Landlord Didn't Prove It Would Use Entire Structure for Business Expansion

Facts: Landlord owned two adjacent, four-story buildings that contained a total of eight rent-controlled apartments. Most of the apartments were above the second floor. Landlord ran a hardware store on the first floor. Landlord claimed that it needed both of the buildings vacant so that it could expand its hardware business. It had closed its warehouse, and competition from larger chain stores made a bigger store necessary to compete. Landlord asked for permission to evict rent-controlled tenants to recover the buildings for its business purpose. The DRA ruled against landlord, and landlord appealed. DHCR: Landlord loses. The city's Zoning Law permitted expansion of landlord's business only to the second floor of the buildings. Although landlord claimed that it needed to empty the entire buildings in order to achieve its business purpose, the applicable rent-control regulation states that landlord must prove that it ''requires the entire structure'' in connection with its business. Since landlord could expand only to the second floor anyway, it couldn't say that it required both entire buildings.

Simon's Hardware: DHCR Adm. Rev. Dckt. No. DG420221RO (7/29/99) [4-pg. doc.]