Rent Stabilization Coverage Was Preempted by HUD Regulation

Tenant association at apartment building for low- and moderate-income families sued landlord, claiming that the building was subject to rent stabilization. The court ruled for tenants. Landlord appealed and won, in part. The building was constructed in 1969 and funded by a HUD mortgage. The Rent Stabilization Law therefore was preempted for the building through April 11, 2011, while the building was subject to HUD regulations based on a HUD subsidy grant that required the owner to maintain the low- and moderate-income character of the project until April 11, 2011. The fact that the mortgage was prepaid by December 2000 didn't expressly preempt RSL coverage at that time given landlord's continuation of the building's low- and moderate-income character. However, as of April 12, 2011, the building was subject to rent stabilization.  

435 Central Park West Tenant Association v. Park Front Apartments, LLC: 2018 NY Slip Op (App. Div. 1 Dept.; 8/2/18; Richter, JP, Manzanet-Daniels, Webber, Oing, Moulton, JJ)