Work Didn't Amount to Substantial Rehab of Building

Landlord asked the DHCR for a ruling in 2002 on a building's status, and claimed that the building was deregulated based on substantial rehabilitation completed between 1989 and 1991. The DHCR ruled against landlord, finding that the work didn't amount to a substantial rehabilitation and that the building remained rent stabilized.

Landlord appealed and lost.  In 2011, landlord filed a second application with the DHCR, seeking a ruling that the building was deregulated due to substantial rehabilitation based on the prior work along with additional work performed between 2008 and 2010. The DHCR again ruled against landlord, who then filed an Article 78 court appeal, claiming that the DHCR's decision was arbitrary and unreasonable. The court ruled against landlord, finding that landlord was barred from relitigating  the prior ruling that work completed by 1991 didn't amount to a substantial rehabilitation.

Landlord appealed and lost. The DHCR's determination that the additional work was a separate project from the prior work and that the additional work didn't qualify as a substantial rehabilitation had a rational basis and wasn't arbitrary or capricious. And there already was a binding ruling that the prior work didn't qualify as a substantial rehab.

Smolarczyk v. Towns: 166 A.D.3d 786, 2018 NY Slip Op 07736 (App. Div. 2 Dept.; 11/14/18; Mastro, JP, Sgroi, Maltest, Nelson, JJ)