Nonprofit Organization Not Responsible for Denial of Section 8 Subsidies

Facts: Landlord got funding from CPC for construction of low-income housing. CPC is a nonprofit organization that provides financing for building rehabilitation for low- and middle-income housing. CPC granted the loan on condition that landlord complete renovation work at the building, clear building violations, and allow HPD to set rents based on Section 8 rent subsidies that presumably would be available for tenants. Section 8 subsidies later became unavailable because of drastic federal cuts in that program. CPC also refused to provide landlord permanent funding. Landlord sued CPC for not converting its construction loans into permanent mortgages and not helping landlord get Section 8 subsidies. The court ruled against landlord, and landlord appealed. Court: Landlord loses. Landlord didn't complete renovations and clear violations on time, so CPC wasn't required to give landlord a mortgage. And neither CPC nor HPD was responsible for getting Section 8 subsidies for landlord. Section 8 benefits come from the federal government. And landlord didn't claim that HPD didn't apply for the Section 8 benefits on landlord's behalf.

Marosu Realty Corp. v. Community Preservation Corp.: NYLJ, 1/3/06, p. 18, col. 1 (App. Div. 1 Dept.; Buckley, PJ, Mazzarelli, Weinberg, Ellerin, Catterson, McGuire, JJ)