Landlord Didn't Prove Building Was in Substandard Condition

Landlord applied to the DHCR in 2018 for a determination that its building had been substantially rehabilitated and therefore was exempt from rent stabilization. The DHCR ruled against landlord, who then filed an Article 78 court appeal.

The court ruled against landlord. Even if there is no question that landlord performed sufficient rehabilitation work to building systems to qualify as a sub rehab, Rent Stabilization Section 22520.11(e)(3) and DHCR Operational Bulletin 95-2 also require that, as a threshold matter, landlord must prove that the rehab was commenced in a building that was in substandard or seriously deteriorated condition. The DHCR rationally determined that landlord didn't meet this requirement since DOB violation records indicated that two or three of the building's six apartments were occupied during the renovations. The DHCR's finding that landlord failed to submit sufficient proof that the building was in poor condition when work began was neither arbitrary nor capricious, and was rationally based.

SH Harman LLC v. DHCR: Index No. 505537/21, 2021 NY Slip Op 32205(U)(Sup. Ct. Kings; 11/4/21; Joseph, J)