1 Dept.; Nardelli, JP, Mazzarelli, Sullivan, Rosenberger, Lerner, JJ)