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With the June 2019 passage of the Housing Stability and Tenant Protection Act (HSTPA), owners are desperately seeking ways out of rent regulation in an attempt to recapture the profitability their buildings previously had. Two such exit strategies are “substantial rehabilitation,” available only to deteriorated buildings, and “demolition,” generally available to rent-stabilized buildings regardless of their condition.
One of the most fascinating parts of a real estate lawyer's career is negotiating the selling of rights to a rent-regulated tenancy to a landlord. These deals have made tenants into multimillionaires and given landlords the ability to build high-rise buildings. Now, this symbiosis of dreaming dreams and making them come true is under threat by existing case law (discussed in last month’s blog post) and new laws already enacted and politically promised.
Due to recent changes to the New York City Administrative Code and a recent decision in the Appellate Term, First Department, landowners who seek to buy out the rights of tenants in occupancy face a minefield of requirements and restrictions. Done properly, the landowner can recapture the apartment for other uses and seriously increase the rent.
When an owner evicts a tenant from an apartment, by the end of the process the tenant typically owes the owner some substantial sum of money. While these evictions are usually in the context either of a nonpayment proceeding or a holdover proceeding prosecuted in the New York City Civil Court, such prosecutions do not necessarily result in an actual money judgment rendered in favor of the owner. Of course, often they do.
Single-room occupancy housing, or more commonly called SROs, exist throughout New York City. Most of these dwellings contain single rooms without a bathroom, kitchen, or shower, as such facilities typically reside on another side of the floor in a shared capacity. SRO buildings are a relic of a past city hanging onto to a way of living that has long been abandoned.
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