Tuesday, December 1, 2009

We Won (1st Round of) U or P Court Case!


On November 25, 2009, Justice Alice Schlesinger of New York State Supreme Court (the lowest state court of general jurisdiction)
  • ruled that DHCR's November 2007 regulations on "unique or peculiar circumstances" are valid, and
  • sent the case back to DHCR to determine within 150 days the thousands of "unique or peculiar" applications pending regarding 24 buildings state-wide.

Click here for a copy of the decision.
Read below for a SUMMARY.

THANKS to our lawyer, DAVID RATNER of Hartman, Ule, Rose & Ratner, for doing a terrific job!



 SUMMARY of JUSTICE SCHLESINGER'S DECISION


Justice Alice Schlesinger of the State Supreme Court in Manhattan ruled on November 25, 2009 in favor of the tenants in the Columbus 95 and Highbridge House cases.

Her decision states that:

(1) the KSLM (Westgate) decision only gave landlords the right to APPLY for "unique or peculiar circumstances" rent adjustments, not an automatic right to GET such increases.

(2) DHCR's Nov. 2007 regulation is valid. That regulation states that just leaving Mitchell-Lama is not by itself a "unique or peculiar circumstance" but landlords may apply to DHCR for increases based on individual apartment issues (or building-wide based on "hardship").  (The regulation can be found at http://www.save-ml.org/modules.php?name=News&file=article&sid=231 - and scroll down the page. )   The court said:

  • The DHCR regulation is consistent with the KSLM decision by the State's highest court, the Court of Appeals.

  • The "aside" by the Appellate Division (the mid-level court) about whether leaving Mitchell-Lama is a "unique or peculiar circumstance" is not binding, in part because it is based on three letters from DHCR responding to a speculative (hypothetical) question in a different matter. (Similarly an "aside" - legally called "dicta" - by Judge Stone earlier in this case is not binding because it was superfluous to what he was actually ruling on.) It is also not valid because the Court of Appeals did not reference that point in modifying the decision.

  • The DHCR regulation is within that agency's legal mandate, filling in the blanks left by a statute.

  • The DHCR regulation is consistent with the history of how DHCR has applied laws with the phrase "unique or peculiar circumstances" historically. The judge went back to the 1951 Rent Control Plan, a state report, where the phrase was first used, and followed it up historically, showing that it was used only for individual apartments and NOT across the board. Most tellingly, a DHCR Bulletin of that year said U or P increases would not apply "where the maximum rents had been reduced by Federal authorities . . .during a period of Federal regulation before the building became subject to the New York State regulations jurisdiction. The Commissioner opined that, since the rents had been set pursuant to Federal laws then in effect, the circumstances cannot be considered 'unique or peculiar' so as to warrant a rent increase upon the building's entry into the State regulatory system." (page 20 of the decision.)
(3) Where a law (including a regulation) changes while an application is pending, generally the NEW law applies. In this case, there is no difference between the new regulation and DHCR policy before that regulation.

(4) The DHCR regulation is constitutional (the regulation was within DHCR's authority), so the court dismissed the owners' claims of unconstitutionality.


Justice Schlesinger's orders -  as concerns us:

(A) She lifted the stay (hold) a former judge had imposed on DHCR, and ordered DHCR to DECIDE THE U or P APPLICATIONS WITHIN 150 DAYS for all 24 buildings whose applications are pending - including ours.


(B) She did NOT order DHCR to apply its "old" (pre-regulation) policy, in part because that is not legally required, and in part because the old policy and the new regulation apply the same policy.


THE BUILDINGS NAMED IN THIS LAWSUIT ARE:

MANHATTAN
  • Central Park Gardens (West 97th St. Realty Corp.)
  • Columbus 95 (Columbus House)
  • Axton Owner LLC (New Amsterdam)
  • Columbus Manor LLC
  • Town House West, LLC
  • Westview (765 Amsterdam Ave LLC)
  • Westwood House, LLC
 

BRONX:
  • Highbridge House Ogden, LLC (formerly Highbridge House) - Bronx
  • Noble Mansion Associates LLC (Bronx)
  • Stellar 2020 LLC (Boulevard Towers I) (Bronx)
  • Stellar Bruckner, LLC (Bruckner Towers) (Bronx)
  • Janel Towers LLC (Janel Towers) (Bronx)
  • Stellar Morrison LLC (Bronx)
  • Stellar Sedgwick LLC (1889 Sedgwick) (Bronx)
  • Stellar Undercliff, LLC (Undercliff) (Bronx)
BROOKLYN
  • Stellar 341 LLC (Prospect Towers) (Brooklyn)

HEMPSTEAD, NASSAU COUNTY
  • Stellar Hempstead (Hempstead, NY)

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