Tenant-Owned Co-op Building Not Subject to Rent Stabilization

Landlord, a cooperative corporation, asked the DHCR for a ruling on the rent-regulated status of nine apartments in a building that was a tenant-owned cooperative. The DRA ruled that these apartments were rent stabilized, based on a prior DHCR ruling. Landlord appealed, arguing that the DHCR's prior order was in error. The building was conveyed by the New York City Division of Alternate Management Program (DAMP) to the tenant-owned cooperative corporation, which was a housing development fund corporation organization under the federal Private Housing Finance Law (PHFL) and the New York General Business Law 352-e. The apartments in question were occupied by nonpurchasing tenants. The DHCR ruled for landlord. The DHCR's prior order was revoked based on an error of law that constituted an irregularity in a vital matter. The nine tenants in question moved in after the cooperative conversion. So they were exempt from rent stabilization. In addition, a nonprofit cooperative corporation organized under the PHFL is exempt by law from rent stabilization, both as an exception under the Rent Stabilization Law and because the building is operated for charitable purposes on a nonprofit basis. Although some of the tenants' leases state that they are rent stabilized, the mistaken leases don't give tenants rent-stabilization status.

125 Schenectady Avenue HDFC: DHCR Adm. Rev. Docket No. VI220012RO (3/25/08) [3-pg. doc.]