No Stay of Law Barring SROs' Rental as Hotel Units

January 9, 2012

LVT Number: #23804

Landlords of Class A SRO buildings challenged a New York law, Chapter 225 of the Laws of 2010, in federal court. The statute amended the Multiple Dwelling Law to bar the rental of any unit in a Class A building for less than 30 days. Landlords claimed irreparable harm and asked the court for an injunction against enforcement of the law. The court and appeals court ruled against landlords. Any loss of goodwill resulting from landlords' inability to operate their budget hotel business, as well as any lost profits based on prior rents, could be provided for in money damages.

Landlords of Class A SRO buildings challenged a New York law, Chapter 225 of the Laws of 2010, in federal court. The statute amended the Multiple Dwelling Law to bar the rental of any unit in a Class A building for less than 30 days. Landlords claimed irreparable harm and asked the court for an injunction against enforcement of the law. The court and appeals court ruled against landlords. Any loss of goodwill resulting from landlords' inability to operate their budget hotel business, as well as any lost profits based on prior rents, could be provided for in money damages. In addition, any damage to landlords' reputation occurred when the law was passed in 2010 and couldn't be remedied by a preliminary injunction.

Dexter 345 Inc. v. Cuomo: Index No. 11-1802-cv, NYLJ No. 1202534885149 (2d Cir.; 12/5/11; Newman, J)

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