Landlord Must Pay Tenant Stipends and Relocation Costs

The DHCR directed landlord to pay tenants’ demolition stipends and relocation costs in connection with a building demolition. Landlord filed an Article 78 appeal, claiming that the DHCR’s decision was arbitrary and unreasonable. The court ruled against landlord, who appealed and lost. Landlord bought the building in 2007 when it was already in extremely poor condition, settling unevenly into its foundation and leaning six inches out of plumb. The building’s internal steel support columns were also leaning precariously and the wooden floor joists were rotten and damaged by termites. The building’s condition was documented in DOB violations at the time of purchase. Although landlord did emergency shoring work, the building continued to deteriorate in part due to vibrations from construction work next door. Landlord didn’t seek any stop-work orders and took no action for two years until the building had deteriorated beyond repair despite last-ditch efforts ordered by DOB in 2009. Landlord was obligated to take reasonable steps to protect the building from the effects of the work next door, and the DHCR rationally decided that landlord allowed the building to deteriorate to the point where it would fall down. Therefore, the DHCR’s determination that landlord must pay demolition stipends and relocation costs for tenants was reasonable.

128 Hester LLC v. DHCR: 2017 NY Slip Op 00581, 2017 WL 401441 (App. Div. 1 Dept.; 1/31/17; Richter, JP, Andrias, Saxe, Gesmer, JJ)