HSTPA Limitations on Owner Occupancy Claim Can't Be Applied Retroactively

Landlord sued to evict rent-stabilized tenant, in order to recover tenant's apartment for owner occupancy. The trial court ruled for landlord in 2018. Tenant appealed and won, based on changes in the Rent Stabilization Law made by HSTPA effective June 14, 2019.

The Appellate Term ruled that Rent Stabilization Law Section 26-511(c)(9)(b) now limited recovery of units for owner occupancy to one dwelling unit in a building, required proof of "immediate and compelling necessity," and required landlord to provide an equivalent housing accommodation for any tenant over the age of 62 and in occupancy for 15 years or more. The Appellate Term relied on HSTPA Part I language that the law "shall apply to any tenant in possession at or after the time it takes effect, regardless of whether the landlord's application for an order, refusal to renew a lease or refusal to extend or renew a tenancy took place before this act shall have taken effect."

Landlord then appealed, and the Appellate Division reversed the Appellate Term ruling. In April 2020, NY's highest court ruled in Regina Metro. Co LLC v. DHCR that HSTPA Part F, relating to rent overcharges, couldn't be applied to pending cases because retroactive application of the amended law didn't apply generally with the law on retroactive jurisprudence and denied due process to landlords. The Appellate Division ruled that "the same reasoning applies with equal measure to HSTPA Part I." The amended RSL provisions impaired rights landlords possessed in the past, increasing their liability for past conduct and imposing new duties with respect to transactions already completed. It didn't matter that landlord had spent several years reclaiming all other units at the building. There was no indication that the legislature considered the "harsh and destabilizing effect" on landlord's "settled expectations, much less had a rational justification for that result."

Harris v. Israel: Index No. 570081/19, App. No. 13074, 2021 NY Slip Op 00796 (App. Div. 1 Dept; 2/9/21; Renwick, JP, Kern, Mazzarelli, Oing, JJ)