KMWB Argues Significant Substantial Rehabilitation Appeal

Partner Nativ Winiarsky recently argued an important appeal before the Appellate Division, Second Department concerning DHCR’s changing treatment of the substantial rehabilitation exemption from rent stabilization.

Under the former Rent Stabilization Code, a building that was at least 80% vacant when rehabilitation commenced was presumed to be “substandard or seriously deteriorated.” In recent determinations, however, DHCR has treated tenant surrender agreements as potentially defeating that presumption, reasoning that apartments vacated through buyouts may have been habitable notwithstanding the building’s vacancy.   The issue has significant implications for property owners who made substantial investments in rehabilitating deteriorated buildings in reliance on the regulatory framework and DHCR policies then in effect.  

The oral argument can be viewed here. The argument starts at 2:34:08  

KMWB remains at the forefront of legal issues affecting New York’s landlord community and will continue to vigorously advocate for the industry and work to develop favorable law for property owners.    

For guidance on how these issues may impact your matters, please contact Nativ Winiarsky or call 212.869.5030.