Court Declines to Reverse Prior Orders of DHCR

The law firm of Kucker Marino Winiarsky & Bittens, LLP successfully defeated a claim posed by two wealthy New York City tenants that the court should reverse prior orders from the Division of Housing and Community Renewal (DHCR) which had luxury deregulated their apartments.

Saul D. Bruh, a Founding Partner of the firm, defended the owners in this case against Oscar winning actress Dianne Wiest and another tenant in the building before the Appellate Division of the State of New York.

The tenants claimed that because of the case of Roberts v. Tischman Speyer, 15 N.Y. 3rd 270 (2009), the prior luxury deregulation orders of the DHCR – issued over a decade earlier – should be reversed. A unanimous panel of the Appellate Division reversed the decision of Supreme Court Justice M. Kenney, which had reinstated Rent Stabilization to both apartments and set the matters down for hearings on the issue of rent overcharge. The Appellate Division determined that Dianne Wiest and her co-plaintiff had a full and fair opportunity to participate in the DHCR proceedings determining the luxury deregulations of their apartments.

This case involved an issue important to the real estate industry: while tenants cannot be high rent deregulated during a period when the building received J-51 benefits, prior successfully-contested claims of luxury deregulation will not be reversed.

The Appellate Division held that both of the tenants’ claims were dismissed and declared that the “apartments are not rent-stabilized.” The Appellate Division soundly rejected the tenants’ argument that their apartments became re-regulated following the DHCR decision because the parties executed subsequent market rate leases.

Mr. Bruh’s victory is significant to the real estate community because thousands of apartments in buildings receiving J-51 abatements have been decontrolled since the luxury deregulation statute first went into effect in 1993.