Landlord Must Replace Nonworking Elevator

In 2009, landlord asked the DHCR for permission to modify building services after IMD loft tenant became subject to rent stabilization. Landlord wished to dismantle a 75-year-old elevator that had broken down for good, noting that spare parts were no longer available and that it would cost about $150,000 to replace the elevator. The DRA ruled for landlord and granted a 5 percent rent reduction for the building's four rent-stabilized tenants. The DHCR denied PARs filed by both landlord and tenants. One tenant filed an Article 78 court appeal, and in 2014, the court ruled for tenant and sent the case back to the DHCR for reconsideration. In 2017, the DHCR reversed its prior decision and ordered landlord to repair or replace the elevator as a required ancillary service for the building.

Landlord filed an Article 78 court appeal and won. The court found that the DHCR's decision to require an elevator for a single rent-stabilized tenant in a walk-up building to be irrational.

Tenant appealed further and won. The appeals court found that the lower court had erroneously substituted its own evaluation of the facts for the DHCR's judgment. The DHCR's 2017 interpretation of the Rent Stabilization Code must be upheld as long as it was rational and neither arbitrary nor capricious. The appeals court reinstated the DHCR's 2017 decision that landlord must repair or replace the elevator.

Leonard St. Props. Group, Ltd. v. DHCR: Index No. 100887/17, 2019 NY Slip Op 08165 (App. Div. 1 Dept.; 11/12/19; Richter, JP, Tom, Gesmer, Kern, Moulton, JJ)