Landlord Didn't Prove Substantial Rehabilitation

Landlord sued to evict tenants and stated that the building was unregulated. Tenants argued that they were rent stabilized. Landlord claimed that the building was exempt from rent regulation because of substantial rehabilitation after Jan. 1, 1974. The court ruled for tenants and dismissed the case. Landlord appealed and contested the award of attorney's fees to tenants. The appeals court ruled against landlord. Landlord didn't prove that at least 75 percent of the building-wide and apartment systems had been completely replaced. This is the standard required in DHCR Operational Bulletin 95-2, which has been upheld as valid by an appeals court. Landlord replaced kitchens, bathrooms, and intercoms, but plumbing, heating, and electrical systems weren't materially changed. The roof, fire escapes, interior stairways, and most of the floors weren't replaced, and only portions of the apartment ceilings and plastered surfaces were replaced. Landlord also didn't show that the building was in substandard or seriously deteriorated condition when the work was done. And since the main issue in the case was whether the building had been substantially rehabilitated, tenants were the prevailing parties and were entitled to attorney's fees.

Cassorla v. Foster: NYLJ, 3/8/04, p. 25, col. 3 (App. T. 1 Dept.; Davis, JP, Gangel-Jacob, Schoenfeld, JJ)