Landlord Can Evict Tenant to Demolish Building

Facts: Landlord applied for permission to demolish a rent-stabilized building that had one remaining tenant. The DHCR ruled for landlord. Tenant appealed, claiming that the DHCR's decision was arbitrary and unreasonable because the work landlord planned to do wasn't a full demolition and therefore shouldn't qualify for the DHCR's approval.

In response to tenant's appeal, the court ordered the DHCR to take the case back for further review. Landlord then appealed. The DHCR said that it now agreed that it should review the case further and that its initial ruling was improper. Landlord argued that the DHCR had properly ruled the first time that the gut work to the four-story building proposed by landlord qualified as a demolition. Landlord's application sought to remove much of the building facade, rear wall, roof, and entire interior of the building.

The appeals court ruled for landlord. The court said that the DHCR was simply seeking a second chance to reach a different decision, without sufficient reason. Tenant then appealed to New York's highest court.

Court: Tenant loses. The DHCR already properly considered and denied tenant's petition to challenge landlord's demolition plans. Tenant argued that the DHCR didn't define "demolition" as opposed to "renovation." Rent-stabilized tenants can be evicted legally for demolition but not for building renovations. The court found that tenant didn't raise this argument before the DHCR and therefore couldn't do so in his court appeals. The court also ruled that the DHCR's decision was reasonable, and it didn't matter that there was no precise definition of demolition in the Rent Stabilization Law or Code. The DHCR has made it clear that landlord need not raze a structure for it to be considered demolished. Gutting the interior while leaving the outside walls standing has been found to constitute demolition.

Peckham v. Calogero: NYLJ, 5/6/09, p. 28, col. 5 (Ct. App.; Jones, J, Lippman, CJ, Ciparick, Graffeo, Read, Smith, Pigott, JJ)