Monster Media 1996 #14/Monster Media No. 14 (April 1996) (Monster Media, Inc.).ISO/text/nyrentrs.zip/TENNANT.1

Text File | 1996-02-24 | 377KB | 7,637 lines

About TenantNet

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                            TENANT-NET (tm)

       The On-Line Resource for Residential Tenants' Rights

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The first internet service dedicated to residential tenants, primarily
in New York City and New York State, TenantNet is a project of Tenant
Watch, a coalition of tenants activists.

These are trying times for tenants. Landlords have mounted intense public
relations campaigns filled with lies, inaccuracies and misrepresentations
about rent regulation and hard-won tenant rights. Tenants are losing basic
services and being price-gouged at alarming rates. There is a very real
chance tenant protections will be repealed in 1997 leaving over 2.4
million New Yorkers at risk.

TenantNet offers:  - Information on tenants' rights and tenant issues.
                   - Limited referral and guidance
                   - Tenant advocacy

WWW:      http://tenant.blythe.org/TenantNet
          gopher://ursula.blythe.org:70/11/pub/TenantNet
Gopher:   tenant.blythe.org --> /pub/TenantNet directory.
email:    [e-mail] to be on TenantNet's mailing list.

To be on TenantNet's Mailing List, email to [e-mail] with
your userid and real name.

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What is on TenantNet?

What you want and what you need to be a well informed tenant and
tenant advocate. Phase 1 provides basic information on Rent Control
and Rent Stabilization. There will be more -- a lot more.

Start with the "Renter's Handbook" by former NYS Senator Manfred
Ohrenstein and the NYS Attorney General's "Tenant's Rights"
booklet (both in the RIGHTS directory). These short booklets
will be used as the basis for the planned Tenant FAQ.

The New York State Division of Housing and Community Renewal (DHCR)
administers both Rent Stabilization and Rent Control. DHCR Fact Sheets,
the Rent Stabilization Code (RSC), The Rent Stabilization Law (RSL),
the Rent Control Law are all available.


We hope to provide information on Housing Court, on forming Tenant
Associations, Building Code violations, the Rent Guidelines Board, on
finding and working with attorneys or how to represent yourself in Housing
Court), on pending housing legislation and maybe a list of recalcitrant
landlords, landlord scams and how various government agencies operate.

Rent regulation is the predominant form of rental housing in New York
(56%) and a prime focus of TenantNet. Other housing schemes (SROs, Lofts,
Mitchell-Lama, Coop, unregulated apartments and Public Housing are
also major components of the housing equation and to the extent we are
able to cover these topics, we hope to do so. As time permits, TenantNet
will try to respond to inquiries or specific questions. If you don't
find what you're looking for, let us know.

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WHAT TENANTNET IS NOT

TenantNet is not an apartment referral service or brokerage, is not
connected with any person or company in the real estate industry, is
not associated or affiliated with any government agency, political
party or ideology and receives no funding from any of the above.

The information contained on TenantNet is believed to be accurate and
up-to-date except where indicated, and is for informational purposes only.

TenantNet cannot act as your attorney (and we are not attorneys) and
makes no representations, expressed or implied, that the information
contained within TenantNet can or will be used or interpreted in any
particular way by any governmental agency or court. We can in some cases,
and to those who are interested, suggest attorneys or tenant community
organizations to contact for individual case assistance.

Tenant Watch is an informal network of tenants and tenant leaders who,
for the most part, are actively involved in tenant associations and/or
community groups. Various members of Tenant Watch are also volunteer
members of the Tenant Advisory Committee (TAC) to the NYS Division of
Housing (DHCR). Tenant Watch has supported various candidates to the
judiciary, has had legislation passed in the NYS Legislature and
pressured DHCR to release over 6,000 cases on CD-ROM.

TenantNet:

           1: About TenantNet
           2: What's New
           3: Disclaimer -- Must Read!
           4: Tenant Rights FAQ (Frequently Asked Questions)
           5: Tenants Online -- current newsletter
           6: Tenants' Rights (general)
           7: Alerts -- Events, Hot Issues & Miscellaneous
           8: NYS Division of Housing & Community Renewal (DHCR) information
           9: NYS/NYC Rent Regulation Laws - Rent Control/Rent Stabilization
          10: Other Housing Laws - NYS and NYC
          11: Watchdog on DHCR
          12: Court and Complaints
          13: NYC Community Information
          14: Not just NY -- other areas
          15: Organize
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What's New

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What's New at TENANT-NET

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September 29, 1995

NYS Real Property Law (RPL) is now online in the Other Laws
section of the gopher and in the "Housing Laws" of the web.
RPL should not be confused with various rent regulatory
laws (Rent Control/Rent Stabilization) as it does not impose
regulation and applies as well to non-regulated tenants.
Certain sections of the RPL establish basic rights of
tenants in NYS: Warranty of Habitability, the right to form
and participate in a tenants association, the prohibition of
retaliatory eviction, the "roommate" law, rights to sublet,
and others. RPL should also not be confused with the Real
Property Actions and Proceedings Law (RPAPL, also online)
which establishes the nature of legal proceedings dealing
with real property.

NYS Multiple Dwelling Law (MDL) is also online and affects
all NYS municipalities with populations of 325,000 or more
(as well as any smaller municipality which chooses to adopt
the MDL and establishes minimum housing standards. For those
municipalities with smaller populations, the NYS
Multiple Residence Law (MRL) -- soon to be online -- applies.
The NYC Housing Maintenance Code (also online) establishes
housing standards in addition to those set forth by the MDL.

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August 18, 1995

WEB site is up! Go to http://tenant.blythe.org/TenantNet

CTRC Fact Sheets available from the Community Training and
Resource Center (CTRC). These cover many frequently asked
topics and give you a realistic view on the issue. In the
Rights directory or from the web page.

"Your Right To Know" -- an excellent booklet explaining
how to get documents from the state/city government through
the Freedom of Information Law (FOIL). In Other Laws
(www: NY Housing Laws).

Lease Succession Rights for Family Members of RS/RC Tenants
explaining how apartments may be passed on to family members.
In DHCR Info (www: Rent Stabilization/Rent Control)

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June 24, 1995

1. Housing Maintenance Code of NYC (other housing laws)

2. How to read a DHCR docket number
   DHCR Organizational Chart (1994)

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May 31, 1995

1. On the Lower East Side:
   Observations of Life in Lower Manhattan at the Turn of the Century

   -- an amazing series of articles and monographs on immigration,
   neighborhoods and the development of housing in NYC's Lower
   East Side -- developed by St. Mary's College, Minnesota (used
   with permission). For those who think NYC's housing problems
   began in World War II, this is a must read.

   in: /Community Information

2. New York -- State Administrative Procedures Act (SAPA)

   in: /Other Housing Laws - NYS and NYC

3. New York -- Public Officers Law
   includes FREEDOM OF INFORMATION LAW and OPEN MEETINGS LAW

   in: /Other Housing Laws - NYS and NYC

4. New York State Court of Appeals - Selected decisions

   in: /Courts and Complaints

5. Tenant information from the United Kingdom, Scotland,
   Northern Ireland and Australia. Also additional info
   from Massachusetts.

6. Tenants' Rights Q's & A's - Assemblyman Richard Gottfried
   Rent Regulation Reform Act of 1993 with analysis.

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May 14, 1995

1. DHCR's book: "RENT REGULATION AFTER 50 YEARS"

   An Overview of New York State's Rent Regulated Housing 1993
   A good background on Rent Regulation, but keep in mind the
   source of the material.

   in: /Alerts -- Events, Threats & Issues

2. "Tenants Online Newsletter" archive

   in: /Alerts -- Events, Threats & Issues

   Check for current newsletter in the top directory.

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May 6, 1995

TenantNet is new!

This space will be used to announce new documents archived at
TenantNet and new features as they are added.

For current events, check the ALERTS directory.

Readers are encouraged to subscribe to TenantNet's mailing list
for announcements and updates. To subscribe, email to
[e-mail] with your userid and real name.

If enough people are interested, we may look into the possibility
of establishing a tenant newsgroup. Let us know what you think.

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Disclaimer -- Must Read!

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                         TENANT-NET

    The On-Line Resource for Residential Rental Tenants' Rights

    ===========================================================

DISCLAIMER

The information contained on TenantNet may be used in defense
of tenants' rights in proceedings before government agencies,
in court or otherwise. The reader is cautioned to read the following:

TenantNet is not an apartment referral service or brokerage. The
internet already has several such services which may (or may not)
provide valuable services. Buyer beware.

TenantNet has no connection, in any way, with any person or
company in the real estate industry that owns or operates
residential housing accommodations or property.

TenantNet is not affiliated with any political party and
promotes no particular political ideology.

TenantNet is not sponsored by or affiliated with any government
agency and receives no funding from the government.

The reader is advised that laws and regulations constantly change;
however the information contained on TenantNet is believed to be
accurate and up-to-date except where indicated, and is for
informational purposes only. TenantNet cannot act as your attorney
(and we are not attorneys) and makes no representations, expressed
or implied, that the information contained within TenantNet can
or will be used or interpreted in any particular way by any
governmental agency or court. We can in some cases, and to those
who are interested, suggest attorneys or tenant community
organizations to contact for individual case assistance.

The information contained on TenantNet (including government statutes,
regulations, rules, court decisions, legislative matters, etc.) is
believed to be in the public domain, except where indicated.
Information provided by other organizations and made available on
TenantNet remains the property of the originating organization(s)
and subject to use provisions (if any) cited in the particular
document(s). The views, opinions and interpretations are those
of the originator.

Except where indicated, where provided by an outside entity, or
where in the public domain, all material contained on and/or
disseminated by TenantNet (including commentary, editing, annotation)
is copyright (c) 1994, 1995 by TenantNet, all rights reserved.
Permission must be requested (and generally will ge granted) to
reproduce such material in either electronic and/or written form
if reproduced in full, without change and if credit is given to
TenantNet. In the case of third party material, contact the copyright
holder. If in doubt, please email to [e-mail].

_________________________________________________________________________


Tenant Rights FAQ (Frequently Asked Questions)

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Tenant Rights -- Frequently Asked Questions (FAQ)
               sponsored by TenantNet

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In lieu of writing a FAQ from scratch (at least for right now),
the following two documents will serve as a tenant FAQ.

1. The Renter's Handbook - by former NYS Senator Manfred Ohrenstein
2. Tenants' Rights - issued by the NYS Attorney General's office

These two booklets can also be found as separate files in the
Tenants Rights directory.

These booklets were issued a few years ago and there have been
changes in the rent laws since then, most notably the Rent "Reform"
Act of 1993 which severely gutted the rent regulatory system.
In addition to establishing a means test for the first time
(for no other reason than to justify right-wing criticism of the
rent laws) by the enactment of High Income and High Rent Decontrol,
the RRA of 1993 also gutted any meaningful enforcement of apartment
registration which is the foundation of the regulatory system.
Although there is still a requirement to register apartments,
in general all penalties for not doing so have been removed.

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THE RENTER'S HANDBOOK
Senate Minority Leader Manfred Ohrenstein
(c) April, 1990
_________________________________________________________________________

(c) April, 1990
------------

INTRODUCTION
by Senator Manfred Ohrenstein

I am pleased to make available this third edition of the Renter's
Handbook. The following pages contain summaries of tenant's
rights, common problems encountered by tenants and tips on how to
protect your rights and solve the problems.

The laws governing landlord-tenant relationships have evolved
over many decades and are extremely complex. Because of this,
there is a continual need for an understandable and up-to-date
guide to tenants' rights in New York City. I hope that you will
keep this booklet handy and that it will he useful to you.

In Albany, I have devoted three decades to the fight for better
housing and stronger protections for tenants. Over the years, we
have achieved many victories. The statutory rights to sublet and
to have roommates, the Senior Citizen Rent Increase Exemption
Program and the Warranty of Habitability Law are just a few of
the advances made by tenants through legislation. I am continuing
to work for the enactment of other pending legislation that would
protect tenants of institutions from eviction, limit major
capital improvement rent increases, restrict the warehousing of
vacant apartments by landlords and toughen penalties for the
harassment of tenants.

On November 8, 1989 we made a major advance when Governor Cuomo
announced new regulations to extend tenancy rights to non-
traditional family members living in rent controlled and rent
stabilized apartments. Please carefully read the section of this
handbook entitled "Succession Rights" to learn how you can use
these new regulations to protect yourself and those you live with
from eviction in, case the person named on the lease should die
or move out of the apartment.

If you would like further information about my legislative
program or assistance with a personal housing problem, please
feel free to call my district office. The office staff has a
great deal of expertise in working with tenants and solving
housing problems. If your tenants' organization would like a
speaker for a meeting, I would be pleased to schedule a date with
you.

Senator Manfred Ohrenstein
District Office
270 Broadway - Room 612
New York, New York 10007

[ed note: Senator Ohrenstein retired 12/31/94; He was succeeded
by Senator Catherine Abate]

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TABLE OF CONTENTS


YOUR RENT
---------
Leases
Registration
Overcharges


YOUR RIGHTS
-----------
Rent Control and Stabilization
Subletting
Sharing Apartments
Succession Rights
Warranty of Habitability
Harassment
Major Capital Improvements
Nonprofit Landlords
Owner's Personal Use
Senior Citizens
Heat and Hot Water
Security Deposits
Landlord Access
Painting, Extermination, Superintendents and Pets
Tenant Information


YOUR REMEDIES
-------------
Administrative Procedures
Administrative Solutions
Legal Action
Withholding Rent
Housing Court
Tenant-Initiated Actions
Reaching A Decision
Tenant Organizing
The Agencies

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YOUR RENT
---------


LEASES

A tenant moving into a rent stabilized apartment for the first
time has the option of choosing either a one- or a two-year
lease, and the landlord is required to abide by the tenant's
choice.

The landlord must send you prior notice at least 150 and not less
than 120 days before the lease is due to expire. This notice must
be sent on a standard form issued by the State Division of
Housing and Community Renewal (DHCR), designated "RPT-8". You
must respond to this notice within 60 days of receiving it,
choosing either a one- or two-year renewal lease. Your response
will constitute a renewal lease. It is a good idea to make and
keep a copy of this form before you send it back to the landlord.

The rent adjustment for your initial lease and each subsequent
renewal must be within the limits announced by the Rent
Guidelines Board. This agency is appointed by the Mayor and sets
rent guidelines that change every year. The guidelines are
announced each year about July 1, and affect new and renewal
leases that take effect on or after the following October 1. For
the period extending from October 1, 1989 until September 30,
1990 the guidelines allow increases of 5.5% for a one-year lease
and 9% for a two-year lease, with an additional 12% vacancy
allowance added to a new lease. Also, some tenants renting
apartments for less than $325 per month can be charged an extra
$5 monthly rent increase.

By law, leases must be written in "plain English", and both new
and renewal leases must have attached a detailed description of
tenant's rights. This is also printed on a standard form known as
the DHCR Lease Rights Rider. The rent paid by the prior tenant
must also be shown on the rider attached to a new lease.

If your original lease was written in "legalese", it is important
to check that subsequent plain English renewals contained the
same terms and conditions as the original.

Renewal leases are not permitted to reduce any rights granted
under the first lease.

Rent controlled tenants generally do not have leases, and are
considered "statutory tenants" who have the right to remain in
their apartments for as long as they choose.

Rent increase orders are sent to rent controlled tenants at the
start of each year, establishing the maximum collectible rent for
the apartment and charges that are allowable for fuel and labor
costs. These orders will be sent by mail under the supervision of
the DHCR. If there is a dispute regarding the rent, the DHCR is
responsible for resolving the dispute.


REGISTRATION

Under the Omnibus Housing Act of 1983, owners were required to
register the rent of every rent stabilized apartment with the
DHCR by July 1, 1984. That initial registration also included a
detailed record of all services provided in the building.

Landlords are also required to update the registration statements
every year. This information must be made available to tenants
for a period of up to four years prior to the date of a tenant's
request for a rent history. You should check the accuracy of the
annual registration statements that you receive and keep them for
your records.

The rent registration system is intended to make it easier for a
tenant to ascertain the correct rent for his or her apartment and
should reduce rent overcharging by landlords.


OVERCHARGES

The laws guarantee refunds to rent controlled and stabilized
tenants who are overcharged on their rents. The amount of the
refund is determined according to the tenant's classification.

For RENT STABILIZED tenants:

Tenants filing complaints after April 1, 1984 are entitled to
refunds of all overcharges for a period of four years prior to
the date the overcharge complaint is filed. If the overcharge is
determined to be willful, an amount equal to three times the
amount of the overcharge must be refunded to the tenant; however,
the treble damage penalty is limited to two years of the
overcharge. Tenants are also eligible for interest payments and
attorney's fees.

For RENT CONTROLLED tenants:

Rent controlled tenants are entitled to a refund of overcharges
for the prior two years from the date the complaint is filed.
They may also sue in court for up to three times the amount of
the overcharges.

The Division of Housing and Community Renewal is required to
resolve all rent overcharge disputes involving both rent
controlled and rent stabilized tenants.

_________________________________________________________________________

YOUR RIGHTS
-----------


RENT CONTROL AND STABILIZATION

You are probably a rent controlled tenant if (a) your building
was constructed before 1947, (b) you moved into your apartment
before July 1, 1971 and (c) your building contains three or more
housing units. Rent controlled tenants are also called statutory
tenants.

You are probably a rent stabilized tenant if (a) your building
was constructed before January 1,1974, (b) you signed your
initial lease or a renewal lease after July 1,1971 and (c) your
building contains six or more housing units.

Buildings first occupied after January 1,1974 are frequently
subject to the rent stabilization law if they received property
tax benefits under either the 421-a or the J-51 tax programs.

The 421-a program affects new construction. In buildings that
were occupied before July 3,1984 tenants will retain their rent
stabilized status even after the 10 year tax benefit period
expires. After the 10 year period expires, new tenants are not
rent stabilized. In 421-a buildings first occupied after July
3,1984 tenants lose their stabilized status at the end of the tax
benefit period if each lease and renewal has given notice of the
approximate expiration date of the tax benefits and of rent
stabilization coverage.

The program formerly known as J-51 affects buildings that were
substantially rehabilitated. Tenants in such buildings will
retain their rent stabilized status beyond the end of the tax
benefit period, unless each lease and renewal has given notice of
the approximate expiration date of the tax benefits and of rent
stabilization coverage.

Before you sign a new lease, you should examine the lease and any
riders carefully to see if notice is given of the expiration of a
tax benefit period and that the apartment will no longer be
covered by rent regulation after such time.


SUBLETTING

Rent stabilized tenants have the right to sublet under New York
State Law, provided they follow certain procedures. Any lease
clause that prohibits a rent stabilized tenant from subletting is
automatically invalid and may be disregarded.

Rent controlled tenants are prohibited from subletting their
apartments unless the landlord agrees to the sublet in writing,
or unless the right to sublet was specifically included as part
of the original lease.

In order to sublet your apartment, you must notify your landlord
in writing, and send your notice by certified mail, return
receipt requested. In your notice you must include the following
information:

--   the name of the subtenant;

--   the date the sublease takes effect and the date it
     terminates;

--   the business address and the permanent home address of the
     subtenant;

--   your reason for wanting to sublet;

--   your address for the duration of the sublease;

--   if the prime lease was guaranteed by a third party, the
     written consent of the guarantor;

--   if the apartment is occupied by a co-tenant, the written
     consent of the co-tenant;

--   a copy of the sublease, attached to a copy of the prime
     lease, with a notarized statement signed by you and the
     subtenant attesting that it is a true copy of the sublease.

In stating your reason for wanting to sublet, you must make it
clear that your absence will be temporary and that you intend to
return to the apartment as your primary residence, or the
landlord will have a valid ground to refuse your sublet request.

Once you have mailed this notice, the landlord has 10 days from
the date you mailed the notice in which to ask for additional
information. You may be asked to complete a questionnaire about
yourself and the subtenant. While such a questionnaire is
permissible. it may not be unduly burdensome by asking irrelevant
questions.

If no further information is asked of you, the landlord must
respond to your notice within 30 days of the date it was mailed.
If additional information is requested within the initial 10-day
period, the landlord must respond within 30 days of the date the
additional information is mailed.

A landlord who does not respond within this timetable is
considered to have consented automatically to the sublet.

A landlord may not withhold consent unreasonably. Reasonable
cause for denying a sublet request includes the inability of the
subtenant to pay the rent; a subtenant with a history of
disruptive behavior; or an intention to use an apartment in an
unlawful manner.

If a landlord does withhold consent unreasonably, you may proceed
to sublet without his or her consent, or you may contest the
decision in court. The law requires the landlord to reimburse you
for legal costs, including attorney fees, if you can demonstrate
that your landlord acted in bad faith.

If you sublease an apartment with furnishings, a surcharge of up
to 10 percent above the legal rent may be added. You may not
collect more than the legal rent. A prime tenant who overcharges
a subtenant is subject to a rent overcharge complaint requiring
that a penalty equal to three times the amount of the overcharge
be refunded.

No apartment may be sublet for longer than two years out of any
four-year period. Furthermore, a tenant who does not intend to
return to the apartment is prohibited from assigning the lease to
a new tenant unless the landlord's written consent is obtained,
or unless the lease specifically permits assignment.


SHARING APARTMENTS

A tenant living alone in either a rent controlled or rent
stabilized apartment may invite an additional occupant, and the
dependent children of the occupant, to share an apartment. An
unlimited number of the tenant's immediate family members are
also permitted to share the apartment.

If two or more people signed a lease, a new occupant may replace
a departing tenant, however, the total number of tenants and
occupants may not exceed the original number of people who signed
the original lease. Most important, one of the original signers
of the lease must continue to live in the apartment.

An important distinction is made in the law between tenants and
occupants.

The tenant is the person or persons who signed the lease, and the
occupant is the person who moves in after the lease is signed.
The tenant retains the rights under the lease and is the only
person who may renew a lease once it expires. (Please read the
exceptions listed under Succession Rights). Once the tenant moves
out of an apartment, the occupant loses the right to remain in
the apartment without the expressed written consent of the
landlord.

A landlord may not pry into the nature of a relationship between
people who want to be roommates.

If you want to share your apartment, you should notify your
landlord in writing within 30 days of the date your roommate
moves in. If you fail to do that, you are required to respond to
an inquiry by your landlord within 30 days of his or her asking
whether a new occupant is living in the apartment.

The right to share your apartment is automatic, and a lease
provision that restricts sharing is invalid and may not be
enforced.

The following section on "Succession Rights" explains the
circumstances under which a person who has been sharing an
apartment may qualify to remain and obtain a lease even after the
original tenant has died or moved out.


SUCCESSION RIGHTS

State regulations now allow persons sharing apartments as members
of non-traditional families to have the same rights as
traditional family members to remain in rent controlled
apartments and to obtain renewal leases for rent stabilized
apartments after the tenant of record has died or permanently
vacated.

These "succession rights" are afforded to any person who has been
living with the tenant as a primary resident and who is able to
show a relationship with the tenant involving emotional and
financial commitment and interdependence. To protect privacy,
evidence of a sexual relationship may not be considered.

Many factors may be considered, including: the length of the
relationship; the sharing of household expenses; intermingling of
finances; engaging in family-type activities; formalizing legal
obligations, such as wills naming each other as executor and/or
beneficiary or having mutual powers of attorney; acting publicly
as family members; and performing family functions such as caring
for each other or each other's family members.

In addition, both traditional and non-traditional "family
members" are required to have lived in the apartment with the
tenant a minimum of two years (one year if the "family member" is
disabled or sixty-two years old or older) or, if they have lived
together a shorter time, from the beginning of the tenancy or of
their relationship with the tenant.

Generally, a non-traditional family member will have the burden
of proving that he or she had the required degree of commitment
and interdependence with the tenant to qualify for succession
rights. However, the burden can be shifted to the landlord to
disprove such a relationship by taking a simple step. Obtain from
the DHCR a form entitled "Notice To Owner Of Persons Other Than
Tenant Residing In Apartment", complete it and send it to the
landlord.

Any tenant wanting to protect the succession rights of a
traditional or non-traditional family member should be sure to
notify the landlord on the DHCR form and be sure the family
member retains proof of such notification. (If you have more than
one roommate, be sure that you are not indicating a violation of
the Apartment Sharing rules explained in the previous section of
this booklet.) If possible, have the landlord acknowledge receipt
of the form and the date of receipt on a copy, or send it by
certified mail return receipt requested.

_________________________________________________________________________

WARRANTY OF HABITABILITY

The Warranty of Habitability is an important section of the New
York Real Property Law. It requires owners of buildings to keep
their premises safe, clean and in good repair. Both the common
areas of buildings and the interiors of apartments must be free
of any condition that is detrimental to a person's health, life
or safety.

Under the Warranty of Habitability, tenants frequently seek rent
abatements by withholding rental payments, in order to get a
service restored or a defective condition corrected. If there is
a need for an emergency repair that the owner refuses to address,
tenants may also contract privately to have the repair done, and
then deduct the cost from the rent.

An owner's liability is limited, however, if the cause of the
service disruption is the result of a labor dispute. If there is
such a strike, and the owner reaps a profit as a result, a court
may order the owner to "pass through" the saving to the tenant in
the form of a one-time rent reduction.

Before a tenant withholds rent, it is advisable to consult an
experienced tenant organizer, legislative office, or attorney in
order to assure that the law is being properly applied.

The legal procedures available under the Warranty of Habitability
are explained in greater detail in the section of this booklet
entitled, "Your Remedies."

HARASSMENT

Harassment is the persistent denial or interruption of an
essential service or services, such as heat or hot water, or
abusive conduct by an owner [or an agent of the owner] which is
threatening to a resident or is intended to get a resident to
move out of his or her apartment.

If you are victimized by such conduct or an attempt is made to
require you to give up certain of your legal rights, a finding of
harassment may be reached by a court of law or an administrative
agency.

There are tough penalties imposed on owners who harass tenants.
Guidelines on how to obtain relief from harassing owners are
explained in the section of this booklet entitled, "Your
Remedies."

MAJOR CAPITAL IMPROVEMENTS

You have the right to contest a landlord's application to the
DHCR for a major capital improvement (MCI) rent increase. If an
application is made, you will receive a notice from the DHCR and
be given an opportunity to review the landlord's complete
application. You will have a thirty-day period within which to
comment.

Major capital improvements are generally building-wide
improvements such as a roof replacement, installation of a new
boiler, repiping of the hot and cold water system, or rewiring
throughout the building. The cost of asbestos abatement may be
included, if done in conjunction with an MCI. Improvements to
individual apartments are not considered MCI's, unless the same
improvement is made in all apartments, like installation of new
windows. Ordinary repairs or the restoration of a service
previously provided will not qualify as MCI's.

MCI rent increases are limited to 6% per year for rent stabilized
apartments and 15% per year for rent controlled apartments. These
increases become a permanent part of the rent and are not
eliminated when the landlord has recovered sufficient rent
increases to pay for the costs of the MCI.

The DHCR will audit the landlord's proof of expenses. MCI
requests are often reduced by the DHCR during such review. If you
believe the proof is wrong or inadequate, you may raise an
objection.

There are a number of other grounds for tenants to object to the
landlord's MCI application. The application and the building
should be carefully checked to see if all the work claimed was
actually done, if the work was done poorly, or if the work done
may not qualify as an MCI. Also, the item replaced must have
exceeded its useful life according to a schedule published by the
DHCR. The DHCR will only send one of its inspectors to look at
the building if the tenants have raised an objection as to
whether the work was done or as to the quality of the work.

In commenting on an MCI application, tenants should list all
docket numbers of pending complaints of service reductions filed
with the DHCR. Service reductions should also be detailed in the
answer to the MCI application and may lead to dismissal of the
application or postponement of the collectibility of any MCI rent
increase.

Finally, check the room count given by the landlord for your
apartment. The 1984 rent registration is not binding for this
purpose. The definition for MCI purposes is contained in the
landlord's application papers.


NONPROFIT LANDLORDS

Tenants who live in buildings owned by nonprofit, educational or
charitable organizations (such as a hospital, university,
religious institution, etc.) have been placed under the
protections of the rent stabilization system. These protections
include limitations on rent increases and requirements for the
delivery of essential services.

An organization may refuse to renew a lease in order to recover
the apartment for non-residential, institution-related purposes,
such as a classroom, conference hall, or laboratory. However, the
organization must obtain the approval of the Buildings Department
for the conversion from residential to non-residential use before
the tenant may be evicted.

In certain instances, the organization may also refuse to renew a
lease to recover an apartment for a residential purpose, but
there are restrictions on an organization's ability to invoke
this provision:

--   A tenant who moved into the building before the organization
     owned the building may not be refused a renewal lease.

--   A tenant who moved into a building with a nonprofit owner
     whose first lease started before July 1, 1978, and who was
     not informed at that time of the organization's right to
     recover the apartment, may not be refused a renewal lease.

A tenant who rents an apartment from a nonprofit organization,
and whose occupancy is in conjunction with an affiliation with
that organization (such as a student, employee, etc.) does not
have the automatic right to renew a lease once that affiliation
ends, unless it is with the expressed written consent of the
organization.

A nonprofit organization must give at least four months prior
notice to the tenant when it seeks to recover an apartment for
either a non-residential or residential purpose. Any organization
that fraudulently uses this provision of law to empty an
apartment will be subject to heavy financial penalties, including
an award to the tenant equal to three times the damages sustained
from increased rental payments, moving expenses and attorney
fees.


OWNER'S PERSONAL USE

An owner who seeks an apartment for his own use, or the use of a
member of his immediate family, may refuse to renew the lease of
a rent stabilized tenant or apply to the DHCR to evict a rent
controlled tenant

Rent controlled tenants may not be evicted where any member of
the household is 62 years of age or older, disabled, or has been
a tenant in the same building for 20 years or more.

The law restricts an owner's right to recover an apartment from a
rent stabilized tenant:

--   the owner, or family member, must intend to use the
     apartment as his or her residence in New York City;

--   if there are multiple owners of the building, only one may
     initiate an owner's personal use proceeding (there is no
     limit, however, on the number of units that may be
     recovered);

--   if the building is owned by a partnership or corporation,
     the owner's personal use provision may not be invoked.

No personal use proceeding may be initiated against a stabilized
tenant if the tenant or spouse is 62 years of age or older,
unless the tenant has been offered an equivalent or superior
apartment at the same or lower rent in the surrounding area. The
same prohibition applies to disabled tenants.

The apartment may not be used for any purpose other than the
owner's personal residence, or the residence of a family member,
for a minimum of three years. If the apartment is re-rented
within that period, the owner will be liable to a forfeiture of
all rent increases in the building for a period of three Years.


SENIOR CITIZENS

The Senior Citizen Rent Increase Exemption Program prohibits rent
increases for many senior citizens who live on fixed and limited
incomes. This program is available for both rent controlled and
stabilized tenants. It is administered by the New York City
Department of Housing Preservation and Development (HPD).

To be eligible, you or your spouse must be at least 62 years old;
the combined household income must not exceed $15,000 annually;
and the rent must be greater than one-third of your disposable
income.

If your income is greater than the maximum, it is advisable to
check with HPD. Certain of your tax liabilities may be
deductible, bringing your income within the guidelines.

Rent stabilized tenants are required to sign a two-year lease in
order to be eligible for the program.

_________________________________________________________________________

HEAT AND HOT WATER

The heat season begins each year on October 1 and ends on May 31.
During that time, an owner must provide heat according to the
following schedule:

--   between the hours of 6 a.m. and 10 p.m., if the temperature
     outdoors falls below 55 degrees, then the temperature inside
     your apartment must be maintained at 68 degrees;

--   between the hours of 10 p.m. and 6 a.m., if the temperature
     outdoors falls below 40 degrees, then the temperature inside
     your apartment must be maintained at 55 degrees.

Furthermore, the hot water temperature must be maintained at 120
degrees, 24 hours per day, year round.

Tenants who want to make complaints about an insufficiency of
heat or hot water should contact the HPD Central Complaints
Office.

*All temperatures are given in Fahrenheit.


SECURITY DEPOSITS

Your landlord may retain a security deposit equal to one month's
rent. The only exception to this rule is for rent stabilized
tenants who signed their first lease before May 29, 1974 and paid
two months rent as security.

If you paid more than the legal amount, you are entitled to a
refund.

If there are six or more apartments in your building, the
landlord is required to place your security deposit in an
interest-bearing bank account. You are entitled to know the name
of the bank and the account number. If you make a request to the
landlord, you are also entitled to annual interest payments on
the account, although your landlord may deduct one percent of the
amount to defray bookkeeping expenses.

When you sign a renewal lease, the landlord may increase the
security deposit by the same amount as the increase in the
monthly rent.

LANDLORD ACCESS

A landlord may enter your apartment only with good cause and at a
time that is mutually convenient for the purpose of making
repairs and inspecting for code violations. You may insist upon
prior notice for these routine visits.

In the event of an emergency, however, a landlord may demand
immediate access, or enter without your permission.

If you install new locks, your landlord is entitled to ask for a
copy of the keys.


PAINTING, EXTERMINATION, SUPERINTENDENTS AND PETS

Your landlord is required to paint your apartment every three
years at his or her expense. Some landlords will negotiate an
allowance to cover some or all of the cost, if the tenant
arranges for the painting in off years.

Your landlord is required to take all steps necessary to keep
your apartment and the public areas of the building free from
infestation of roaches, mice, rats and other vermin. Appropriate
services must be maintained to meet this health safety standard,
including contracting with independent extermination services, if
necessary.

If your building has nine or more units, a superintendent must
live in the building, or within a 200-foot radius. In addition,
the name and phone number of the superintendent must be posted in
a conspicuous location in the building. If there are fewer than
nine units in the building, a phone number of whom to call in the
event of an emergency must be posted

Although most standard leases prohibit tenants from keeping pets,
some landlords invoke this clause arbitrarily as a tactic to
force a tenant to move or to collect a higher rent. These
landlord abuses are now illegal. If you own a pet, and your
landlord or superintendent has knowledge of that fact for three
months or more, the "no pet" provision in your lease may not be
used against you at a later date. If a pet causes damage,
however, or becomes a nuisance, a landlord may still initiate an
action against a tenant.


TENANT INFORMATION

State law requires the Division of Housing and Community Renewal
to assist tenants by maintaining district offices in each borough
of New York City. These offices are staffed to assist tenants in
obtaining information and processing complaints.

A directory of these offices and other administrative agencies
that provide services to tenants is provided at the end of this
booklet.

In addition, legislators and other public officials usually have
staff trained to assist tenants.


YOUR REMEDIES
-------------

ADMINISTRATIVE PROCEDURES

Both rent controlled tenants and rent stabilized tenants should
contact the State Division of Housing and Community Renewal
(DHCR) for information about the housing laws, and for
administrative relief in the event of a tenant-landlord dispute.

Tenants can initiate complaints with the DHCR on the following
topics:

--   rent overcharges;

--   fair market rent appeals, contesting the first stabilized
     rent charged after a rent controlled apartment has been
     vacated;

--   review of the maximum base rent (MBR) and maximum
     collectible rent (MCR) for controlled apartments;

--   failure to renew or offer a renewal lease for a stabilized
     apartment;

--   harassment by an owner or agent;

--   reduction in rent because services are decreased (separate
     complaint forms are used, depending on whether the service
     decrease affects only an individual tenant or is building-
     wide);

--   reduction in rent because of failure to maintain heat and/or
     hot water;

When filing a complaint about a reduction in services or lack of
heat and/or hot water, be sure to check the box on the form
specifically requesting a rent reduction. All complaints must be
filed in duplicate. Be sure to keep a copy of any complaint filed
with the DHCR.

Complaint forms may be mailed or hand delivered to the borough
rent offices or to the central DHCR office in Jamaica, Queens. If
mailed, complaints should be sent by certified mail-return
receipt requested to provide proof of delivery to the DHCR. If
hand-delivered, have your copy date-stamped "received" at the
DHCR office.

Once the complaint is received by the DHCR, a docket number will
be assigned to the case. Thereafter, a rent examiner will contact
both the person making the complaint and the landlord or managing
agent of the building by mail for more information.

The forms for initiating complaints are available at the borough
rent offices of the DHCR. They are often also available from the
offices of State legislators.


ADMINISTRATIVE SOLUTIONS

The Division of Housing and Community Renewal is mandated to
enforce the rent laws, and to respond to tenant-landlord
disputes. Its powers include ensuring that rent overcharges are
refunded (an earlier section of this handbook addresses rent
overcharges), that services are maintained and that provisions of
leases are enforced.

Because this is a quasi-judicial proceeding, it is important for
the person making the complaint to be as thorough as possible in
explaining the problem. However, a tenant does not need to submit
proof when filing a complaint. A reasonable belief that a
complaint is valid is sufficient reason for a tenant to submit a
complaint form.

DHCR conducts a quasi-judicial proceeding in which a rent
examiner gathers evidence from all parties to a dispute, and has
the authority to require that all pertinent evidence in a case be
submitted for consideration. Most cases are handled entirely by
mail, occasionally hearings are scheduled. Tenants will be
notified to appear in person, or with an attorney, for a
conference shortly after filing harassment complaints.

If the person making the complaint fails to respond to a rent
examiner's request for documentary evidence, the complaint may be
dismissed. If a landlord fails to respond to a request for
information refuting the complaint, the complaint may be granted
on default. If you have complained about a reduction in services
and you are notified about an inspection, be sure to give the
DHCR inspector access to all affected apartments.

When the case is decided an "order" is issued. The losing side
has the right to file a Petition for Administrative Review (PAR)
to appeal the decision. A PAR must be filed within 35 days of the
date the order was issued and it must be filed on the DHCR's PAR
form.

LEGAL ACTION

Emergency problems demand fast action, and in these situations
the administrative procedures will probably not be able to give
you the quick solution you need. Under these circumstances, you
may decide to seek legal redress in Housing Court.

If you must appear in Housing Court, you should consult an
experienced tenant organizer, legislative office, or attorney in
order to assure that your rights are protected and enforced.

Tenants appearing in Housing Court must be careful to document
all aspects of the case being presented. Before going to court,
you should explain the nature of your complaint to your landlord
in writing, and mail the information via certified mail-return
receipt requested. Keep copies of all correspondence!

If you get no response to your complaint and you believe it
involves code violations, call the HPD Central Complaints Office
and ask for an inspector to be sent to your apartment. The
inspector will file a report on the visit which you can obtain
from the NYC Department of Housing Preservation and Development's
Division of Code Enforcement.

If your problem is visible, take photographs. If your complaint
concerns insufficient heat, record the temperature both inside
and outside your apartment. If other tenants have similar
problems, ask them to join you in making the complaint.

You can initiate a legal proceeding yourself, or you can withhold
payment of your rent as a device to force your landlord to take
you to court. In either event, your tenancy will be protected,
but it is important to follow the procedures explained in the
following sections.


WITHHOLDING RENT

Withholding all or part of your rent is a common and accepted
action that tenants undertake when a landlord is not providing
required services, but it must be done carefully.

As explained earlier, you should notify your landlord in writing
of your complaint, and allow a reasonable time for the situation
to be corrected. This notification might also include a statement
that you intend to withhold the next month's rent if the
outstanding serious problems are not resolved.

If the problems persist and you go ahead and withhold rent, you
will probably receive a "dispossess" notice, legally called a
notice of petition and petition. This is not an eviction notice.
It is your notification that the landlord is starting a non-
payment proceeding in the Housing Court.

You must answer this notice within five days of receiving it. If
you ignore a dispossess notice, you will lose your case by
default and may be evicted.


HOUSING COURT

Take the notice to the Housing Court located in the borough in
which you live. Each Housing Court has an office of the Clerk of
the Court, where you will receive a date for a hearing of your
complaint.

On the date of the hearing, you must appear by 9:30 A.M. in the
large room where the cases on the calendar are assigned. Your
name will be called, at which time you must answer. If you have
not had a recent inspection, you may obtain one by answering the
call of the calendar, "tenant requests inspection." An inspection
date will immediately be assigned and a later date will be
assigned for you to return to the court. If you need an
adjournment to another date, answer, "tenant application," and
you can explain what you want. If you do not need an inspection
or an adjournment, you should answer, "tenant ready."

You will then be assigned to a smaller hearing room where your
case will be heard by a Housing Judge.

When you get to the smaller court room, tell the clerk you are
ready. Present your case in a clear and concise manner, providing
all of the documentation you have assembled. All of your comments
should be addressed to the judge.


TENANT-INITIATED ACTIONS

A tenant who does not want to withhold rent can initiate a legal
proceeding (known as an "HP Action") by going to Housing Court
and completing three forms: an Order to Show Cause, an Affidavit
that details the complaint, and an Affidavit of Service stating
you have served the other papers on your landlord. These forms
are all available in the office of the Clerk of the Court,
located at the Housing Court.

There is a $25 fee for processing these forms. If you cannot
afford the fee, however, you can apply to have it waived.

The staff at the Clerk's office should help you fill out the
forms and answer questions about the Housing Court. They are not
there, however, to provide legal advice.

Once the three forms are completed, the Order to Show Cause will
be submitted to and signed by a judge. It must then be served on
both your landlord and the City's housing agency. The Clerk's
office will tell you how to do this.

The Order to Show Cause will contain the date, time, and
courtroom at which you and the landlord must appear for a
hearing. The procedures are then the same as those explained in
the previous section.


REACHING A DECISION

There are several possible decisions a judge may reach in a
tenant-landlord dispute, depending on the merits of your case.

You may be permitted to continue to withhold rent until the
violations are corrected, or the judge may order that you deposit
the rent money in an account maintained by the court. If the
dispute concerns unresolved repairs, the judge may set a date by
which the repairs must be completed.

In some instances, the judge may permit you to keep some or all
of the withheld rent (called a "rent abatement") in order to
compensate you for any inconvenience or hardship caused by the
problem in your apartment.

If the judge feels there is no merit to your case, you may be
directed to pay all of the withheld rent to your landlord. In
this case, you will have a maximum of five days in which to make
the payment. If you miss this deadline, you will be in default
and may be evicted.

Whoever loses the case, may also be directed to pay the court
costs of the winner.

Do not leave the court room until you are absolutely sure you
understand the judge's decision. Don't hesitate to ask for
further information or a clarification.

It is also important to remember that, although Housing Court is
more informal than most, it is still a court of law. Judges are
entrusted to arrive at solutions that assure that apartments are
kept in good condition, that the rights and obligations of
tenants and landlords are preserved, and that repairs are made
quickly.


TENANT ORGANIZING

"There is strength in numbers!" That familiar adage is especially
true in tenant-landlord disputes. The most effective way of
ensuring that your rights are protected and your building
maintained is for the tenants to establish a united, active
tenants organization.

You have the legal right to organize, and landlords are
prohibited by law from interfering with or retaliating against
activist tenants.

There are numerous tenant groups throughout the City with
expertise in helping to establish fledgling building
organizations. They can give you pointers on how to set up an
effective structure, develop a means of communicating with your
neighbors, and further educate you about the rights and
responsibilities you have as a New York City tenant.

Don't wait for a problem to materialize before you organize. A
tenants organization is a good way to meet your neighbors,
enhance the security of your building, and put your landlord on
notice that you expect good service.


THE AGENCIES
------------


ADMINISTRATIVE AGENCIES

DIVISION OF HOUSING AND COMMUNITY RENEWAL
OFFICE OF RENT ADMINISTRATION
Gertz Plaza Office Building
92-31 Union Hall Street
Jamaica, New York 11433
Telephone Information:
[phone]

     DHCR informs rent controlled and rent stabilized tenants
     about their rights under the State's housing laws, and
     resolves tenant-landlord disputes through administrative
     proceedings.

     BOROUGH RENT OFFICES:

     LOWER MANHATTAN OFFICE (south of 110th Street)
     156 William Street, 9th Floor, New York, N.Y. 10038
     [phone]

     UPPER MANHATTAN OFFICE
     Adam Clayton Powell, Jr. State Office Building
     163 West 125th Street, 5th Floor, New York, N.Y. 10027
     [phone]

     BROOKLYN OFFICE
     One Pierrepont Plaza, 11th Floor, Brooklyn, N.Y. 11201
     [phone]

     QUEENS OFFICE
     Gertz Plaza Office Building
     92-31 Union Hall Street, Jamaica, New York 11433
     [phone]

     BRONX OFFICE
     1 Fordham Plaza, 2nd Floor, Bronx, New York 10458
     [phone]

     STATEN ISLAND OFFICE
     350 St. Mark's Place, Room 105, Staten Island, N.Y. 10301
     [phone]


RENT SECURITY DEPOSITS -- CO-OP AND CONDO CONVERSIONS

ATTORNEY GENERAL (NYS Department of Law)
120 Broadway, New York, N.Y. 10271
[phone]

     The Attorney General's office assists tenants in obtaining
     interest on and return of security deposits. It reviews
     offerings to convert buildings to co-ops and condominiums,
     and provides tenants with information regarding their
     rights.


CODE VIOLATIONS AND INSPECTIONS

NYC DEPARTMENT OF HOUSING, PRESERVATION & DEVELOPMENT

     CENTRAL COMPLAINTS BUREAU
     215 West 125th Street, New York, N.Y. 10027 [phone]

     Central Complaints maintains a 24-hour hotline to receive
     complaints about heat hot water and other housing code
     violations.

     DIVISION OF CODE ENFORCEMENT (Manhattan Office)
     39 Broadway, 9th Floor, New York, N.Y. 10006
     [phone]

     Maintains a central registry of violations and inspection
     reports on apartments, and receives complaints regarding non-
     emergency code violations.

LEGAL ACTION

     MANHATTAN CIVIL COURT/HOUSING DIVISION
     111 Centre Street, New York, N .Y. 10013
     [phone]/374-4647

     Housing Court adjudicates disputes between landlords and
     tenants in legal proceedings.

     NYC DEPT. OF HOUSING PRESERVATION & DEVELOPMENT
     CENTRAL INFORMATION UNIT
     17 John Street, New York, N.Y. 10038
     (212) 566-HOME

     The Central Information Unit provides information about HPD
     programs and policies and information for tenants who must
     appear in Housing Court.


LEGAL ADVOCACY FOR LOW INCOME TENANTS

     COMMUNITY ACTION FOR LEGAL SERVICES (CALS)
     335 Broadway, New York, N.Y. 10013
     [phone]

     LEGAL AID SOCIETY
     15 Park Row, New York, N.Y. 10038
     [phone]

     Chelsea Office:
     111 8th Avenue, New York, N.Y. 10001
     [phone]


MFY LEGAL SERVICES

     Uptown Office:
     759 10th Avenue, New York, N.Y. 10019
     (212) 581 -2810

     Downtown Offices:
     35 Avenue A, New York, N.Y. 10009
     [phone]

     223 Grand Street, New York, N.Y. 10013
     [phone]

JEWISH BOARD OF FAMILY AND CHILDREN'S SERVICES
120 West 57th Street, New York, N.Y. 10019 [phone]


SINGLE ROOM OCCUPANCY (SRO) HOUSING

     NYC OFFICE FOR HOMELESS AND SRO HOUSING SERVICES
     52 Chambers Street, Room 400, New York, N.Y. 10007
     [phone]

     WEST SIDE SRO LAW PROJECT
     593 Columbus Avenue, New York, N.Y. 10024
     [phone]


HPD SENIOR CITIZEN RENT INCREASE EXEMPTION PROGRAM

     APPLICATIONS AND INFORMATION
     17 John Street, New York, N.Y. 10038
     [phone]

     The phone numbers and addresses of these offices are in
     effect as of December, 1989. Before visiting any of these
     offices, it is advisable to phone beforehand to confirm the
     location, as some addresses may be subject to change.

===============================================================
Copyright April 1990 by former NYS Senator Manfred Ohrenstein
who represented portions of New York, NY. Permission for
electronic publication is given by the Office of Senator
Ohrenstein and may be freely reproduced electronically as
long as no editing occurs, as long all disclaimers appearing in
this document are retained, indicating the material may not be current,
that Senator Ohrenstein is credited with authorship, and that
the electronic version of this document originated with TenantNet.
For any other type of publication or distribution,
contact the Senator's office.
---------------------------------------------------------------

===========================================================
===========================================================

TENANT'S RIGHTS

Fourth Edition 1987

State of New York
Department of Law
120 Broadway
New York, NY 10271


ROBERT ABRAMS
Attorney General


Dear New Yorker:

With today's tight rental market, rising rents, buildings going
co-op, and apartments getting harder to find, it is vital that
tenants throughout New York State know about the laws affecting
rental housing.

More and more New Yorkers are writing to me and visiting my
offices throughout the state asking for advice on landlord/tenant
matters. That is why I have published this handbook which
summarizes and explains the laws tenants need to know. I hope
that this book is helpful to you.

Tenants have important rights under rent stabilization and rent
control laws which limit rent increases and require certain
levels of service. On April 1, 1984, the entire rent regulatory
system became administered by the State Division of Housing and
Community Renewal (DHCR). Tenants now file complaints with that
agency to help protect their rights.

Tenants faced with the possibility that their building will be
converted to cooperative or condominium ownership should write
for a copy of my COOPERATIVE AND CONDOMINIUM CONVERSION HANDBOOK.
Free copies are available from my offices listed at the end of
this book.

New Yorkers who need additional assistance or information about
landlord/tenant matters should write or visit my nearest local
office.

Sincerely,

Robert Abrams

****************************************************************


CONTENTS

1.   Warranty of Habitability
2.   Landlord's Duty of Repair
3.   Leases
4.   Plain English Lease
5.   Unconscionable Lease Clauses
6.   Month-to-Month Tenants
7.   Eviction
8.   Landlords' Negligence
9.   Attorneys' Fees
10.  Tenants' Organizations
11.  Retaliation
12.  Right of Privacy
13.  Discrimination
14.  Real Estate Brokers
15.  Apartment Referral Agencies
16.  Key Money
17.  Rent Security Deposits
18.  Rent Receipts
19.  Rent Overcharging
20.  Subletting or Assigning Leases
21.  Apartment Sharing
22.  Safety
23.  Entrance Door Locks and Intercoms
24.  Lobby Attendant Service
25.  Elevator Mirrors
26.  Locks, Peepholes and Mail
27.  Smoke Detectors
28.  Window Guards
29.  Lead Paint
30.  Pets
31.  Heating Season
32.  Truth In Heating
33.  Continuation of Utility Service
34.  Oil Payments
35.  Mobile Home Park Tenants
36.  Loft Tenants
37.  Residential Hotels
38.  For Further Information

****************************************************************


TENANTS' RIGHTS

The rights of tenants in New York State are protected by a
variety of laws. The Multiple Dwelling Law applies in New York
City and Buffalo. The Multiple Residence Law covers all cities of
fewer than 400,000 people and all towns and villages. (A multiple
dwelling has three or more apartments.) These and other laws are
cited, where they apply.


WARRANTY OF HABITABILITY

Tenants are entitled to a livable, safe and sanitary apartment.
Lease provisions inconsistent with this right are illegal.
Failure to provide heat or hot water on a regular basis, or to
rid an apartment of insect infestation are examples of a
violation of this warranty. Public areas of the building are also
covered by the warranty of habitability. The warranty of
habitability also applies to cooperative apartments. (Real
Property Law Sec. 235-b)

If a landlord breaches the warranty, the tenant may sue for a
rent reduction. The tenant may also withhold rent, but in
response, the landlord may sue the tenant for non-payment of
rent. In such a case, the tenant may counter-sue for breach of
the warranty.

Rent reductions may be ordered if a court finds that the landlord
violated the warranty of habitability. The reduction is computed
by subtracting from the actual rent the estimated value of the
apartment without the essential services.

A landlord's liability for damages is limited when the failure to
provide services is the result of a union-wide building workers'
strike. However, a court may award damages to a tenant equal to a
share of the landlord's net savings because of the strike.
Landlords will be liable for lack of services caused by a strike
when they have not made a good faith attempt, where practicable,
to provide services.

In emergencies, tenants may make necessary repairs and deduct
reasonable repair costs from the rent. For example, when a
landlord has been notified that a door lock is broken and
willfully neglects to repair it, the tenant may hire a locksmith
and deduct the cost from the rent. Tenants should keep receipts
for such repairs.


LANDLORD'S DUTY OF REPAIR

Landlords of buildings with three or more apartments must keep
the apartments and the buildings' public areas in "good repair."
Landlords are required to maintain electrical, plumbing,
sanitary, heating, and ventilating systems in good and safe
working order. Landlords must also keep in good working order
appliances they install, such as refrigerators and stoves.
Landlords also have a legal duty to keep every part of a multiple
dwelling clean and free of vermin, dirt, garbage or other
offensive material. Tenants should bring complaints to the
attention of their local housing officials. (Multiple Dwelling
Law Sec. 78; 80; Multiple Residence Law Sec. 174)


LEASES

A lease is a contract between a landlord and tenant which
contains the terms and conditions of the rental. It cannot be
changed while it is in effect unless both parties agree. A lease
may be oral or written. However, an oral lease for more than one
year cannot be enforced. (General Obligations Law Sec. 5-701)

Tenants who rent apartments not covered by rent stabilization or
rent control must negotiate the rent, the duration of the rental,
and the conditions of occupancy with their landlords. These
matters must also be negotiated when the lease is up for renewal.

Some leases contain an automatic renewal clause. Because this can
be a trap for unwary tenants, landlords are required to give
tenants advance notice of the existence of an automatic renewal
clause. Landlords must give this notice between 15 and 30 days
before the tenant is required to notify the landlord of an
intention not to renew the lease. (General Obligations Law Sec. 5-
905)

Unless the lease states otherwise, the landlord is obligated to
deliver possession of the apartment to the tenant at the
beginning of the tenancy. If the landlord fails to do so, the
tenant has the right to cancel the lease and obtain a full refund
of any deposit. (Real Property Law Sec. 223-a)

A lease provision which requires a tenant to pledge his/her
household furniture as security for rent is void. (Real Property
Law Sec. 231)

Tenants protected by rent stabilization have the right to either
a one or two year lease when they move into an apartment and when
they renew their leases. The renewal leases for rent stabilized
tenants must be on the same terms and conditions as the prior
lease and rent increases, if any, are limited by law.

New York City rent stabilized tenants are entitled to receive
from their landlords a fully executed copy of their signed lease
no more than 30 days after the tenant signs the lease. The
lease's beginning and ending date must be stated. (L. 1984 Ch.
439)


PLAIN ENGLISH LEASE

Leases must use words with common and everyday meanings and must
be clear and coherent. Sections of leases must be appropriately
captioned and the print must be large enough to read easily.
(General Obligations Law Sec. 5-702; C.P.L.R. Sec. 4544)


UNCONSCIONABLE LEASE CLAUSES

Most landlords use printed form leases which they ask tenants to
sign on a take-it-or-leave-it basis. The law does not require
that any particular lease be used. Since tenants often have no
meaningful opportunity to reject lease provisions, the courts may
refuse to enforce a provision found to be unreasonably favorable
to the landlord. Nevertheless, read your lease and all riders
carefully before you sign. Do not rely on oral promises; make
sure that all promises and agreements are written in the lease
before signing it. It is wise to consult an attorney if you have
any questions about your lease. (Real Property Law Sec. 235-c)


MONTH-TO-MONTH TENANTS

Tenants who do not have leases and pay rent on a monthly basis
are called month-to-month tenants.

In localities without rent regulations, tenants who stay past the
end of a lease are treated as month-to-month tenants if the
landlord accepts their rent.

A month-to-month tenancy may be terminated by either party by
giving at least one month notice before the expiration of the
term. For example, suppose your rent is due on the first of each
month. Your landlord must tell you by September 30th before your
October rent is due that he wants you to move out by November
1st. The termination notice need not specify why the landlord
seeks possession of the apartment.

A landlord cannot unilaterally raise the rent of a month-to-month
tenant without the consent of the tenant. However, if the tenant
does not consent, the landlord can terminate the tenancy by
giving appropriate notice.

In New York City, the landlord must serve the tenant a written
termination giving 30 days notice before the expiration of the
term. The notice must state that the landlord elects to terminate
the tenancy and that refusal to vacate will lead to eviction
proceedings.

A termination notice does not automatically allow the landlord to
evict the tenant. The landlord must first bring an eviction
proceeding in court and prove the case. (Real Property Law Sec.
232-a; Sec. 232-b; Sec. 232-c)


EVICTION

To evict a tenant a landlord must sue in court and win the case.
Only a sheriff, marshal or constable can carry out a court
ordered warrant to evict a tenant. (RPAPL Sec. 749)

A landlord cannot take the law into his/her own hands and evict a
tenant by use of force or unlawful means, For example, a landlord
cannot use threats of violence, remove a tenant's possessions,
lock the tenant out of the apartment, or willfully discontinue
essential services such as water or heat. (Real Property Law Sec.
235)

A tenant who is put out of his/her apartment in a forcible or
unlawful manner is entitled to recover treble damages in a legal
action against the wrongdoer. Landlords in New York City who use
illegal methods to force a tenant to move are also subject to
both criminal and civil penalties. Further, the tenant is
entitled to be restored to occupancy. (RPAPL Sec. 5 713, Sec.
853; N.Y.C. Local Law 56, 1982)

When a tenant is evicted, the landlord has no right to retain the
tenant's personal belongings or furniture.

It is wise to consult an attorney to protect your legal rights if
your landlord seeks possession of your apartment. Never ignore
legal papers.


LANDLORDS' NEGLIGENCE

Lease provisions which exempt landlords from liability for
injuries to persons or property caused by the landlord's
negligence -- or that of his employees -- are null and void.
Further, a lease provision that waives the tenant's right to a
Jury trial in any lawsuit against a landlord for personal injury
or property damage is also null and void. (General Obligations
Law Sec. 5-321; Real Property Law 5 259-c)


ATTORNEYS' FEES

Many leases provide that landlords are entitled to collect
attorneys' fees from tenants. Under this provision, tenants who
successfully sue their landlords automatically have the same
right to recover reasonable attorneys' fees and expenses from the
landlord whether the lease says so, or not. (Real Property Law
Sec. 234)


TENANTS' ORGANIZATIONS

Tenants have a legal right to organize. They may form, join, and
participate in tenants' organizations for the purpose of
protecting their rights. Landlords may not harass or penalize
tenants who exercise this right.

Tenants' groups have the right to meet at reasonable hours in any
common area in their building, such as lobbies and halls. (Real
Property Law Sec. 230)


RETALIATION

Landlords are prohibited from harassing or retaliating against
tenants who exercise their rights. For example, landlords may not
seek to evict tenants solely because tenants (a) make good faith
complaints to a government agency about violations of any health
or safety laws; or (b) take good faith actions to protect rights
under their lease; or (c) participate in tenants' organizations:
Tenants may collect damages from landlords who violate this law,
which applies to all rentals except owner-occupied dwellings with
fewer than four units. (Real Property Law Sec. 223-b)


RIGHT OF PRIVACY

Tenants have the right to privacy within their apartments.
However, a landlord may enter a tenant's apartment with
reasonable prior notice, and at a reasonable time: (a) to provide
necessary or agreed upon repairs or services; or (b) in
accordance with the lease; or (c) to show the apartment to
prospective purchasers or tenants. In emergencies, such as fires,
the landlord may enter the apartment without the tenant's
consent. A landlord may not abuse this limited right of entry or
use it to harass a tenant.


DISCRIMINATION

Landlords may not refuse to lease accommodations to, refuse to
renew leases of, or otherwise discriminate against any person or
group of persons because of race, creed, color, national origin,
sex, disability, age or marital status. (Executive Law Sec.
296(5))

Landlords may not refuse to lease an apartment or discriminate
against any person in the terms and conditions of the rental
because that person has children living with them. For example,
landlords may not impose a so-called "family surcharge."
Aggrieved families may bring a lawsuit for damages and for an
injunction against a landlord who violates this law. (Real
Property Law Sec. 236)

In addition, a lease may not require that tenants agree to remain
childless during their tenancy. (Real Property Law Sec. 237)

In New York City, landlords may not refuse to lease an apartment
solely for residential purposes or discriminate in the terms and
conditions of the rental because of a person's lawful occupation.
For example, a landlord's "no lawyer" or "no actor" rental policy
is prohibited. Aggrieved tenants should complain to the New York
City Human Rights Commission. (NYC Local Law 59, 1486)


REAL ESTATE BROKERS

Consumers may retain a real estate broker to find a suitable
apartment. The state licenses real estate brokers and
salespersons. Brokers charge a commission for their services
which is usually a stated percentage of the first year's rent.
The amount of the commission is not set by law and should be
negotiated between the parties. The broker must assist you in
finding and obtaining an apartment before he may charge you a
commission. The fee should not be paid until you are offered a
lease signed by the landlord. Complaints against real estate
brokers should be brought to the attention of the New York
Department of State. (Real Property Law, Article 12-A)


APARTMENT REFERRAL AGENCIES

Businesses that for advance fees provide information about the
location and availability of rental housing must be licensed by
the state. The fees charged by these firms may not exceed one
month's rent. When the information the firms provide does not
result in a rental, the entire pre-paid fee, less $15.00, must be
returned to the tenant. Criminal prosecutions for violations of
this law may be brought by the Attorney General. (Real Property
Law, Article 12-C)


KEY MONEY

It is illegal for a landlord, superintendent or managing agent to
require a prospective tenant to pay a bonus -- commonly called
"key money" -- above the lawful rent and security deposit for
preference in renting a vacant apartment,

RENT SECURITY DEPOSITS

Virtually all leases require tenants to give their landlords a
security deposit. The security deposit is generally limited to
one month's rent if the apartment is covered by the Rent
Stabilization Law. The landlord must return the security deposit,
less any lawful deduction, to the tenant at the end of the lease
or within a reasonable time thereafter. A landlord may use the
security deposit only: (a) as reimbursement for the reasonable
cost of repairs beyond normal wear and tear, if the tenant
damages the apartment; and (b) as reimbursement for any unpaid
rent.

The law requires all landlords, regardless of the number of units
in the building, to treat the deposits as trust funds belonging
to their tenants. Landlords are prohibited from mingling the
deposits with their own money. Landlords of buildings with six or
more apartments must put all security deposits in New York bank
accounts earning interest at the prevailing rate. Each tenant
must be informed in writing of the bank's name and address and
the amount of the deposit. Landlords are entitled to annual
administrative expenses of 1% of the deposit. All other interest
earned on the deposits belongs to the tenants. Tenants must be
given the option of having this interest paid to them annually,
applied to rent, or paid at the end of the lease.

If the building has fewer than six apartments, a landlord who
voluntarily places the security deposits in an interest bearing
bank account must also pay interest to tenants and may retain the
same 1% annual administrative fee.

These rules also apply to mobile home parks.

For example: A tenant pays a security deposit of $400.00. The
landlord places the deposit in an interest bearing bank account
paying 5.5%. At the end of the year the account will have earned
interest of $22.00. The tenant is entitled to $18.00 and the
landlord may retain $4.00, 1% of the deposit, as an
administrative fee.

If the building is sold, the landlord must transfer all security
deposits to the new owner within five days, or return the
security deposits to the tenants. Landlords must notify the
tenants, by registered or certified mail, of the name and address
of the new owner.

Purchasers of rent stabilized buildings in New York City or in
Westchester, Nassau or Rockland Counties are directly responsible
to tenants for the return of security deposits and any interest.
This responsibility exists whether or not the new owner received
the security deposits from the former landlord.

Purchasers of rent-controlled buildings or buildings containing
six or more apartments where tenants have written leases are
directly responsible to tenants for the return of security
deposits and interest in cases where the purchaser has "actual
knowledge" of the security deposits. The law defines specifically
when a new owner is deemed to have "actual knowledge" of the
security deposits.

When problems arise tenants should first try to resolve them with
the landlord before taking other action. If a dispute cannot be
resolved, contact the nearest local office of the Attorney
General, listed at the end of this booklet. (General Obligations
Law, Article 7)


RENT RECEIPTS

Landlords must provide tenants with a written receipt when rent
is paid in cash, a money order, a cashier's check or in any form
other than the personal check or a tenant. The receipt must state
the payment date, the amount, the period for which the rent was
paid, and the apartment number. The receipt must be signed by the
person receiving the payment and state his or her title. (Real
Property Law Sec. 235-e)


RENT OVERCHARGING

In New York City and certain communities in Nassau, Rockland and
Westchester counties where rent stabilization laws apply, the
landlord may not charge more than the legal regulated rent.

Under the new housing law enacted in 1983, landlords must
register each rent stabilized apartment with the state Division
of Housing and Community Renewal (DHCR) and provide tenants with
a copy of the registration statement. Landlords were required to
register initially prior to July 1, 1984. The initial
registration form contains the rent charged on April 1, 1984 and
the services and equipment provided to the apartment. The legal
regulated rent is either (1) the registered rent, unless
challenged by the tenant within 90 days of the mailing or
delivery to the tenant of the registration statement; or (2) the
rent set by DHCR, if the registered rent is successfully
challenged. If successfully challenged, the landlord is liable to
the tenant for any overcharge that was collected within the past
four years. The tenant is also entitled to recover interest plus
reasonable costs and attorney's fees for the overcharge
proceeding.

Where a rent overcharge occurs after initial registration, a
tenant must file a complaint within four years of the date of the
first overcharge claimed. Landlords are liable for the amount of
the overcharge plus interest from the date of the overcharge for
the period beginning four years before the complaint is filed.
The tenant is also entitled to recover reasonable costs and
attorney's fees for the overcharge proceeding..

In addition, if the overcharge is willful, the landlord is liable
for a penalty of three times the amount of the overcharge. The
landlord has the burden of proving the overcharge is not willful.
However, this treble damages penalty is limited to two years and
does not apply to an overcharge which occurred prior to April 1,
1984.

Over $14 million. in rent overcharges have been refunded to rent
stabilized tenants as a result of investigations by the Attorney
General's office: Contact the Attorney General's office if you
believe that your landlord has engaged in a pattern of rent
overcharging.


SUBLETTING OR ASSIGNING LEASES

Subletting and assignment are methods of transferring the
tenant's legal interest in an apartment to another person. A
sublet transfers less than the tenant's entire interest while an
assignment transfers the entire interest. A tenant's right to
assign the lease is much more restricted than the right to
sublet.

A tenant may not assign the lease without the landlord's written
consent. The landlord may withhold consent without cause. If the
landlord reasonably refuses consent, the tenant cannot assign and
is not entitled to be released from the lease. If the landlord
unreasonably refuses consent, the tenant is entitled to be
released from the lease after 30 days notice.

Tenants with leases who live in buildings with four or more
apartments have the right to sublet with the landlord's advance
consent. The landlord cannot unreasonably withhold consent.


If the landlord consents to the sublet, the tenant remains liable
to the landlord for the obligations of the lease. If the landlord
denies the sublet on reasonable grounds the tenant cannot sublet
and the landlord is not required to release the tenant from the
lease. A court must decide whether the particular grounds given
are reasonable.

If the landlord denies the sublet on unreasonable grounds, the
tenant may sublet. If a lawsuit results, the tenant may recover
court costs and attorney's fees if a judge rules that the
landlord denied the sublet in bad faith.

These steps must be followed by tenants wishing to sublet:

1)   The tenant must send a written request to the landlord by
     certified mail, return-receipt requested. The request must
     contain the following information: (a) the length of the
     sublease; (b) the name, home and business address of the
     proposed subtenant; (c) the reason for subletting; (d) the
     tenant's address during the sublet; (e) the written consent
     of any co-tenant or guarantor; (f) a copy of the proposed
     sublease together with a copy of the tenant's own lease, if
     available.

2)   Within 10 days after the mailing of this request, the
     landlord may ask the tenant for additional information to
     help make a decision. Any request for additional information
     may not be unduly burdensome.

3)   Within 30 days after the mailing of the tenant's request to
     sublet or the additional information requested by the
     landlord, whichever is later, the landlord must send the
     tenant a notice of consent, or if consent is denied, the
     reasons for denial. A landlord's failure to send this
     written notice is considered consent to sublet.

4)   A landlord cannot use a lease clause requiring a tenant to
     waive the right to sublet.

5)   A sublet or assignment which does not comply with the law
     may be grounds for eviction.

In addition to these sublet rules, there are additional
requirements limited to rent stabilized tenants. These rules
include the following:

(a)  The rent charged to the subtenant cannot exceed the
     stabilized rent except in the case of a furnished sublet
     when the tenant may collect an additional 10%. A subtenant
     who is overcharged may sue the prime tenant to recover
     treble damages plus interest and attorney's fees.

(b)  The prime tenant must establish that at all times he/she has
     maintained the apartment as a primary residence and intends
     to reoccupy it at the end of the sublet.

(c)  The prime tenant, not the subtenant, retains the rights to a
     renewal lease and any rights resulting from a co-op
     conversion. The term of a sublease may extend beyond the
     term of the prime tenant's lease. The tenant may not sublet
     for more than two years within any four-year period. (Real
     Property Law Sec. 226-b, RSL Sec. YY51-6.0(12))


APARTMENT SHARING

It is unlawful for a landlord by a lease clause to restrict
occupancy of an apartment to the named tenant in the lease or to
that tenant and immediate family. When the lease names only one
tenant, that tenant may share the apartment with immediate
family, one additional occupant and the occupant's dependent
children.

When the lease names more than one tenant, these tenants may
share their apartment with immediate family, and, if one of the
tenants named in the lease moves out, that tenant may be replaced
with another occupant and the dependent children of the occupant.
At least one of the tenants named in the lease or that tenant's
spouse must occupy the shared apartment as his or her primary
residence.

Tenants must inform their landlords of the name of any occupant
within 30 days after the occupant has moved into the apartment or
within 30 days of a landlord's request for this information. If
the tenant named in the lease moves out, the remaining occupant
has no right to continue in occupancy without the landlord's
express consent.

Landlords may continue to limit the total number of people living
in an apartment to comply with legal overcrowding standards.

Tenants can sue landlords who violate this law for an injunction,
actual damages and court costs. (Real Property Law Sec. 235-f)


SAFETY

Tenants who are victims of crimes in their building or apartment,
and who are able to prove that the criminal took advantage of the
landlord's failure to make the building reasonably safe, may be
able to recover personal and property damages from the landlord.


ENTRANCE DOOR LOCKS AND INTERCOMS

Multiple dwellings which were built or converted to such use
after January l, 1968 must have automatic self-closing and self-
locking doors at all entrances. These doors must be kept locked
at all times -- except when an attendant is on duty.

If this type of building contains eight or more apartments it
must also have a two-way voice intercom system from each
apartment to the front door and tenants must be able to "buzz"
open the entrance door for visitors.

Multiple dwellings built or converted to such use prior to
January l, 1968 also must have self-locking doors and a two-way
intercom system if requested by a majority of the tenants.
Landlords may recover from tenants the cost of providing this
equipment. (Multiple Dwelling Law Sec. 50-a)


LOBBY ATTENDANT SERVICE

Tenants of multiple dwellings with eight or more apartments, are
entitled to maintain a lobby attendant service for their safety
and security, whenever any attendant provided by the landlord is
not on duty. (Multiple Dwelling Law Sec. 50-c)


ELEVATOR MIRRORS

There must be a mirror in each self-service elevator in multiple
dwellings so that people may see -- prior to entering -if anyone
is already in the elevator. (Multiple Dwelling law Sec. 51-b)


LOCKS, PEEPHOLES AND MAIL

Tenants in multiple dwellings can install and maintain their own
locks on their apartment entrance doors in addition to the lock
supplied by the landlord. The lock may be no more than three
inches in circumference, and tenants must provide their landlord
with a duplicate key upon request.

The landlord must provide a peephole in the entrance door of each
apartment. Landlords of multiple dwellings in New York City must
also install a chain-door guard on the entrance door to each
apartment so as to permit partial opening of the door. (Multiple
Dwelling Law Sec. 51-a, 51-c; NYC Admin. Code Sec. D26-20.05)

United States Postal regulations require landlords of buildings
containing three or more apartments to provide secure mail boxes
for each apartment unless the management has arranged to
distribute the mail to each apartment. Landlords must keep the
mail boxes and locks in good repair.


SMOKE DETECTORS

Landlords of multiple dwellings in New York City must install one
or more approved smoke detectors in each apartment, within 15
feet of any room used for sleeping. Tenants may be asked to
reimburse the owner up to $10.00 for the cost of purchasing and
installing each battery-operated detector. During the first year
of use, landlords must repair or replace any broken detector if
its malfunction is not the tenant's fault. Tenants should test
their detectors frequently to make sure they work properly. (NYC
Local Law 62, 1981)


WINDOW GUARDS

Landlords of multiple dwellings in New York City must install
government approved window guards in each window in any apartment
where a child ten years old or younger lives. Tenants are
required to have such guards installed. In other cases, landlords
are required to install window guards provided the tenant
requests them. Windows giving access to fire escapes are
excluded. Protective guards must also be installed on the windows
of all public hallways. Landlords must give tenants an annual
notice about their rights to window guards and must provide this
information in a lease rider. Rent controlled and stabilized
tenants may be charged for these guards. (NYC Health Code Sec.
131.15, Local Law 33, 1986)


LEAD PAINT

Landlords of apartments in multiple dwellings in New York City
where a child 6 years old or younger lives must protect against
the possibility that children will eat peeling paint chips
containing dangerous lead based paint. Landlords must remove or
cover apartment walls and other areas painted with lead based
paint. The law presumes that lead based paint was used if the
paint is peeling in an apartment in a building built prior to
January 1, 1960. (NYC Local Law 1, 1982)


PETS

Tenants may keep pets in their apartments if their lease permits
pets or is silent on the subject. Landlords may be able to evict
tenants who violate a lease provision prohibiting pets. But
tenants in multiple dwellings in New York City have important
protection against no pet lease clauses. Where a tenant has "open
and notoriously" kept a pet for at least three months and the
owner of the building or his agent has knowledge of this fact,
then the landlord waives a no pet clause. However, this
protection does not apply where the animal causes damage, is a
nuisance or substantially interferes with other tenants. (NYC
Administrative Code Sec. D: 26-10.10)

Tenants who are blind or deaf are permitted to have guide dogs
regardless of a no pet clause in their lease. (Civil Rights Law
Sec. 47)


HEATING SEASON

Heat must be supplied from October 1 through May 31, to tenants
in multiple dwellings if: a) the outdoor temperature falls below
55 degrees Fahrenheit, between 6 A.M. and 10 P.M. each apartment
must be heated to a temperature of at least 68 degrees
Fahrenheit; (b) the outdoor temperature falls below 40 degrees
Fahrenheit, between the hours of 10 P.M. and 6 A.M. each
apartment must be heated to a temperature of at least 55 degrees
Fahrenheit. (Multiple Dwelling Law Sec. 79)


TRUTH IN HEATING

Before signing a lease requiring payment of individual heating
and cooling bills, prospective tenants are entitled to receive a
complete set or summary of the past two years' bills. These
copies must be provided free upon written request. This law
encourages landlords to make buildings more energy efficient and
helps prospective tenants to more accurately calculate their
expenses. The State Energy Office can help tenants with related
problems. (Energy Law Sec. 17-103)

CONTINUATION OF UTILITY SERVICE

When the landlord of a multiple dwelling is delinquent in paying
utility bills, the utility must give advance written notice to
tenants and to certain government agencies of its intent to
discontinue service. Service may not be discontinued if tenants
pay the landlord's current bill directly to the utility company.
Tenants can deduct these charges from future rent payments. The
Public Service Commission can assist tenants with related
problems.

If a multiple dwelling's landlord fails to pay a utility bill and
service is discontinued, tenants can receive payment for damages
from the landlord. (Real Property Law Sec. 235-a; Public Service
Law Sec. 33)


OIL PAYMENTS

Tenants in oil heated multiple dwellings may contract with an oil
dealer, and pay for oil deliveries to their building, when the
landlord fails to assure a sufficient fuel supply. These payments
are deductible from rent. Local housing officials have lists of
oil dealers who will make fuel deliveries under these
circumstances. (Multiple Dwelling Law Sec. 302-c; Multiple
Residence Law Sec. 305-c )


MOBILE HOME PARK TENANTS

Mobile home park tenants must be offered initially at least a one
year lease. This offer must be made in writing and prior to a
tenant's occupancy.

Tenants may not be evicted without statutory cause such as non-
payment of rent or continuing in occupancy after expiration of
the term of tenancy. Tenants who breach lease provisions or rules
and regulations must be afforded a ten-day right to cure the
breach before the owner may commence eviction proceedings.

No tenant may be charged a fee for other than rent, utilities and
charges for facilities and available services. All fees and
charges must be reasonably related to services actually
furnished.

Park owners must provide a 90-day written notice to tenants who
do not have leases, prior to an increase in rent or other charges.

A copy of all rules and regulations must be furnished to tenants
at the commencement of occupancy. The rules must be posted in the
park and cannot be changed until all tenants receive at least 30
days prior written notice. Owners may not adopt unreasonable
rules. Late rent payment charges are limited to no more than 5
percent of any unpaid balance after a 10 day-grace period.

Mobile home park tenants enjoy many of the same legal rights as
apartment tenants. For example, the warranty of habitability
requires the owner to maintain properly all common areas and
roads in the park. Owners may not discriminate against families
with children.

Park tenants have the right to sell their mobile homes within the
park during the lease period on prior notice to the owner. An
owner who rejects a tenant's prospective purchaser must inform
the tenant in writing of the reasons for the rejection. A tenant
may recover legal costs and attorney's fees if it is found that a
park owner acted in bad faith in withholding permission to sell.

Park owners cannot require tenants to pay them a commission or
fee in connection with the sale of a mobile home unless the park
owner actually acts as a sales agent pursuant to a written
contract.

Owners may not foster park monopolies. For example, in an effort
to control park laundry facilities, an owner cannot bar an
outside contractor, hired by the tenant, from installing a
washing machine in the tenant's home.

A mobile home tenant may sue a park owner for actual damages if
the owner violates the tenant's rights. (Real Property Law Sec.
233)


LOFT TENANTS

Commercial buildings located in certain areas in New York City
which on December 1, 1981 were occupied as the home of three or
more families since April 1980, must comply with the city's
building code. The costs of compliance will be passed on to
tenants through rent increases over a 10 or 15 year period. Loft
tenants are afforded the protections of the Rent Stabilization Law.

Tenants have the right to sell improvements they have made to
their lofts. They must first offer to sell the improvements to
their landlord at fair market value. If the landlord refuses the
offer, the loft tenant may sell the improvements to the incoming
tenant.

Tenants should bring complaints to the attention of the New York
City Loft Board. (Multiple Dwelling Law, Article 7-c)


RESIDENTIAL HOTEL TENANTS

An investigation by the Attorney General's Office demonstrated
that many New York City apartment houses are masquerading as
hotels to take advantage of hotel stabilization status. Hotels
that no longer provide customary hotel services (maid service,
linens, furnishings and front desk) may be placed under apartment
stabilization by DHCR. Hotels mat no longer charge a free market
rent when an apartment becomes vacant, but are limited to
increases prescribed by the Rent Guidelines Board. (L. 1983 ch.
403 and 448).


FOR FURTHER INFORMATION

The entire rent regulatory system is administered by the State
Division of Housing and Community Renewal. Their offices of rent
administration are listed below:


CENTRAL OFFICES

New York City
One Fordham Plaza
Bronx, NY 10458
[phone]

Office of Rent Administration
Queens Rent Office
92-31 Union Hall Street
Jamaica, N.Y. 11431
[phone]


DISTRICT RENT OFFICES

Lower Manhattan
156 William Street
New York, N.Y. 10007
[phone]

Upper Manhattan
Adam Clayton Powell,
State Office Bldg.
163 W. 125th Street,
New York, N.Y. 10027
[phone]

Brooklyn
250 Schermerhorn Street
Brooklyn, NY 11201
[phone]

Staten Island
350 St. Marks P1., Room 105
Staten Island, N.Y. 10301
[phone]

Nassau County
50 Clinton Avenue,
6th fl. - Room 605
Hempstead, N.Y. 11550
[phone]

Westchester County
55 Church Street, 3rd fl.
White Plains, N.Y. 10601
[phone]


RENT HOTLINE: [phone]
(rent stabilization & rent control)


HARASSMENT UNIT

156 Williams Street
New York, NY 10007
[phone]

Albany
Hampton Plaza
38-40 State Street
Albany, NY 12207
[phone]

Buffalo
Ellicott Square Bldg.
295 Main Street, Rm. 446
Buffalo, N.Y. 14203
[phone]


OTHER AGENCIES

New York State Public Service Commission
400 Broome Street, Fifth Floor
New York, NY 10013
[phone]
(utilities)

New York State Energy Office
Two Rockefeller Plaza
Albany, NY 12223
[phone]
(energy)

State of New York, Department of State
Division of Licensing Services
270 Broadway
New York, NY 10007
[phone]
(real estate brokers, agents)


Additional free copies of Revised Edition Tenant's Rights are
available from the Office of Public Information, New York State
Department of Law, 120 Broadway, New York, NY 10271 or from any
regional office of Attorney General Robert Abrams.

Written by Assistant Attorney General Sandy Mindell in
conjunction with John Corwin, Assistant Attorney General in
charge of the Consumer Frauds and Protection Bureau.

Produced for the Attorney General by the Office of Public
Information, Joan Libby, Director.


OFFICES OF THE ATTORNEY GENERAL

The Capitol
Albany, New York 12224                          [phone]

120 Broadway
New York, New York 10271                        [phone]

59-61 Court Street, 7th Floor
Binghamton, New York 13901                      [phone]

65 Court Street
Buffalo, New York 14202                         [phone]

300 Motor Parkway
Hauppauge, New York 11788                       [phone]

190 Willis Avenue
Mineola, New York 11501                         [phone]

Adam Clayton Powell Jr. State Office Building
163 West 125 Street
New York, New York 10027                        [phone]

70 Clinton Street
Plattsburgh, New York 12901                     [phone]

235 Main Street
Poughkeepsie, New York 12601                    [phone]

144 Exchange Boulevard
Rochester, New York 14614                       [phone]

615 Erie Boulevard West
Suite 102
Syracuse, New York 13202                        [phone]


207 Genesee Street
Utica, New York 13501                           [phone]

317 Washington Street
Watertown, New York 13601                       [phone]

202 Mamaroneck Avenue
White Plains, New York 10601                    [phone]

===========================================================
===========================================================

Court and Complaints:

           1: Selected cases - NYS Court of Appeals
           2: Howcourt
           3: Tenguide

_________________________________________________________________________
Selected cases - NYS Court of Appeals:

           1: Alcoma Corp. v. Div. of Hous. and Community Renewal, 79 N.Y.2d
              834 (1992)
           2: Koch v. Brian, 1994 N.Y. Int. 166
           3: Bryant Avenue Tenants' Assoc. v. Koch, 1994 N.Y. Int. 213
           4: relating to Bryant Ave. v. Koch
           5: Century Tower Assocs. v. NYS Div. of Housing and Community
              Renewal, 83 N.Y.2d 819
           6: Tenants of Hyde Park Gardens v. DHCR (1989)
           7: Manocherian v. Lenox Hill Hospital, 1994 N.Y. Int. 153
           8: Met Council, Inc. v. Crosson, 1994 N.Y. Int. 170
           9: Nestor v. McDowell, 81 N.Y.2d 410 (1993)
          10: Rent Stabilization Ass'n of New York City, Inc. v. Higgins,
              83 N.Y.2d 156, 630 N.E.2d 626, 608 N.Y.S.2d 930 (1993)
          11: Andrew Duell v. Liza Condon, 1995 N.Y. Int. 12. February
              9, 1995
          12: Jacqueline S. v. City of New York, 81 N.Y.2d 288, 614 N.E.2d
              723, 598 N.Y.S.2d 160 (1993). May 6, 1993
          13: Liberman v. Gelstein, 80 N.Y.2d 429, 605 N.E.2d 344, 590
              N.Y.S.2d 857 (1992). November 24, 1992

_________________________________________________________________________
_________________________________________________________________________

Alcoma Corp. v. Div. of Hous. and Community Renewal, 79 N.Y.2d 834 ...

Alcoma Corp. v. New York State Div. of Hous. and Community Renewal,
79 N.Y.2d 834 (1992)

IN THE MATTER OF ALCOMA CORP., APPELLANT, v. NYS
DIVISION OF HOUSING AND COMMUNITY RENEWAL AND MARTHA
BEDFORD, RESPONDENTS.
79 N.Y.2d 834, 558 N.E.2d 79, 580 N.Y.S.2d 181 (1992).
January 9, 1992

1           No.    82      SSM 27
Decided January 9, 1992

This memorandum is uncorrected and subject to revision before
publication in the New York Reports.

Submitted by Jeffrey Turkel, for Appellant.
Submitted by Lawrence Alexander, for Respondent DHCR.
Submitted by Stewart L. Levy, for Respondent Bedford.

MEMORANDUM:

          The order of the Appellate Division should be affirmed,
with costs, and the certified question not be answered as
unnecessary.

          Petitioner -- the owner of a previously rent controlled
apartment -- served, by mail, a DC-2 notice on the first rent
stabilized tenant in occupancy, informing the tenant of its right
to file a Fair Market Rent Appeal.  When the tenant thereafter
filed such an appeal, petitioner challenged it on timeliness
grounds, arguing that the former Rent Stabilization Code required
that the appeal be filed within ninety days of the tenant's
receipt of the DC-2 notice even though the notice was not served
by certified mail.  The New York State Division of Housing and
Community Renewal ("DHCR") ultimately rejected this contention.
Petitioner contends that it erred in doing so.  We disagree.

Section 26A of the former Code provides that the owner of a
previously rent controlled apartment "shall" serve a DC-2 notice
upon the first rent stabilized tenant in occupancy "by certified
mail" [emphasis supplied].  Section 25B then provides that the
tenant must file its Fair Market Rent Appeal "within ninety (90)
days after [it] receives the [DC-2 notice] as required by Section
26A * * *" [emphasis supplied].  DHCR interpreted these
provisions as requiring that the owner serve the DC-2 notice by
certified mail before the ninety day limitation period for filing
a Fair Market Rent Appeal commences to run.  Inasmuch as this
interpretation is neither unreasonable nor irrational, there is
no basis for disturbing it (see, Matter of Salvati v Eimicke, 72
NY2d 784, 791).

          We have examined petitioner's remaining contentions and
find them to be without merit.

*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *

On review of submissions pursuant to section 500.4 of the Rules,
order affirmed, with costs, in a memorandum.  Question certified
not answered as unnecessary.  Chief Judge Wachtler and Judges
Simons, Kaye, Alexander, Titone, Hancock and Bellacosa concur.

_________________________________________________________________________

Koch v. Brian, 1994 N.Y. Int. 166

Koch v. Brian, 1994 N.Y. Int. 166

In the Matter of Alfred Koch,
                   Respondent,

v.

State of New York Division of
Housing and Community Renewal,
Office of Rent Administration,
                   Appellant

1994 N.Y. Int. 166
October 25, 1994

2    No.   152 [1994 NY Int. 166]
Decided October 25, 1994

This opinion is uncorrected and subject to revision before
publication in the New York Reports.

     Martin B. Schneider, for appellant.
     Submitted by Jeff Klein, for respondent.

MEMORANDUM:

     The order of the Appellate Division, insofar as appealed
from, should be affirmed with costs.

     Petitioner is the owner of rental property subject to the
Emergency Tenant Protection Act (ETPA), which is administered by
respondent Division of Housing and Community Renewal (DHCR).
After a formal tenant complaint, a DHCR district rent
administrator on January 23, 1987 ordered petitioner to make
seven repairs within 30 days and directed a rent reduction
pursuant to the Tenant Protection Regulations (9 NYCRR 2503.4)
until compliance was demonstrated, warning that failure to comply
could result in "additional penalties."

     In early 1989, the tenants filed an affidavit of
noncompliance, prompting an inspection.  Petitioner claimed the
violations had been corrected, but by letter dated November 13,
1989, DHCR advised him that this was not the case.  Petitioner
was notified of a noncompliance hearing to be held November 17,
1989, and that he could be subject to a civil penalty of "at
least $250.00" for "each offense."

     Following the hearing, DHCR's rent commissioner found
petitioner had made some, but not all, of the repairs mandated by
the 1987 order and imposed a penalty of $3000--$1000 for
violating the order to make four repairs (at $250 for each
violation) and $2000 for the additional two years during which
the conditions continued.  The order warned that "any further
violation of the orders or any part thereof shall result in a
civil penalty of $1,000 for each such violation," and that "each
day each violation continues may constitute a separate
violation."

     Petitioner commenced this article 78 proceeding seeking
annulment of the agency's determination or reduction of the
penalty.  The Appellate Division reduced the fine to $1000,
ruling that DHCR could not impose more than a $250 fine for each
of the four violations of the order.  DHCR appealed to this
Court, contending that it was within the agency's authority to
impose the cumulative fines.  We agree with the Appellate
Division that passage of time alone did not operate to create a
new offense supporting the cumulative fines.

     ETPA § 12a(3)(i), pursuant to which DHCR imposed the
penalty on petitioner, states that if an owner is found by the
commissioner to have violated an order of the division the
commissioner may impose by administrative order after hearing, a
civil penalty in the amount of two hundred and fifty dollars for
the first such offense and one thousand dollars for each
subsequent offense.  (See also, McKinney's Uncons Laws of NY
§ 8632[a][3][i]; 9 NYCRR 2506.2[c][i].)  Under the plain
language of the statute on which DHCR based its order, an
"offense" arises only upon a determination after a hearing that
an agency order has been violated.  A first offense subjects the
owner to a civil penalty of $250, while "each subsequent offense"
may result in a fine of $1000.  DHCR's imposition of a $3000
penalty instead of a $1000 penalty (for four violations of the
order, at $250 per violation) therefore contravened the statute,
which the agency is without authority to do.

     Statutes authorizing escalating penalties are created not to
generate income but to compel prompt performance of a duty.  The
conduct of DHCR in this case failed to further that purpose.
While ordering petitioner to make repairs within 30 days of the
initial order, DHCR failed for nearly three years to schedule the
hearing required by statute before the first offense could be
found and additional penalties thereafter sought.  Only by
adhering to the statutory procedure could DHCR seek additional
penalties for petitioner's continuing failure to make the
repairs.

*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *

*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *

Order, insofar as appealed from, affirmed, with costs, in a
memorandum.  Chief Judge Kaye and Judges Simons, Titone,
Bellacosa, Smith, Levine and Ciparick concur.

_________________________________________________________________________

Bryant Avenue Tenants' Assoc. v. Koch, 1994 N.Y. Int. 213

Bryant Avenue Tenants' Assoc. v. Koch, 1994 N.Y. Int. 213
Bryant Avenue Tenants' Association, et al.,
Appellants,

v.

Edward I. Koch, &;c., et al.,
Respondents
(and five related actions.)1994 N.Y. Int. 213

December 8, 1994

1     No.   202 [1994 NY Int. 213]
Decided December 8, 1994

This memorandum is uncorrected and subject to revision before
publication in the New York Reports.

     Andrew Scherer, for appellants.
     Iris J. Korman, for respondent DHCR.
     Joseph L. Forstadt, for respondents RSA and Katz.
     Marcia P. Hirsch, for respondent Hyde Park Associates.

MEMORANDUM:

     The order of the Appellate Division should be modified,
without costs, in accordance with this memorandum, and, as so
modified, affirmed.   The certified question should be answered
in the negative.

     The Division of Housing and Community Renewal's Rent
Stabilization Code (9 NYCRR § 2522.4[a][8]) permits the
collection of temporary retroactive rent increases of up to 6%
annually in addition to collection of prospective, permanent rent
increases of up to 6% annually for major capital improvements
(MCIs).  This regulation authorizes landlords to recoup arrears
accumulated during the period of administrative delay which
occurs in the processing of applications for MCI rent increases,
from the filing of the landlord's MCI application until the
issuance of the order granting the permanent MCI increase.
However, because the regulation permits the collection of an
aggregate increase in rent in excess of 6% in a single year, we
now hold that it violates Rent Stabilization Law § 26-511(c)(6).

     Section 26-511 (c)(6) is clear on its face: "[t]he
collection of any increase in the stabilized rent for any
apartment * * * shall not exceed six percent in any year * * *
with collectability of any dollar excess above said sum to be
spread forward in similar increments."  Thus the statute
unequivocally places a ceiling on the total increased rental
amount that may be collected in a given year--spreading the
excess forward, thereby protecting tenants from precipitous rent
increases.  DHCR's regulatory scheme permits collection of up to
a 12% increase in a single year, thus exceeding the statutory
ceiling.  The regulation would thereby violate one of the primary
purposes of the Rent Stabilization Law "to protect tenants from
eviction as a result of rapidly spiraling rent increases" (Matter
of Ansonia Residents Assn. v New York State Div. of Hous. &
Community Renewal, 75 NY2d 206, 216).  Moreover, the regulation
leaves little, if any, scope to the statutory directive that
collection of any "dollar excess" over 6% is to be spread forward
(Rent Stabilization Law § 26-511 [c] [6]).  Consequently,
the regulation cannot be upheld.

     In contrast, the merger of MCI rent increases into the base
rent of stabilized tenants pursuant to the Rent Stabilization
Code (9 NYCRR § 2522.4[a][8]), and any resulting compounding
effect caused by the application of rent guideline increases to
the increased base rent, is proper under Rent Stabilization Law
§ 26-511 (c) and this Court's decision in Matter of Ansonia
Residents Assn. v New York State Div. of Hous. & Community
Renewal (supra).  The practice of merging the increase into the
base rent was implicitly condoned by Ansonia and is, in any
event, consistent with the intent of the Rent Stabilization Law
because it provides owners with an incentive to make improvements
by assuring them an adequate return on their investment including
recovery of additional expenses likely to be incurred in
maintaining such improvements.

*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *

Order modified, without costs, in accordance with the memorandum
herein and, as so modified, affirmed.  Certified question
answered in the negative.  Chief Judge Kaye and Judges Simons,
Titone, Bellacosa, Smith, Levine and Ciparick concur.
_________________________________________________________________________


relating to Bryant Ave. v. Koch

In this document relating to the BRYANT AVENUE matter.

1.   Decision of the Appellate Division, 1st Dept.
2.   Leave to Appeal to the Court of Appeals
3.   Decision of the NYS Court of Appeals

==========================================================

APPELLATE DIVISION, FIRST DEPARTMENT


Murphy, P.J., Sullivan, Wallach, Asch, Rubin, JJ.
47423-
47424-
47425N    Bryant Avenue Tenants'
          Association, et al.,
               Plaintiffs-Respondents,
               -against-
          Edward I. Koch, etc., et al.,
               Defendants-Appellants.
          (And Five Related Actions)

Orders of the Supreme Court, New York County (Elliott Wilk, J.),
entered July 9, 1991, which, inter alia, granted a preliminary
injunction enjoining defendant 69 Tiemann's Owner's Corp. from
collecting rent increases attributable to Major Capital
Improvements in excess of 6% per year and denied motions by
defendants Hyde Park Associates and Regents Park Associates to
vacate or modify preliminary injunctions previously entered
'which enjoined them from attempting to collect rent increases
attributable to MCIs in excess of 6% per year and from merging
MCI rent increases into the permanent rent base, are reversed, on
the law and facts to the extent appealed from, the motion by
plaintiffs denied and the motions by defendants granted, without
costs or disbursements.

We recognize, as does the dissent, that the award of MCI rent
increases which are merged into the stabilized base rent has been
upheld by this court and the Court of Appeals.  Thus, we have
previously noted, "The question of whether an MCI increase
becomes a permanent part of the stabilized base rent has just
been determined in the landlord's favor in Matter of Ansonia
Residents Assn. v. New York State Div. of Hous. & Community
Renewal (75 NY2d 206)."  (Matter of Ansonia Assocs. v. State Div,
of Housing & Community Renewal, 157 AD2d 583, 584).

However, unlike the dissent, we do not find any violation of the
Rent Stabilization Law in the award of temporary retroactive rent
increases of 6% annually in addition to the prospective MCI
increases.  As recognized by the dissent, applications by
landlords for rent increases based on Major Capital Improvements
can take the agency as long as three years to process and
approve.  It would not only be unfair but would also act against
the purposes of the Rent Stabilization Law to disallow earned
increases during these periods.  Such a policy, in the face of
the long delays inherent in this government bureaucracy, would
encourage a disinclination by landlords to expend any large sums
of money in improving properties.

Further, the law prohibits increases in excess of 6% per year.
However, MCI increase, are effective as of the first rent payment
occurring 30 days after the filing of the application by the
landlord.  Thus, the agency, in awarding temporary retroactive
rent increases, is simply allocating, albeit some time in the
future, a 6% increase FOR THAT PERIOD OF TIME immediately after
the application, and the tenant, therefore, does not pay in
excess of 6% PER YEAR.

The Legislature is certainly aware of this practice of the agency
in awarding temporary retroactive rent increases, and has not
made any changes in the law expressly forbidding such practice.
This action of the legislative authority, in not "choosing to
amend the statute to provide otherwise, has acquiesced in this
construction" (Matter of Ansonia Residents Assn. v. New York
State Div. of Housing & Community Renewal, 75 NY2d 206, 215).
All concur except Wallach and Rubin, JJ. who dissent in a
memorandum by Wallach, J. as follows:

WALLACH, J. (dissenting)

Under the New York City Rent Stabilization Law ("RSL", chapter 4
of Title 26, New York City Administrative Code), rent adjustments
are established on an area-wide basis by a Rent Guidelines Board
("RGB"), based upon economic conditions, cost of living indices
and other factors in the neighborhood in question (Sec. 26-510).
The law further provides for rent increases on a building-wide
basis, to compensate a landlord for major capital improvement
("MCI") expenditures, where appropriate application is filed with
the Division of Housing and Community Renewal ("DHCR"), in
accordance with that agency's regulatory procedures (Sec. 26-511;
see DHCR's Rent Stabilization Code, 9 NYCRR Sec. 2522.4[a]).

The RSL permits the DHCR Commissioner to consider landlord
applications for increases in excess of the level or fair rent
increase established under this law" (Sec. 26-511(c)[6]).
Collection of any such increase from tenants is to be spread
forward in annual increments, but not to exceed 6% of the legal
regulated rent in any one year.  The regulation (9 NYCRR Sec.
2522.4[a][8]) speaks in terms of adding this annual increment to
the legal regulated rent as a "permanent, prospective rent
increase".  An additional increment of up to 6% may be exacted
for any "temporary retroactive portion of such rent increase."
The temporary retroactive increase is designed for the landlord's
recoupment of arrears during the period of delay from filing of
his MCI application until the issuance of an order by the
Commissioner.

Among the defendants herein are landlords who sought to collect
MCI rent increases amounting to a maximum 6% permanent increase
in the legally regulated rent level each year until their costs
of the improvements were fully amortized, plus a temporary
increase of no more than 6% per year to amortize arrears during
the period of agency delay in processing the applications.
Plaintiffs, who are affected tenants and tenants' associations,
have challenged the regulatory procedure whereby computation of
MCI rent increases results in an annual rent increase exceeding
the RGB's annually established guidelines for rent adjustments.
They further argue that the agency policy of allowing MCI
increases to be merged into the permanent rent base means that a
maximum 6% increase for the spillover the following year would
result in a compounding effect that would actually raise the
following year's rent increase to more than a simple 6%.
Finally, plaintiffs object to the regulations which allow
separate 6% increases for permanent, prospective and temporary
retroactive recoupments in the same year, arguing that such a
double increase is nowhere authorized under the RSL.

The IAS court agreed, and issued preliminary injunctions against
implementation of such procedures.  I would modify that ruling,
with regard to the permanent, prospective increase, on the ground
that the law on this issue has already been settled in this court
and in the Court of Appeals.

In Matter of Ansonia Residents Assn. v. New York State Div. of
Hous. & Community Renewal (75 NY2d 206, 216), the Court of
Appeals upheld the permanence of the MCI-based rent increase
because a rent increase on the basis of a major capital
improvement does not represent payment of a finite debt which the
tenant owes to the owner, but rather is payment for a service
which the tenant continues to receive after the owner has
recouped the initial cost of the improvement.

Rather than simply compensating an owner for his investment
outlay, Sec. 26-511(c) was designed to create an incentive for
such major capital improvements by assuring the owner an
adequate. return on his investment, to include the continuing
expense of maintaining such improvements after recoupment of
initial construction costs (id.; Matter of Versailles Realty Co.
v. New York State Div. of Hous. & Community Renewal, 76 NY2d 325,
329). In the wake of the Ansonia ruling, this court has
acknowledged that the "question of whether an MCI increase
becomes a permanent part of the stabilized base rent has [now]
been determined in the
landlord's favor" (Matter of Ansonia Assocs. v. State Div. of
Hous. & Community Renewal, 157 AD2d 583, 584).

To read the statute as limiting a landlord to a 6% ceiling
covering a combined MCI recovery and the unrelated rent
guidelines adjustment would force the landlord to absorb the
lion's share of the cost of such improvements, even though those
improvements inure to the permanent benefit of tenants.  The rent
guidelines and MCI adjustments were established for two
completely distinct purposes.  Neither one contradicts, nor
precludes, the other.  That issue would appear no longer open to
debate.

As to the issue of "compounding", the statute allows a maximum of
6% in any given year, with the balance to be "spread forward in
similar [annual] increments".  Does this mean a fixed amount,
equal to no more than 6% of the pre-MCI rent for each year of the
amortization, or does it allow for each year's 6% increment to be
based upon the previous year's adjusted rent? Plaintiffs would
read "similar increments" as meaning something less than 6% in
subsequent years, so that the sum of two years' compounded
interest would not total more than 12%, the sum of three years
not more than 18%. etc.  By compounding over a 3-year period, the
cumulative increments of 6% each year would total 6% after one
year, 12.36% after two years, and 19.1% after three years   By
plaintiff's logic, each year's MCI increment should be calculated
as a simple 6% of the pre-MCI rent, until the MCI amortization is
satisfied.  Otherwise, compounding should limit the second year
increase to no more than 5.66%, and the third year to no more
than 5.357%, etc.

Bearing in mind the legislative desire to create an incentive for
such investment, I do not believe plaintiffs' interpretation
could have been the legislative intent of "similar increments".
Questions regarding the appropriate calculation of interest
accrual should be resolved in light of particular industry
practice (Matter of American Sav. Bank v. Michael, 64 NY2d 357,
405).  It need simply be noted that as with RGB adjustments, once
any increase becomes part of the permanent rent base, any
subsequent annual increase will necessarily have a compounding
effect.  That axiom should not invalidate the statutorily fixed
ceilings of subsequent increases.

Plaintiffs' final point challenges the right of the DHCR
Commissioner to authorize by regulation, in 9 NYCRR Sec.
2522.4(a)(e), the collection of up to 6% in the form of a
temporary retroactive increase for arrears, in addition to the
permanent, prospective 6% annual increase called for in RSL Sec.
26-511(c)(6).  Defendants' argument is that the tenants have
already begun to enjoy the benefits of the improvements, even
though there might be considerable delay before the effective
date of the compensatory order.  Assuming no delay, rent cannot
be adjusted to reflect MCI earlier than 30 days after the
landlord files his application, but as a practical matter, the
processing of such an application can take up to 1-3 years before
an order is issued.  Simple fairness, defendants argue, dictates
a retroactive award, albeit "temporary" (i.e., not effecting a
permanent increase in the rent base), to cover that period.

The problem is that by awarding such a "temporary" increase
alongside a permanent, prospective increase, the rent is
necessarily increased by an arbitrary figure of up to an
additional 6% for each month of delay.  Where the statute places
a ceiling of 6% on MCI-based increases in a given year, this
regulatory scheme could effectively double the height of that
ceiling for up to three years.  Unlike the earlier issues
discussed, no portion of the RSL can be identified that would
allow such an additional increment, albeit temporary, by
regulation.  The statute speaks in terms of spreading the MCI
rent increase forward; it is silent on the regulation's novel
device of simultaneously reaching backward to recoup arrears.
Absent legislative authorization to this effect, the landlord
will simply have to look to the permanent nature of his
prospective increase in order to make up any losses suffered by
reason of the administrative delay.

Accordingly, I would modify the IAS court order to the extent of
dismissing plaintiffs' challenges to the prospective aspect of
the MCI rent increase (its merging into the rent base, and its
compounding of annual increases), and I would otherwise affirm
the order upholding plaintiffs' challenge to the regulatory
extension of a landlord's right to add to the MCI increase on a
temporary basis for recoupment of arrears attributed to
administrative delay.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT,
APPELLATE DIVISION, FIRST DEPARTMENT

_________________________________________________________________________

ENTERED:  SEPTEMBER 28, 1993


Clerk

DENNIS J. SAFFRAN
Attorney for the Respondent
Division of Housing and Community Renewal
One Fordham Plaza
Bronx, New York 10458
[phone]
Iris J. Korman, of Counsel

Andrew Scherer, Esq.
Legal Services for New York City
330 Broadway, New York, NY 10013

Robert M. Saltznan, Esq.
319 Broadway, Suite 400
New York,.NY 10007

The Legal Aid Society
11 Park Place  18th Floor
New York, NY  10007
Attn: Scott A. Rosenberg

Harlem Legal Services
144 West 125th Street
New York, NY 10027

================================================================
The following is the Motion for Leave to Appeal (from the

The following is the Motion for Leave to Appeal (from the
Appellate Division) to the NYS Court of Appeals.

*****

SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE DIVISION: FIRST DEPARTMENT
                                  x
BRYANT AVENUE TENANTS' ASSOCIATION,
et al., on behalf
of themselves, and all others
similarly situated,
               Plaintiffs-Respondents,

          -against-

EDWARD I. Koch, as Mayor of the City
of New York, et al.,
               Defendants-Appellants.
                                  x

STATE OF NEW YORK )
                    )ss:
COUNTY OF NEW YORK)

     ANDREW SCHERER, an attorney duly admitted to practice law in
the Courts of the State of New York, affirms:

     1.   I am an attorney with Legal Services for New York City,
and am one of the attorneys for the Plaintiffs-Respondents-
Appellants ("Plaintiffs") in this matter.  I am fully familiar
with the facts and circumstances of this matter.  I make this
affirmation in support of Plaintiffs' motion for leave to appeal
to the Court of Appeals pursuant to CPLR Sec. 5602(b)l. and Sec.
600.14 of the Rules of the Supreme Court, Appellate Division,
First Department.

     2.   The following questions are presented for review:

     a)   Whether N.Y. Unconsol. Laws Sec. 26-511(c)(6) (McKinney
1987 and Supp. 1992) of the Rent Stabilization Law, which
provides that collection of rent increases for Major Capital
Improvements "shall not exceed six percent per year," prohibits
the New York State Division of Housing and Community Renewal from
authorizing collection of combined permanent and temporary rent
increases for Major Capital Improvements that exceed six percent
and total up to twelve percent per year.

     b)   Whether DHCR's practice of permitting MCI rent
increases to merge into the base rent of rent stabilized tenants
and to be regularly compounded by rent guidelines rent increases
violates the Rent Stabilization Law.

     3.   The Supreme Court, New York County (Wilk, J.) answered
these questions in the affirmative.  In an unsigned opinion, this
Court reversed the Supreme Court and answered these questions in
the negative.  Justices Wallach and Rubin dissented from the
majority opinion with respect to whether the combined temporary
and permanent rent increase for Major Capital Improvements may
exceed six percent.

     4.   This Court should grant permission to appeal the
Decision and Order of the Appellate Division, First Department
for three compelling reasons.  First, Justices Wallach and
Rubin's dissent from the majority opinion reflects sharply
divergent views in this Court.  Second, the issues presented are
of great public importance.  And third, tenants will suffer
irreparable harm pending a final judgment in Supreme Court if an
appeal is delayed.

     5.   Because two Justices dissented on a question of law,
the Plaintiffs would be able to appeal this Order to the Court of
Appeals as of right if it was a final order. CPLR Sec. 5601(a).
The rationale for permitting an appeal as of right of a final
order from which there are two dissents applied equally here.
"[T]he Court of Appeals was created, and sits, only to review
matters embracing the essential merits of the controversy..."
Cohen and Karger, Powers of the New York Court of Appeals, Sec.
10.  The Appellate Division has now ruled on two of the central
legal issues presented by Plaintiffs.  These issues are strictly
legal issues involving the interpretation of specific provisions
of the Rent Stabilization Law.  With respect to one of the
issues, this court was sharply divided.  While the litigation
involves other claims that have not been ruled upon, there is no
benefit to awaiting final judgment on the entire complaint before
an appeal is hears.  Since the issues for which permission to
appeal is sought are strictly questions of statutory
interpretation, further proceedings in the Supreme Court will not
add anything to the record what will affect an appeal to the
Court of Appeals.

     6.   Indeed, if Plaintiffs fail to obtain a ruling on these
issues from the Court of Appeals at this juncture, they, and
others similarly situated may be forced to pay rents which could
later be found to be illegal by the Court of Appeals.  Delay will
thus only "be likely to introduce confusion into the body of
law."  See, Cohen and Karger, Powers of the New York Court of
Appeals Sec. 82, citing, Sciolina v. Erie Preserving Company, 151
N.Y. 50, 53 (19  ).

     7.   Moreover, the issues presented for appeal are of great
public importance.  Rent increases for Major Capital Improvements
have long been a source of litigation, legislative activity and
advocacy, and policy debate.   See, e.g.,  Ernst & Whinney &
Speedwell, Inc., "Review of the Major Capital Improvement
Program," prepared for DHCR (June 1989); Ansonia Residents
Association v. Division of Housing and Community Renewal, 75
N.Y.2d 206, 551 N.Y.S. 2d 871, 551 N.E.2d 206 (1989).  This Court
has now ruled in this matter on hotly contested issues regarding
interpretation of the Rent Stabilization Law, issues which affect
the right of tenants in, and landlords of, the more than 900,000
rent stabilized housing units in New York City.  Tenants in New
York City already pay significant portions of their household
income for rent.  In 1991, 24.4% of renters paid over 50% of
their household income for rent.  Task Force on City Owned
Housing, "Housing in the Balance:  Seeking A Comprehensive Policy
For City-Owned Housing," p. 55.  Low-income tenants pay an even
greater percentage for rent.  The median asking rent for vacant
apartments in 1991 was $600, while the shelter allowance for a
family of four receiving public assistance was $312.  Id., p. 53.
If permanent and temporary rent increases for Major Capital
Improvements can be collected at a combined rate of up to twelve
percent, and if these increases can be merged into base rents and
compounded by an ever-escalating spiral of rent guidelines
increases, tenants, especially low-income tenants, will be
threatened with displacement from their homes.

     8.   The Court below has granted over 130 preliminary
injunction motions to tenants throughout New York City which
raise the same or similar issues to those addressed by this Court
in its decision and order in this appeal.  In order to satisfy
the standard for a preliminary injunction, these tenants
convincingly demonstrated to the court below that they face
irreparable harm if unable to obtain a preliminary injunction.
After this Court's decision and order, some of these tenants may
now face motions to vacate or modify their preliminary
injunctions which, if granted, can place them in imminent threat
of irreparable harm.

     9.   The Court of Appeals is not a stranger to this
litigation.  In 1987 and 1988, this Court and the Court of
Appeals affirmed Orders of Supreme Court, New York County, which
denied motions to dismiss, and granted preliminary injunctions
and class certification to the Plaintiffs.  Bryant Avenue tenants
Ass'n v. Koch, 127 A.D.2d 430 (1st Dept 1987), aff'd, 71 N.Y.2d
856 (1988).  This Court has now sharply divided over the proper
interpretation of the Rent Stabilization Law.  The issues
presented for appeal are of great public importance and, if
unresolved by the Court of Appeals until some future date, could
cause confusion and irreparable harm.  Thus, permission to appeal
should be granted.

Dated:    New York, New York
          November   , 1993


ANDREW SCHERER, ESQ.

================================================================
The following is the original Tenant Alert and the decision of
the NYS Court of Appeals in the Bryant Avenue case.

*****

TENANT ALERT !!!

-- MCI Law Collectibility Altered by NYS Court of Appeals

-- Decision Will Affect Rents Of Many Rent Regulated Tenants.

-- Tenants Urged to Seek Legal Guidance Regarding Current MCI
Liability or if Previous Payments may be Recouped

----------------------

In what surely will have major ramifications for New York City
rent regulated tenants, the NYS Court of Appeals in a decision
handed down December 8, 1994 substantially altered the method
of calculating MCI (Major Capital Improvement) rent increases.

In "Bryant Avenue v. Koch", a case filed in the early 1980's,
the Court of Appeals modified the underlying Appellate Division
ruling to the extent of determining that the 6% yearly cap
for MCI rent increases means a limit of 6% for the combined
retroactive and prospective portions of the rent increase.

The NYS Division of Housing and Community Renwal (DHCR), the
state agency charged with administering regulated rental units
had, up till now, allowed an increase of 6% prospectively
(from the date the rent increase order was issued) and an
additional 6% to cover any accumulated arrears of the retroactive
period (from the time the owner applied for the rent increase
to the time it was granted). The invalidated regulation
effectively allowed an immediate increase of 12% per year.

Any tenant that has been subjected to MCI rent increases over
the years is strongly advised to seek advice and clarification
from a tenant attorney or a competent tenant organization
as to their current liability for MCI rent increases
and also to possibly recalculate any payments previously made.
In particular, tenants are advised to not necessarily follow
landlord interpretations of this issue unless and until verified
by competent advice from tenant interests.

This ruling does not save tenants from the onerous MCI system,
but it may offer slight (if temporary) relief in that the
increases are not applied all at once.

The memorandum from the Court of Appeals is reproduced
in its entirety below.

------------------------------------------------------------

MEMORANDUM

This memorandum is uncorrected and subject to revision
before publication in the New York Reports.

State of New York
Court of Appeals

1     No.   202
Bryant Avenue Tenants'
Association, et al.,
                    Appellants,
v.
Edward I. Koch, &c., et al.,
                    Respondents.
(and five related actions.)


Andrew Scherer, for appellants.
Iris J. Korman, for respondent DHCR.
Joseph L. Forstadt, for respondent RSA and Katz.
Marcia P. Hirsch, for respondent Hyde Park Associates.


MEMORANDUM:

     The order of the Appellate Division should be modified,
without costs, in accordance with this memorandum, and, as so
modified, affirmed. The certified question should be answered in
the negative.

     The Division of Housing and Community Renewal's Rent
Stabilization Code (9 NYCRR section 2522.4[a][8]) permits the
collection of temporary retroactive rent increases of up to 6%
annually in addition to collection of prospective, permanent rent
increases of up to 6% annually for major capital improvements
(MCIs). This regulation authorizes landlords to recoup arrears
accumulated during the period of administrative delay which
occurs in the processing of applications for MCI rent increases,
from the filing of the landlord's MCI application until the
issuance of the order granting the permanent MCI increase.
However, because the regulation permits the collection of an
aggregate increase in rent in excess of 6% in a single year, we
now hold that it violates Rent Stabilization Law section 26-511
(c)(6).

     Section 26-511(c)(6) is clear on its face: "[t]he collection
of any increase in the stabilized rent for any apartment * * *
shall not exceed six percent in any year * * * with
collectability of any dollar excess above said sum to be spread
forward in similar increments." Thus the statute unequivocally
places a ceiling on the total increased rental amount that may be
_collected_ in a given year--spreading the excess forward,
thereby protecting tenants from precipitous rent increases.
DHCR's regulatory scheme permits collection of up to a 12%
increase in a single year, thus exceeding the statutory ceiling.
The regulation would thereby violate on of the primary purposes
of the Rent Stabilization Law "to protect tenants from eviction
as a result of rapidly spiraling rent increases" (_Matter of
Ansonia Residents Assn. v. New York State Div. of Hous. &
Community Renewal_, 75 NY2d 206, 216). Moreover, the regulation
leaves little, if any, scope to the statutory directive that
collection of any "dollar excess" over 6% is to be spread forward
(Rent Stabilization Law section 26-511 [c][6]). Consequently, the
regulation cannot be upheld.

     In contrast, the merger of MCI rent increases into the base
rent of stabilized tenants pursuant to the Rent Stabilization
Code (9 NYCRR section 2522.4[a][8]), and any resulting
compounding effect caused by the application of rent guideline
increases to the increased base rent, is proper under Rent
Stabilization Law section 26-511(c) and this Court's decision in
_Matter of Ansonia Residents Assn. v. New York State Div. of
Hous. & Community Renewal (supra)._ The practice of merging the
increase into the base rent was implicitly condoned by _Ansonia_
and is, in any event, consistent with the intent of the Rent
Stabilization Law because it provides owners with an incentive to
make improvements by assuring them an adequate return on their
investment including recovery of additional expenses likely to be
incurred in maintaining such improvements.

*  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *  *

Order modified, without costs, in accordance with the memorandum
herein and, as so modified, affirmed. Certified question answered
in the negative. Chief Judge Kaye and Judges Simons, Titone,
Bellacosa, Smith, Levine and Ciparick concur,

Decided December 8, 1994
_________________________________________________________________________


Century Tower Assocs. v. NYS Div. of Housing and Community Renewal,...

IN THE MATTER OF CENTURY TOWER ASSOCIATES
v.
THE STATE OF NEW YORK DIVISION

OF HOUSING AND COMMUNITY RENEWAL ET AL.,
AND CENTURY TENANT'S ASSOCIATION,
ET AL.,

83 N.Y.2d 819, 633 N.E.2d 1095, 611 N.Y.S.2d 491 (1994).
March 22, 1994

1 No. 53 [1994 NY Int. 041]
Decided March 22, 1994

---------------------------------------------------------------------------

This memorandum is uncorrected and subject to revision before publication
in the New York Reports.

MEMORANDUM:

The order of the Appellate Division should be affirmed, with costs.
Petitioner owns a high-rise apartment building in Riverdale, New York,
which is subject to the Rent Stabilization Laws (RSL), as well as an
adjacent parking garage. In 1981, a tenant filed a complaint with the New
York City Conciliation and Appeals Board (CAB) -- respondent State Division
of Housing and Community Renewal's (DHCR) predecessor -- alleging he was
being overcharged for his garage parking space by Netherlands Operating
Corp., the operator of the garage under contract with petitioner. In 1983
the CAB, and in 1985 after a de novo hearing the DHCR, determined that the
garage was subject to the RSL and that petitioner was responsible for the
overcharges, established what the lawful charges would have been, ordered a
refund for the complainant tenant, and ruled that its determination applied
to "all tenants similarly situated". In a CPLR article 78 proceeding
challenging the agency's determination, the Appellate Division fully upheld
DHCR's position, and further held that because this garage service was a
building-wide service the determination applied to all tenants of the
building using such service (Matter of Netherland Operating Corp. v
Eimicke, 135 AD2d 352, lv denied 71 NY2d 802).

DHCR thereafter conducted extensive compliance proceedings which resulted
in the issuance of compliance orders concerning "similarly situated"
tenants who rented garage spaces as of the original 1983 CAB order,
established lawful charges, directed refunds of overcharges and imposed
treble damages for overcharges collected after April 1, 1984, the delayed
effective date of the Omnibus Housing Act of 1983 (L 1983, ch 403) which
revised the Rent Stabilization Law. After pursuing unsuccessful
administrative review, petitioner instituted the instant article 78
proceeding; Supreme Court dismissed the petition, agreeing with DHCR that
the pre-April 1, 1984 RSL applied to the claims of the similarly situated
tenants and allowed recovery of all overcharges. The Appellate Division
affirmed (189 AD2d 567). We granted leave to petitioner, and now affirm.

Petitioner contends that the amended RSL, which provides inter alia for a
four year statute of limitations on overcharge complaints (see,
Administrative Code of City of NY § 26-516 [a][2], [g]), should be
applied to and limit the overcharge claims of the similarly situated
tenants because they did not file individual complaints in 1981 (or prior
to April 1, 1984), and, at the earliest, filed them in 1988 when they
responded to questionnaires sent as part of the instant compliance
proceedings. We agree with Supreme Court's reasoning, that the "within
compliance proceedings are not separate but rather are the culmination of
the long circuitous litigation directly traceable to and interconnected
with the original 1981 complaint". Thus, DHCR rationally concluded that the
imposition of overcharge orders for similarly situated tenants in these
compliance proceedings relates back to the original 1981 complaint.

Moreover, petitioner, having represented to its tenants as far back as 1983
that they should continue to pay the rentals "without prejudice to their
rights [to a credit of any overcharge]", is estopped from challenging the
similarly situated tenants' failure to file individual claims.
Consequently, their overcharge claims were reasonably deemed filed before
April 1, 1984, and although resolved thereafter, DHCR correctly applied the
law in effect at the time of the filing, i.e., Rent Stabilization Code
§ 42 (A) (now codified at 9 NYCRR §§ 2520- 2530) (see,
Matter of Lavanant v Division of Hous. & Community Renewal, 148 AD2d 185;
see also, Rent Stabilization Code § 2526.1 [a] [4] [eff. May 1, 1987];
Omnibus Housing Act § 20; contra Matter of J.R.D. Mgt. Corp. v
Eimicke, 148 AD2d 610, lv denied 71 NY2d 802).


Petitioner's claim that DHCR's imposition of treble damages was improper is
also rejected. The Omnibus Housing Act of 1983 provides for treble damages
for overcharges collected after the Act's effective date (April 1, 1984)
unless the owner establishes that the overcharges were not willful (see,
Administrative Code § 26-516 [a]). That section permits imposition of
treble damages to pending overcharge cases where overcharges are willfully
collected after the effective date. There being record support and a
rational basis for DHCR's finding that petitioner failed to establish the
non-willfulness of the overcharges, the imposition of treble damages will
be upheld.

Finally, petitioner is incorrect in claiming entitlement -- in the
calculation of lawful garage charges -- to be credited with the 2.2% annual
rental increase (above guideline increases) afforded to owners of buildings
benefited by RPTL § 421-a tax abatements to compensate for the annual
diminution in tax benefits. DHCR's interpretation of the regulation which
authorizes the 2.2% increase as inapplicable to rental charges on garage
spaces (where the garage does not receive the tax abatement) is rational
and will not be disturbed (see, Matter of Salvati v Eimicke, 72 NY2d 784,
791).

We have examined petitioner's remaining contentions and find them also to
be without merit.

Order affirmed, with costs, in a memorandum. Chief Judge Kaye and Judges
Simons, Bellacosa, Smith, Levine and Ciparick concur. Judge Titone took no
part.

_________________________________________________________________________

Tenants of Hyde Park Gardens v. DHCR (1989)

STATE OF NEW YORK
The Hon. Sol Wachtler, Chief Judge, Presiding


2         No. 68
------------------------------

In the Matter of Tenants of Hyde
Park Gardens, &c.,
          Respondents,

          v.

State of New York, Division of
Housing and Community Renewal,
Office of Rent Administration,
          Appellant.
_________________________________________________________________________

and another proceeding:
Mtr of Hyde Park Associates v. NYSDHCR


The appellant(s) in the above entitled appeal appeared by Dennis
B. Hasher, Esq., Counsel for Division of Housing and Community
Renewal; the respondent(s) appeared by Richard M. Creditor, Esq.

The Court, after due deliberation, orders and adjudges that the
order insofar as appealed from is affirmed, with costs, and
certified question answered in the affirmative for the reasons
stated in so much of the memorandum at the Appellate Division as
related to the issue of rent reduction (140 AD2d 351).  Chief
Judge Wachtler and Judges Simons, Alexander, Titone, Hancock and
Bellacosa concur. Judge Kaye took no part.

The Court further orders that the papers required to be filed and
this record of the proceedings in this Court be remitted to the
Supreme Court, Queens County, there to be proceeded upon
according to law.

I certify that the preceding contains a correct record of the
proceedings in this appeal in the Court of Appeals and that the
papers required to be filed are attached.

Donald M. Sheraw, Clerk of the Court

Court of Appeals. Clerk's Office, Albany,  April 27, 1989

**************************************************************
**************************************************************

APPELLATE DIVISION: SECOND DEPARTMENT

                                                            1353j
                                                             C/ep

__________ AD2d __________              Argued - March 8, 1988

LAWRENCE J. BRACKEN, J.P.
CHARLES B. LAWRENCE
ISAAC RUBIN
SYBIL HART KOOPER, JJ.

_____________________________________

3412E
3412AE

In the Matter of Hyde Park Gardens,
etc., petitioners-respondents-
appellants, v State of New York,             DECISION & ORDER
Division of Housing and Community
Renewal, Office of Rent
Administration, respondent-respondent-
appellant, (Proceeding No. 1)
In the Matter of Hyde Park
Associates, petitioner-appellant-
respondent, v New York State
Division of Housing and Community
Renewal, etc., respondent-respondent-
appellant. (Proceeding No. 2)

_____________________________________


     Max E. Greenberg, Cantor & Reiss. New York, N.Y. (Jerome
     Reiss of counsel), for petitioner-appellant-respondent.

     Richard M. Creditor, Forest Hills, N.Y., for petitioner
     respondents-appellants.

     Dennis B. Hasher, Bronx. N.Y. (Richard Hartzman of counsel),
     for respondent-respondent-appellant.


In two proceedings pursuant to CPLR article 78 for review of a
determination of the New York State Division of Housing and
Community Renewal (hereinafter DHCR), which found that the
landlord, Hyde Park Associates, the petitioner in proceeding No.
2, had failed to maintain required services, but declined to
order a rent reduction, (1) Hyde Park Associates, the petitioner
in proceeding No. 2, appeals from (a) so much of a judgment of
the Supreme Court, Queens County (Lonschein, J.), dated November
13, 1986, as dismissed its petition, denied its notion to
intervene Proceeding No. 1 and granted the petition of the
tenants in Proceeding No. 1 and (b) so much of an order of the
same court dated April 10, 1987, as, upon reargument, adhered to
the original determination; (2) the DHCR cross-appeals from so
much of the judgment as a) granted the petition in proceeding No.
1 to the extent of determining that it erred in not ordering a
rent reduction and (b) remitted the proceeding to the DHCR for a
determination of the rent reduction; and (3) The Tenants of Hyde
Park Gardens, the petitioners in the first Proceeding, cross-
appeal from so much of the judgment as denied their application
to intervene in Proceeding No. 2.  The appeals of DHCR and
Tenants from the judgment brings up for review the order dated
April 10, 1987 (see, CPLR 5517[b].

     ORDERED that the appeal and cross appeals from the judgment
dated November 13, 1986, are dismissed. without costs or
disbursements, as that judgment was superseded by the order of
the same court dated April 10, 1987, made upon reargument; and it
is further,

     ORDERED that the order dated April 10, 1987, is affirmed
insofar as, appealed from and reviewed, without costs or
disbursements.

     The principal issue determined by the DHCR was whether the
tenants of Hyde Park Gardens had sustained a reduction in a
"required service" as defined by the Rent Stabilization Law
(Administrative Code of City of New York Sec. 26-514).
Specifically, the issue determined by the agency was whether
there had been a reduction in security caused by the landlord's
implementation of a new overall security system.  "The question
of what constitutes a required service presents a factual issue
which is to be determined by * * * the administrative agency"
(Fresh Meadows Assoc. v. New York City Conciliation & Appeals
Bd., 88 Misc 2d 1003, 1004, affd 55 AD2d 559, affd 42 NY2d 925).
The DHCR made its determination after a hearing held at the
request of the parties, pursuant to Sec. 26-514 of the
Administrative Code of the City of New York.  Upon our review of
the record. we find, that the determination of the DHCR was
supported by substantial evidence at the hearing.  We further
find that the determination had a rational basis and was not
arbitrary and capricious (see, Matter of Bambeck v. State Div. of
Hous. & Community Renewal. Off. of Rent Admin., 129 AD2d 51, 55;
Villas of Forest Hills, v. Lumberger, 128 AD2d 701, 703; Matter
of Plaza Realty Investors & Queens Blvd. Props Co. v. New York
City Conciliation & Appeals Bd., 111 AD2d 395, 396).  Clearly the
enumerated factors considered by the agency establish that a
rational basis existed for its determination which accordingly
should not be disturbed (see, Matter of Bambeck v. State Div. of
Hous. & Community Renewal. Off. of Rent Admin., supra; see also,
Mid-State Mgt. Corp. v. New York City Conciliation & Appeals Bd.,
112 AD2d 72, affd on opn below 66 NY2d 1032).

     Nor was the agency's determination barred by res judicata or
Collateral estoppel by the prior decision of the New York City
Civil Court.  There was not an identity of issues as the Civil
Court's determination focused on habitability within the complex
generally" whereas the DHCR's decision turned on the
determination that there had been a diminution in a specific
Srequired service".  As previously noted this matter was
precisely within the jurisdiction of the DHCR (see, Fresh Meadows
Assoc. v. New York City Conciliation & Appeals Bd.,  supra).
Moreover, the Civil Court's decision expressly provided it was
"without prejudice to the rights of the parties in their present
pending proceedings before other tribunals".

     Finally, the Supreme Court was correct in remitting the
matter of a rent reduction to the DHCR for a computation of the
appropriate amount thereof.  The agency's determination not to
order a rent reduction constituted an exercise of discretion
which that agency did not possess based upon the mandatory nature
of the language in the Rent Stabilization Law (Administrative
Code Sec. 26-514).  When the agency determines that there has
been a diminution of a "required service", "the commissioner
SHALL so reduce the rent" (Administrative Code Sec. 26-514
[emphasis supplied).


BRACKEN, J.P., LAWRENCE, RUBIN and KOOPER, JJ., concur.


ENTER:
MARTIN H. BROWNSTEIN
Clerk


May 2. 1988    IN RE TENANTS OK HYDE PARK GARDENS v         3412E
               STATE OF NEW YORK; IN RE HYDE PARK           3412AE
               ASSOCIATES v NEW YORK STATE DIVISION
               OF HOUSING AND COMMUNITY RENEWAL
_________________________________________________________________________


Manocherian v. Lenox Hill Hospital, 1994 N.Y. Int. 153

Amir Manocherian, et al., Appellants,

v.

Lenox Hill Hospital, &c., et al.,
Respondents, et al., Defendants

1994 N.Y. Int. 153
October 20, 1994 1 No. 135 [1994 NY Int. 153]
Decided October 20, 1994

----------------------------------

This opinion is uncorrected and subject to revision before
publication in the New York Reports.

Gary M. Rosenberg, for appellants.
Edward S. Kornreich, for respondents.
June Duffy, for Attorney General.
Pacific Legal Foundation, amicus curiae.

BELLACOSA, J.:

Plaintiffs, owners of several New York City rent- stabilized
apartments at issue here, seek summary judgment to declare
Chapter 940 of the Laws of 1984 unconstitutional and related
relief. That enactment requires the owners to offer renewal
leases to defendant-respondent, Lenox Hill Hospital, a not-for-
profit hospital enterprise on the Upper East Side of Manhattan,
for apartments occupied by some of the hospital's employees.
Supreme Court and the Appellate Division upheld the validity of
the statute and plaintiffs appeal as of right on constitutional
grounds and a two-Justice dissent.

The precise issue for us to decide is whether Chapter 940 of the
Laws of 1984 substantially advances a legitimate State interest,
justifying the State's imposition of distinctive encumbrances and
obligations on plaintiffs' private property rights. The statute
purports to justify and accomplish its objective through an
amendment tied to the general purposes of the Rent Stabilization
Law (RSL) and Emergency Tenant Protection Act (ETPA). While these
twin enactments co-exist to remedy a persisting emergency housing
shortage, the particular statute under review perpetuates a
small, privileged housing stock. In terms, actuality, and
functional impact, the statute does not protect and benefit
specific occupant subtenants, but rather erects a subsidized
housing regime for Lenox Hill Hospital's preferential allotment.

We conclude that this legislation suffers a fatal defect by not
substantially advancing a closely and legitimately connected
State interest (see, Seawall Assocs. v City of New York, 74 NY2d
92, 107, cert denied 493 US 976; Rent Stabilization Assn. v
Higgins, 83 NY2d 156, 174, cert denied __ US __, 114 S Ct 2693 [6-
13-94]; see also, Nollan v California Coastal Commn., 483 US
825). Thus, we reverse the order of the Appellate Division.

I.

This long-standing dispute cannot be understood or resolved
without some historical background and context (see, 520 E. 81st
St. Assocs. v Lenox Hill Hosp., 157 AD2d 138, revg 142 Misc 2d
723, revd on other grounds 77 NY2d 944). The rent stabilization
system began in 1969 to ameliorate, over time, the intractable
housing emergency in the City of New York. The housing shortage
was ascribed to "continued high demand, attributable in part to
new household formation and decreasing supply" (Local L 1969, No.
16; see, Administrative Code of City of New York §26-501).
By regulating rents and providing occupants with statutory rights
to tenancy renewals under rent stabilization -- a "less onerous
form of rent regulation" -- the State intended to protect
dwellers who could not compete in an overheated rental market,
through no fault of their own (Sullivan v Brevard Assoc., 66 NY2d
489, 494; see, Braschi v Stahl Assocs. Co., 74 NY2d 201, 214
[concurring opinion]). The RSL has been maintained "to prevent
uncertainty, hardship and dislocation," and to "forestall
profiteering, speculation and other disruptive practices"
(McKinney's Uncons Laws of NY §YY 51-1.0 [renum §26-
501]).

Unlike rent control, which places stricter price controls on
owners and leaves many dwellings only marginally profitable, the
State, in enacting rent stabilization, seeks to insure more
balanced terms under which owners may apply for regulated rent
increases and to protect primary occupants. Thus, in 1971, the
Legislature exempted from rent stabilization regulation all
housing accommodations not "occupied by the tenant in possession
as his [or her] primary residence" (L 1971, ch 373). Similar
language was incorporated into §5(a)(11) of the ETPA of 1974
(see, L 1974, ch 576, §4). The phrase "tenant in possession"
included both the tenant of record and any subtenant residing in
the regulated apartment. In 1983, however, the Omnibus Housing
Act (OHA) amended Rent Stabilization Law §26- 504(a)(1)(f)
to exempt from the RSL dwelling units "not occupied by the
tenant, not including subtenants or occupants, as his [or her]
primary residence" (L 1983, ch 403, §41 [emphasis added]).
Thus, under OHA, the named leaseholder had to occupy the
apartment as a primary residence in order to qualify for a
renewal lease. While the subletting of apartments was still
permitted, Administrative Code §26-511(c)(12) added that
such tenants could not sublet units for more than a total of two
years out of a four-year period, and only on the establishment of
primary residency.

Next came Chapter 940 of the Laws of 1984 (L 1984, ch 940,
codified at Administrative Code of City of NY §YY 51-3.0
[renum §26-504]). It was enacted six months after the
passage of Chapter 403 and exclusively exalts the renewal rights
of not-for- profit hospitals, which had formerly subleased rent
stabilized apartments to qualified hospital employees. Section 1
of Chapter 940 amended the non-primary RSL §26-504(f),
providing "[w]here a housing accommodation is rented to a not-for-
profit hospital for residential use, affiliated subtenants
authorized to use such accommodation by such hospital shall be
deemed to be tenants." Thus, under Chapter 940, subtenants of the
primary tenant, a non- occupying, not-for-profit hospital, were
deemed qualified tenants in specific contradiction of the general
purport of the 1983 OHA reforms. Chapter 940 further grants not-
for-profit hospitals the right to sublet apartments to affiliated
employees without first obtaining an owner's consent and without
requiring the hospital itself to maintain these apartments as a
primary residence. Indeed, unlike any other regulated tenants,
all of whom are authorized to sublet for only two out of every
four years, the sublets by the not-for-profit hospital to its
selected and variable employees is durationally unrestricted and
open-ended. This is a unique and additional preference accorded
no one else similarly situated. Moreover, the hospital's special
privileges last for as long as its unilaterally-controlled
corporate existence.

The legislative history of Chapter 940 reveals that Lenox Hill
Hospital was the principal agent in urging the amendment (see,
Senate Debates, S. Bill No. 9983, June 28, 1984 ["(t)his bill has
been introduced at the request of Lenox Hill Hospital in New York
City * * * (and i)ts purpose is to enable Lenox Hill to have the
right to renewal leases"]). The salutary motivation was the
preservation of safe, convenient, affordable housing for hospital
staff (see, Governor's Bill Jacket, Letter from Lenox Hill
Hospital [dated 7-27-84], at 29). The primary and real
beneficiary of this legislation, however, is Lenox Hill Hospital,
not actual dwellers. The latter are only incidentally benefitted
and may be evicted under the exclusive control or at the whim of
their employer, Lenox Hill Hospital, to which the Legislature
transferred significant, distinctive, apartment ownership
prerogatives without its having to endure the burdens and costs
of ownership.

The affected apartment owners sued, believing that Chapter 940
could not constitutionally mandate that they provide Lenox Hill
Hospital with these benefits under perpetual renewal leases.
Supreme Court, in the phase of the litigation with which we are
now dealing, dismissed the complaint. It held that Chapter 940
did not constitute a physical taking since the owners had
previously and voluntarily opened their premises to the
hospital's prime tenancy. Supreme Court also found no regulatory
taking and concluded that Chapter 940 advanced the principal goal
of the RSL (154 Misc 2d 982). The Appellate Division (196 AD2d
728), with two Justices dissenting, affirmed for the reasons
stated by Supreme Court.

II.

Elementary and strong constitutional principles protect private
property rights and govern takings of property for public use
without just compensation. They evolved "'to bar Government from
forcing some people alone to bear public burdens which, in all
fairness and justice, should be borne by the public as a whole'"
(Penn Cent. Transp. Co. v New York City, 438 US 104, 123, quoting
Armstrong v United States, 364 US 40, 49; Seawall Assocs. v City
of New York, 74 NY2d 92, 101, cert denied 493 US 976, supra).

While there is no "precise mathematical calculation" for
determining when an adjustment of rights has reached the point
when "justice and fairness" requires that compensation be paid
(Dolan v City of Tigard, __ US __, 114 S Ct 2309 [June 24,
1994]), in Seawall Assocs. v City of New York (supra), this Court
implemented the doubled-edged test for determining whether a
regulatory taking has occurred. We held that a "burden-shifting
regulation" will constitute a taking "(1) if it denies an owner
economically viable use of his [or her] property, or (2) if it
does not substantially advance legitimate State interests" (id.,
at 107, citing Nollan v California Coastal Commn., 483 US 825,
834, supra; see also, Agins v Tiburon, 447 US 255, 260). Failure
to measure up to either criterion can invalidate a governmental
incursion or encumbrance on private property rights (see, Seawall
Assocs. v City of New York, supra; Lucas v South Carolina Coastal
Council, ___ US ___, 112 S Ct 2886, 2894; Nollan v California
Coastal Commn., supra; Keystone Bituminous Coal Assn. v
DeBenedictis, 480 US 470, 485, 495; Armstrong v United States,
364 US 40, supra). We are governed by this framework and discern
no analytical basis or precedential authority to drop below this
floor of constitutional protection for property owners or to
alter well-established substantive and procedural rubrics and
guidance in this complex field. In particular, we are satisfied
that even if the economic impact aspect of this test (see, Hodel
v Irving, 481 US 704, 714) were not to be satisfied, that feature
alone could not defeat the owners' interests and claims in a
controversy such as this, without consideration and fulfillment
of the substantial State interest and close causal nexus prong of
the governing test, even as to regulatory takings.

This Court also recently expressed the view that the substantial
State purpose for such legislation must be bound by a "close
causal nexus" to survive scrutiny (see, Rent Stabilization Assn.
v Higgins, 83 NY2d 156, 174, cert denied __ US __, 114 S Ct 2693
[6-13-94], supra; see also, Dolan v City of Tigard, __ US __, 114
S Ct 2309, supra). The precedents, State and Federal, thus
establish a constitutional minimum floor of protection which this
Court lacks authority to diminish under the supremacy clause
(see, Kaye, Dual Constitutionalism in Practice and Principle,
February 1987 Cardozo Lecture, reprinted in 42 The Rec of The
Assoc of the Bar of the City of New York 285, 289, 293, 294; see
also, Brennan, Bill of Rights and the States: The Revival of
State Constitutions as Guardians of Individual Rights, 61 NYU L
Rev 535, 550 [1986] [the Federal Bill of Rights creates "a
federal floor of protection"]).

While the typical taking occurs when the government acts to
physically intrude upon private property, governmental
regulations which limit owners' rights to possess, use or dispose
of property may also amount to a "taking" of the affected
property (see, e.g., Agins v Tiburon, 447 US 255, supra; Nectow v
City of Cambridge, 277 US 183, 188; Seawall Assocs. v City of New
York, 74 NY2d 92, 101, cert denied 493 US 976, supra). We held in
Seawall that the challenged local law effected a regulatory
taking and was unconstitutional because the burdens imposed on
owners did not substantially advance the stated public aim of
alleviating homelessness. The combined effect on the instant case
of these principles gains inexorable momentum from the twin
temples of the supremacy clause flowing from pertinent United
States Supreme Court precedents and the stare decisis import of
our own decisions.

The differing views of the members of the Court in this case
derive principally from varying interpretations of governing
precedents. As to Judge Ciparick's dissenting opinion, the
difference is essentially one of application, but as to Judge
Levine's, it is a profound difference from the Majority as to the
understanding and interpretation of what the many governing
precedents say and mean. Judge Levine's dissent discounts Seawall
and casts unfortunate uncertainty on the governing precedents and
principles, while the Majority is more confident as to the
meaning and application of the governing law (compare, Simpson v
Loehmann, 21 NY2d 305, 314 [Breitel, J., concurring opn]).

For example, there is no basis in Nollan itself for concluding
that the Supreme Court decided to apply different takings tests,
dependent on whether the takings were purely regulatory or
physical. The Court promulgated a principle for all property and
land-use regulation matters. A crucial threshold of analysis is
that no taking occurs if a law "substantially advance[s]
legitimate state interests" (Nollan, supra, at 834). In
discussing the lack of a standard for determining what
constitutes a "legitimate state interest," the Supreme Court
specifically referred to non-physical regulatory takings cases
(see, Nollan, supra, citing Agins v Tiburon, 447 US 255, and Penn
Cent. Transp. Co. v New York City, 438 US 104, supra). Further,
the Supreme Court refrained from placing any limitations or
distinctions or classifications on the application of the
"essential nexus" test. This suggests and supports a uniform,
clear and reasonably definitive standard of review in takings
cases (see generally, Peterson, Land Use Regulatory "Takings"
Revisited: The New Supreme Court Approaches, 39 Hastings LJ 335,
351). Indeed, Justice Brennan, in dissent in Nollan, expressly
attributed to the Majority's holding in Nollan an impact on all
regulatory takings cases, stating that the Court's "exactitude *
* * is inconsistent with our standard for reviewing the
rationality of a State's exercise of its police power for the
welfare of its citizens" (Nollan, supra, at 842- 843).

We conclude that Chapter 940 fails the test of substantially
advancing a legitimate State interest warranting the
indeterminate and unjustifiable burden draped disproportionately
on the particular owners' shoulders. That law, in the unusual
development and circumstances of this case, must meet the
constitutional safeguards on its own merits, not as an
augmentation or complement to some generalized State interest
found elsewhere in organic law or other statutes. Indeed, in
significant respects, the particular statute contradicts two key
goals of the RSL, to wit, occupant protection and eventual market
redemption. These incongruities flow out of the transferral of
power from a landlord to the employer of the actual occupants,
and by the removal of the affected apartments entirely and
permanently from marketplace availability or potentiality for
other publicly interested or vying occupants at rent-stabilized
rates.

The preservation of this Manhattan Upper East Side housing
enclave for this privileged entity's benefit, albeit one engaged
in a laudable and necessary eleemosynary health service function,
cannot masquerade as general welfare legislation. Purporting to
promote the general public welfare by enabling not-for-profit
hospitals to continue to provide subsidized housing benefits to
its chosen employees cannot sustain the sweep and manner of the
burden and confiscation effected against the few owners.
Dissenting Justice Joseph P. Sullivan aptly framed the
consequences as follows:

     A statutory interpretation which encourages the deployment
     of rent stabilized apartments in perpetuity as temporary
     dormitory space for an ever changing roster of hospital
     employees and promotes the displacement of these employees,
     some of whom may be long-term tenants, when they leave
     their employment does a disservice to rent stabilization's
     underlying purpose of protecting residential tenants from
     evictions during an acute housing shortage (196 AD2d 728,
     732).

Lenox Hill Hospital, the State and our colleagues, Judges Levine
and Ciparick, in their discrete dissenting opinions, urge that
the requisite State interest is satisfied under the overall
umbrella of the RSL and for the general health and welfare. We
respectfully disagree. Judge Ciparick's dissenting opinion, in
our view, does not give the holdings of the governing cases
sufficient weight and import affecting the rationale and
application we have advanced in the instant case. Judge Levine's
approach, on the other hand, would seem to undermine Seawall or,
sub silentio, place its precedential force in considerable doubt.
Functionally, his analysis undercuts the legitimate State
interest and close causal connection components of the well-
established test. Moreover, the Majority has not, as Judge Levine
asserts, adopted some variable of the standard governing tests or
effected per se rules, applications or consequences (Dissenting
opn, at 14).

The Supreme Court and this Court in the cited cases have ruled
definitively in the fulfillment and exercise of an appropriate
and necessary judicial review function, providing governing
guidance for future cases, including this one. This traditional,
fundamental, judicial role is not inimical to the prerogatives of
the other Branches, but serves instead as the singular check and
balance against governmental intrusion and overreaching
(Ciparick, J., Dissenting opn, at 9). We, thus, resolve the
controversy between the property owners and their prime tenant,
Lenox Hill Hospital, and thus settle the juridical relationship
and rights as between them. The power equation should, therefore,
not be characterized as between so-called greedy owners and needy
dwellers. Rather, this case is about a one-dimensional financial
award, subsidizing an employer which happens to be a non-
occupying prime tenant and which wishes to avoid the concomitant
burdens and responsibilities of ownership. Whatever consequences
flow from our ruling, then, are the product of the law itself and
its proper adjudication, not a societal or policy preference of
our making.

The central, underlying purpose of the RSL is to ameliorate the
dislocations and risk of widespread lack of suitable dwellings.
Chapter 940 does not contribute to that desirable altruistic aim.
It affects a tiny number of dwelling units. The effect of the
statute is also quite ephemeral. These apartments were subject to
rent stabilization prior to the enactment and will remain so,
irrespective of the outcome of this long-standing dispute
affecting a dwindling number of apartments, still in controversy
in this litigation, with respect to the hospital's prime tenancy
lease renewal entitlements. Accordingly, Chapter 940 fails to
substantially or functionally prevent or relate to excessive
rents and profiteering.

The realistic appraisal of Chapter 940 shows that it was sought
and designed essentially to subsidize the non-profit hospital's
special fringe benefit to some of its special health care
employees. This common employer-employee dilemma has no legally
or legitimately cognizable, causal relationship to the
governmental intrusion on rights and entitlements due owners in
the use and enjoyment of their properties in a rental market
where demand intractably exceeds supply at affordable levels.
Chapter 940 is really interposed as a special housing program,
privately funded through those owners who happen to have
previously rented to not-for-profit hospitals, like Lenox Hill
Hospital.

The real goal of Lenox Hill and other arguably similarly situated
not-for-profit hospitals is preserving a valuable perk for some
of its health care workers. This has little to do with a general
State housing concern warranting Chapter 940's intervention.
Rather, it sharply contradicts that indispensable legislative
threshold and constitutional prerequisite. The fact that the
State has acted through the "landlord-tenant relationship does
not magically transform general public welfare, which must be
supported by all the public, into mere 'economic regulation',
which can disproportionally burden particular individuals"
(Pennell v City of San Jose, 485 US 1, 22; see also, Penn Cent.
Transp. Co. v New York City, 438 US 104, 124, supra).

III.

The exception created by this challenged enactment to the
primary, occupying tenancy entitlement is infirm for additional
reasons. A proffered State interest, which by definition should
serve and protect the general populace on a fairly and uniformly
applied basis, should not be countenanced when, as occurs here,
the statute instead benefits one special class for an essentially
unrelated economic redistribution and societal relationship (see,
19th St. Assocs. v State of New York, 79 NY2d 434). Moreover, the
employer here is transformed into the de facto landlord and
receives a benefit directly related to conserving its capital or
operating expenditures. As a health care provider, it would
otherwise have to recoup those costs by direct expense
reimbursement formulas or charges, like others similarly
situated, for the true, full cost of medical services rendered in
its community. This statute thus diverts and subverts that equal
treatment regime. It does not even really protect housing for the
subtenant-employees as such, and certainly provides no benefit to
the citizenry at large on a fair opportunity and equal access
basis. Rather, it bestows a State-enacted indirect gift to a
preferred supplicant, the non-occupying prime tenant,
underwritten by the improperly burdened property owners. In this
respect, Chapter 940 cannot escape the force of 19th St. Assocs.
v State of New York (79 NY2d 434, supra), a potent precedent like
several others (see, e.g., Seawall, Higgins, Nollan, Agins), not
fully appreciated as to their full import and impact in both
dissenting expressions.

Part of the underpinning of the Hospital's and State's claim in
this case rests on a belated assertion of a health care crisis in
the City of New York. The Legislature declared no such crisis in
enacting this privileged exception. Also, such a generalization
would precedentially countenance a myriad of favoritism
experiments or supplicant demands or preferential entitlements to
special classes of entities over the wider, appropriate and
constitutionally authorized and recognized State interests of the
general public.

We conclude that the peripheral and generalized State interests
offered as justification for the regulatory mandates of Chapter
940 fail to sustain the legislation, as constitutionally required
for such State action. They are not closely or legitimately
connected to the long-established and recognized goals of the RSL
and ETPA, which seek to ameliorate the emergency housing
shortage. The regime of this statute, in significant functional
respects, contradicts an essential tenet of housing protection,
at the root of rent-controlled and rent-stabilized enactments. An
overarching goal of the RSL and ETPA is to afford some measure of
security to occupants so they do not lose their scarce dwelling
space due to unilateral, oppressive activities from more powerful
entities in the societal equation, whether they be landlords or
employers or both. The insupportable contradiction in this
statute is cogently demonstrated by its unabashed transfer to the
corporate employer of greater eviction rights over its affiliated
and disaffiliated employee subtenants than the owner is allowed
to retain.

IV.

Appellants-owners also claim that Chapter 940 results in a
regulatory wresting away of their reversionary property
interests. Property attributes to any physical object include the
rights "to possess, use and dispose" of the asset (United States
v General Motors Corp., 323 US 373, 378). It is well established
that even if only a single element of an owner's "bundle of
property rights" is extinguished, there has been a regulatory
taking (see, Hodel v Irving, 481 US 704, 716, supra; see also,
Seawall Assocs. v City of New York, 74 NY2d 92, supra).
Application of the Seawall analysis in that respect to the
present case adds further support to our primary analysis and
result that an unconstitutional taking occurs here under Chapter
940 (see, Hodel v Irving, 481 US 704, supra; Koenig v Jewish
Child Care Assn., 67 NY2d 955; Rent Stabilization Assn. v
Higgins, 83 NY2d 156, 176, supra) -- though we need not decide
this issue on a stand-alone basis because we do not consider it
dispositive by itself in this case. We respectfully submit that
Judge Levine's dissenting opinion also misperceives and
mischaracterizes the Majority's analysis and holding in the
reversionary interest aspect of this case.

Because Lenox Hill Hospital has enjoyed a corporate existence
since 1918, the enactment also confers a tenancy quite different
in kind, degree and potential from the human, personal
successorships countenanced in Braschi v Stahl Assocs. Co. (74
NY2d 201, 214, supra) and Rent Stabilization Assn. v Higgins (83
NY2d 156, supra; cf., Sullivan v Brevard Assoc., 66 NY2d 489,
supra). These cited successorships were narrowly recognized and
permitted precisely because of the analytic-policy underpinning
of averting personal evictions of real people. They are
consistent with the anti-eviction goals of the ETPA and RSL. This
statute is not. Yet, both dissents ignore the critical
distinction.

We next turn to Yee v City of Escondido (__ US __, 112 S Ct
1522), which does not compel a different result, despite Judge
Levine's extensive reliance. Yee was a "physical occupation"
takings case, not a regulatory type. More importantly, Yee dealt
with an entirely different statutory scheme. In Yee, a group of
mobile home park owners brought an action claiming that a local
rent control ordinance, which applied to all mobile home parks in
the municipality, constituted a physical taking because the local
ordinance deprived the petitioners of all use and occupancy of
their real property. Yee is additionally distinguishable because
the local law was general, not a targeted, narrow, special
interest as with Chapter 940, and there was no allegation or
proof submitted by the park owners that the local ordinance
placed an inordinate burden on selected individuals which, "in
all fairness and justice, should be borne by the public as a
whole" (Penn Cent. Transp. Co. v New York City, 438 US 104, 123,
supra). Moreover, although the Supreme Court refused to address
the petitioners' regulatory taking claim, citing a Rule 14.1(a)
violation, the Court stated that the regulatory claim did "not
depend on the extent to which petitioners are deprived of the
economic use of their particular pieces of property" (Yee v City
of Escondido, supra, at 1532). Thus, Yee is more analogous to a
constitutional challenge against the legislatively created rent
control and rent stabilization as a whole, which we certainly do
not have in this case and by no means does our ruling affect or
diminish the general validity of those broad, longstanding
protections and enactments.

Lenox Hill Hospital also urges that Chapter 940 assures an
"economically viable rate of return" on the subject apartments to
owners, since the statute provides for a 15% vacancy surcharge if
there has been no vacancy rental increase within the prior seven
years. The sweep of Chapter 940, however, goes well beyond that
tendered balance wheel (compare, Concrete Pipe and Prod. v Const.
Laborers Pension Tr., __ US __, 113 S Ct 2264, 2291). The statute
vests renewal rights in an entity of unlimited existence, a
notion directly contrary to another goal of the RSL and ETPA --
to free up apartments, fairly and appropriately, as soon as
practicable (see, Rent Stabilization Assn. v Higgins, 83 NY2d
156, 176-177, supra; Koenig v Jewish Child Care Assn., 67 NY2d
955, 958, supra). Lastly in this connection, the Court appears to
be unanimous in rejecting Lenox Hill's assertion that plaintiffs
are estopped from contesting the constitutionality of Chapter
940.

The sharply focused legal question under the controlling
precedential and analytical principles may be reduced simply to
whether the legislation is supported by a substantial State
interest and close nexus. No amount of extensive and virtually
exclusive exploration of economic recalibration of the test, as
an expectation for the future, can change that central
controlling feature under reasonably clear precedents and
principles. To take State action as with the challenged statute,
the State must show a legitimate, substantial State interest that
is closely, causally related to the action undertaken. The
Constitution forbids State action by fiat, no matter the economic
equation. Thus, by exercising the judiciary's constitutional duty
to decide this case within appropriate precedential and judicial
review templates, this Court concludes that the generalized
presumption of constitutionality accorded to statutes cannot
substitute for the fundamental defect in Chapter 940, to wit, no
substantial advancement of a legitimate State interest and "close
causal nexus" required for the challenged regulatory enactment to
survive scrutiny (see, Rent Stabilization Assn. v Higgins, 83
NY2d 156, 173-174, supra).

Accordingly, the order of the Appellate Division should be
reversed, with costs, and Chapter 940 of the Laws of 1984
declared unconstitutional and the case should be remitted to
Supreme Court, New York County, for such further proceedings as
may be necessary and appropriate to resolve rights and remedies
among the parties to this litigation affected by the holding of
this case.

---------------------------------------------------------------
LEVINE, J. (Dissenting):

I respectfully dissent.

In my view, the majority has mistakenly applied a per se standard
to an as-applied, purely regulatory takings claim under the Just
Compensation Clause of the Fifth Amendment here. In doing so, the
majority disregards plaintiffs' utter failure to show that they
suffered any economic loss to their investment in the New York
City residential rentals market as a result of the application of
Chapter 940 of the Laws of 1984 to their 100-plus units apartment
building. This case presents essentially and realistically a
takings claim challenge to an economic regulation of a business
enterprise and, as such, economic analysis of the impact of the
regulation is particularly vital to achieving a just disposition
of the case. Chapter 940, which merely restored to New York City
non-profit community hospitals the protection of the Rent
Stabilization Law of 1969 (RSL) and the Emergency Tenant
Protection Act of 1974 (ETPA) they previously enjoyed, is
completely consistent with and directly furthers basic purposes
of the RSL and the ETPA and this Court should sustain its
validity.

I.

Concededly and indeed as characterized by plaintiffs, the instant
action is a challenge under the Just Compensation, or "takings"
clause of the Fifth Amendment of the United States Constitution
to Chapter 940 of the Laws of 1984 as applied to their ownership
of an apartment building of over 100 units on the Upper East Side
of Manhattan, 15 of which are leased to defendant Lenox Hill
Hospital. Also, before this Court, plaintiffs have abandoned any
claim that the tenant eviction protection restored to Lenox Hill
under Chapter 940 constitutes a per se, physical taking, that is,
statutory authorization for a physical occupation of their
property (cf., Loretto v Teleprompter Manhattan CATV Corp., 458
US 419, 426; Seawall Assocs. v City of New York, 74 NY2d 92, 102-
106). Accordingly, this appeal is limited to an as-applied
challenge to an alleged, purely regulatory taking.

In Penn Central Transp. Co. v New York City (438 US 104), the
Supreme Court articulated the appropriate considerations and
method of analysis by courts in reviewing such purely regulatory,
as-applied taking challenges. First, the Court emphasized that
the Just Compensation Clause, insofar as it extends to a
regulatory taking, deals with disproportionate economic burdens
unfairly imposed on a comparatively few individuals by government
regulation, and that there is no simple litmus test to determine
whether a given regulation constitutes a taking. "[T]his Court,
quite simply, has been unable to develop any 'set formula' for
determining when 'justice and fairness' require that economic
injuries caused by public action be compensated by the
government, rather than remain disproportionately concentrated on
a few persons" (id., at 124 [emphasis supplied]). The Court in
Penn Central cautioned "that government may execute laws or
programs that adversely affect recognized economic values"
without giving rise to a valid takings claim and that there are
other instances where, although "government action caused
economic harm, it did not interfere with interests that were
sufficiently bound up with the reasonable expectations of the
claimant to constitute 'property' for Fifth Amendment purposes"
(id., at 124-125 [emphasis supplied]).

Thus, the Court in Penn Central directed that judicial review of
a claimed as-applied regulatory taking entails "ad hoc, factual
inquiries" in which notably important factors to be considered
are "[t]he economic impact of the regulation on the claimant and,
particularly, the extent to which the regulation has interfered
with distinct investment-backed expectations" (id., at 124).

The Supreme Court in Penn Central also rejected a takings clause
methodology later described as "conceptual severance"[n 1], i.e.,
the stratagem of dividing a unitary property into its various
component physical segments or its various integral property
interests and finding a taking because of the challenged
regulation's impact on one physical segment or an individual
property right. "'Taking' jurisprudence does not divide a single
parcel into discrete segments and attempt to determine whether
rights in a particular segment have been entirely abrogated. In
deciding whether a particular governmental action has effected a
taking, this Court focuses rather on the character of the action
and on the nature and extent of the interference with rights in
the parcel as a whole" (id., at 130-131 [emphasis supplied]).

Supreme Court decisions subsequent to Penn Central, including
decisions authored by the Justices most sensitive to the property
rights of owners in takings clause cases, confirm the continued
validity of the Penn Central ad hoc analysis in as- applied
regulatory taking cases, with its emphasis on identifying the
economic factors involved in the taking. Thus, in Hodel v Irving
(481 US 704), Justice O'Connor characterized the Penn Central
approach as a "framework for examining the question whether a
regulation of property amounts to a taking requiring just
compensation [which] is firmly established and has been regularly
and recently reaffirmed" (id., at 713-714). Chief Justice
Rehnquist in Pennell v City of San Jose (485 US 1), declined to
entertain a facial regulatory taking challenge to a rent control
ordinance because it was impossible to ascertain the economic
impact of the ordinance at that preliminary stage. "Given the
'essentially ad hoc, factual inquir[y]' involved in the takings
analysis *** the mere fact that a hearing officer is enjoined to
consider hardship to the tenant in fixing a landlord's rent,
without any showing in a particular case as to the consequences
of that injunction in the ultimate determination of the rent,
does not present a sufficiently concrete factual setting for the
adjudication of the takings claim appellants raise here" (id., at
10 [emphasis supplied]). And in Lucas v South Carolina Coastal
Council (____ US ____, 112 S Ct 2886), Justice Scalia again
affirmed that in the absence of a per se taking "we have
acknowledged time and again, '[t]he economic impact of the
regulation on the claimant and *** the extent to which the
regulation has interfered with distinct investment-backed
expectations' are keenly relevant to takings analysis generally"
(id., at ____ n 8, 112 S Ct, at 2895 n 8).

The Supreme Court's emphasis on inquiring for economic loss in an
as-applied regulatory takings claim follows directly from the
very language of the takings clause itself in the Fifth
Amendment, which authorizes all forms of governmental
appropriation of private property for a public use, upon the
payment of "just compensation" (US Const, Fifth Amend). As one
scholar has pointed out, the "normative component" of the takings
clause that "has predominated in modern cases" is the "protection
of economic value"[n 2] (Manheim, Tenant Eviction Protection and
the Takings Clause, 1989 Wis L Rev 925, 958). This is why "[i]t
is the owner's loss, not the taker's gain, which is the measure
of the value of the property taken" (United States v Causby, 328
US 256, 261; see also, Keystone Bituminous Coal Assn. v
DeBenedictis, 480 US 470, 516 [Rehnquist, Ch. J., dissenting]
["the question (whether a regulatory taking has occurred) is
evaluated from the perspective of the property holder's loss
rather than the government's gain"]).

The centrality of determining the extent of economic loss in a
regulatory takings challenge was again stressed in Keystone
Bituminous Coal Assn., which held "our test for regulatory taking
requires us to compare the value that has been taken from the
property with the value that remains in the property" (supra, at
497). And in Keystone, the Court also insisted that the
comparison is to be based upon the economic loss to the property
as a whole (id.; accord, Concrete Pipe and Prods. of California v
Construction Laborers Pension Trust for S. California, 508 US
____, ____, 113 S Ct 2264, 2290).

It follows from the foregoing that plaintiffs' minimum burden in
order to establish an as-applied regulatory taking here was to
show with a modicum of definiteness that they sustained some
significant loss of value in their apartment building as a whole
because of the application of Chapter 940. Indeed, our own
precedents require a takings clause challenger to show with a
high degree of definiteness the loss of value to the affected
property caused by a regulatory taking (see, Honore De St. Aubin
v Flacke, 68 NY2d 66, 76-77).

In the instant case, the sole evidence submitted by plaintiffs of
any adverse economic impact of Chapter 940 on the value of their
apartment building was the averment of one of the plaintiffs that
the statutorily required renewals of the Lenox Hill leases
prevented plaintiffs from exercising their vacancy rights under
the RSL and ETPA, to "renovate and reconfigure the apartments to
increase the fair market value and rent roll of the building". It
was not inadvertent that the only economic evidence of plaintiffs
was this vague reference to the possibility of increasing rents
and market value of the building through renovations. They
concede that if Lenox Hill and its subtenants are evicted, the
apartments will remain fully subject to rent stabilization, and
any new tenants and their successor family members would enjoy
the full protections of the RSL and ETPA for the indefinite
future. Moreover, whatever loss in the fair market value of the
building caused by plaintiffs' inability to increase rents
through renovations of the 15 apartments leased to Lenox Hill
would be offset by the increase in market value attributable to
the periodic 15% increases in Lenox Hill's rents guaranteed under
Chapter 940.

The other major economic factor mandated for consideration in an
as-applied regulatory taking challenge is "the extent to which
the regulation has interfered with distinct, investment-backed
expectations" (Penn Central Transp. Co. v New York City, 438 US
104, 124, supra; see also, e.g., Concrete Pipe and Prods. of
California v Construction Laborers Pension Trust for S.
California, 508 US ____, ____, 113 S Ct 2264, 2291, supra; Lucas
v South Carolina Coastal Council, ____ US ____, ____ n 8, 112 S
Ct 2886, 2895 n 8, supra; Keystone Bituminous Coal Assn. v

DeBenedictis, 480 US 470, 493-495, supra). Plaintiffs purchased
this apartment building in 1976, some 12 years after Lenox Hill
first acquired leases in the building and seven years after the
apartments became subject to rent stabilization. Uncontestably,
Chapter 940 did not create any greater encumbrances upon the
apartments leased to Lenox Hill than existed in 1976 when
plaintiffs chose to invest in the New York City residential
rentals market by acquiring the property. Thus, plaintiffs have
totally failed to sustain their burden of establishing that
Chapter 940 interfered with their investment-backed expectations
(see, Concrete Pipe and Prods. of California v Construction
Laborers Pension Trust for S. California, supra, at ______, 113 S
Ct, at 2291-2292).

Plaintiffs' failure to show an economic loss as the result of the
application of Chapter 940 should be fatal to their challenge. In
Goldblatt v Town of Hempstead (369 US 590) the Supreme Court
rejected a regulatory taking challenge because "there is no
evidence in the present record which even remotely suggests that
[enforcement of the regulation] will reduce the value of the lot
in question" (id., at 594; see also, Prune Yard Shopping Center v
Evans, 447 US 74, 84 [Rehnquist, J.] ["[H]ere appellants have
failed to demonstrate that the 'right to exclude others' is so
essential to the use or economic value of their property that the
state-authorized limitation of it amounted to a 'taking'"]).

II.

The majority justifies its disregard of plaintiffs' failure to
demonstrate any economic loss as a result of the application of
Chapter 940 to their apartment building primarily on two grounds.
One of those grounds is that, because Lenox Hill is a corporation
with "unlimited existence", Chapter 940 permanently deprives
plaintiffs of their reversionary interests, and this apparently
is viewed as a per se taking. "[E]ven if only a single element of
an owner's 'bundle of property rights' is extinguished, there has
been a regulatory taking (sl opn p 16). The pertinent Supreme
Court decisions hold to the contrary. Plaintiffs voluntarily
chose to enter the heavily regulated New York City residential
rentals market when they purchased the building in 1976, and they
admit that if the Lenox Hill leases are permitted finally to
expire, the apartments in question will remain indefinitely in
that market. Moreover, despite the application of Chapter 940,
plaintiffs still continue to be entitled to regain occupancy of
any of the apartments from Lenox Hill by establishing that the
apartment is intended for use as a primary residence of an owner
or the owner's immediate family (see, 9 NYCRR § 2524.4 [a]),
or that the owners intend to withdraw the apartment from the
rental market (id., at § 2524.5 [a] [1]). Additionally,
plaintiffs can terminate any of the Lenox Hill leases and recover
possession by showing that Lenox Hill or its subtenants committed
any of the statutorily described wrongful acts authorizing an
owner to evict (see, id., at § 2524.3).

The foregoing establishes the virtually identical impairment of
reversionary property rights here to that considered by the
Supreme Court in Yee v City of Escondido, ____ US ____, 112 S Ct
1522). In Yee, the combined State and local mobile home park rent
control and tenant eviction control laws imposed municipal
regulation of rent increases, limited the park owner's right to
terminate a mobile homeowner's tenancy to instances of nonpayment
of rent and tenant misconduct, or the park owner's intention to
use the park site for an entirely different purpose (see, id., at
____, 112 S Ct, at 1526-1527). Moreover, the regulations in Yee
barred a park owner from disapproving a transfer of ownership of
any mobile home in the park or requiring the removal of a mobile
home upon its sale. Just as contended here, the taking
challengers in Yee asserted that under the legislative scheme
"the mobile homeowner is effectively a perpetual tenant of the
park, and the increase in the mobile home's value thus represents
the right to occupy a pad at below-market rent indefinitely"
(id., at ____, 112 S Ct, at 1528 [emphasis supplied]). Not only
did the Supreme Court in Yee reject the claimants' contention
that the "perpetual tenancy" constituted a per se physical
taking, it also ruled that the challenge to the regulation there
fell within the class of cases where determining whether a taking
had occurred "entails complex factual assessments of the purposes
and economic effects of government actions" (id., at ____, 112 S
Ct, at 1526 [emphasis supplied]).

Attaching such critical significance on the takings question to
the claimed permanent suspension of plaintiffs' reversionary
rights also is inconsistent with the Supreme Court's rejection of
the "conceptual severance" approach to challenges in Penn Central
Transp. Co. v New York City (438 US 104, supra) and Keystone
Bituminous Coal Assn. v DeBenedictis (480 US 470, supra). As
stated in Andrus v Allard (444 US 51): "[W]here an owner
possesses a full 'bundle' of property rights, the destruction of
one 'strand' of the bundle is not a taking, because the aggregate
must be viewed in its entirety" (id., at 65-66 [emphasis
supplied]).

Elevating the reversionary, non-economic dominion interest of
plaintiffs here to the status of a fundamental constitutional
right on the regulatory takings question is, in my view,
particularly inappropriate and unrealistic in the case of New
York City real estate entrepreneurs in the residential rentals
market, in which individual tenants and individual apartments are
both highly fungible. In the New York City housing industry, an
owner's genuine reversionary interest is satisfied by the ability
to remove a financially or behaviorally irresponsible tenant --
rights plaintiffs will continue to enjoy notwithstanding the
application of Chapter 940.

Scholars and commentators on the takings clause have repeatedly
pointed out that dominion property interests, that is, the right
to exclude others or recover possession, may be of significance
to an individual homeowner or even perhaps the lessor of a modest
multi-family dwelling, but not for the modern urban real estate
entrepreneur's leasing of a large apartment building where the
values at stake in the landlord's reversionary rights are almost
completely economic. Thus, Professor Costonis contrasted the
dominion interests identified in William Pitt's famous
illustration of English private property rights, that the most
impoverished subject's weather-beaten cottage remained
impregnable to all the King's forces, with the actual dominion
interest of landlords such as plaintiffs.

But the values comprehended by the dominion interest of Pitts'
'poorest man' in his 'ruined tenement' would seem to be worlds
apart from those involved in the dominion interest of a Manhattan
landlord, whose apartments are rented for profit to the general
public and, when rented, are the subject of their tenants'
exclusive possession. (Costonis, Presumptive and Per Se Takings:
A Decisional Model for the Takings Issue, 58 NYU L Rev 465, 519
[1983]; see also, Manheim, Tenant Eviction Protection and the
Takings Clause, 1989 Wis L Rev 925, 1010-1012, supra; Radin, The
Liberal Conception of Property: Cross Currents in the
Jurisprudence of Takings, 88 Colum L Rev 1667, 1693-1695, supra;
Note, The Constitutionality of Rent Control Restrictions on
Property Owners' Dominion Interests, 100 Harv L Rev 1067, 1081-
1084 [1987]).

The majority's principal reason for finding a per se taking here
is its conclusion that Chapter 940 fails to substantially advance
any legitimate State interest because the legislation was enacted
purely to serve the private interests of Lenox Hill. The majority
also applies a heightened level of judicial scrutiny to the issue
of whether Chapter 940 advances a legitimate State interest,
i.e., requiring a close causal nexus between the legislative
means and ends. The majority states that Chapter 940 "was sought
and designed essentially to subsidize the non-profit hospital's
special fringe benefit to some of its special health care
employees" (sl opn p 13) and that Chapter 940 cannot be
characterized as general welfare legislation because it merely
serves as a "preservation of this Manhattan Upper East Side
housing enclave for this privileged entity's benefit" (sl opn p
10). The absence of a close causal nexus is explained as follows:
"The central, underlying purpose of the RSL is to ameliorate the
dislocations and risk of widespread lack of suitable dwellings.
Chapter 940 does not contribute to that desirable altruistic aim"
(sl opn p 12 [emphasis supplied]).

Even under the heightened judicial scrutiny standard applied by
the majority, a court is not permitted to pick and choose among
the express purposes of legislation in employing the test of
whether the requisite connection exists between the particular
regulation and the problems the Legislature sought to ameliorate.
Nor does strict scrutiny require that a regulation serve all of
the legitimate State interests the Legislature sought to advance
by the statutory scheme.

Undeniably, at least one of the original primary purposes of the
rent stabilization laws was "to prevent speculative, unwarranted
and abnormal increases in rents" and "to forestall [landlord]
profiteering, speculation and other disruptive practices"
(Findings of Declaration and Emergency, Local Law 1969, No 16,
Administrative Code of City of NY § 26-501). The tenant
eviction protection provisions of the RSL and ETPA not only have
the purpose of ameliorating harmful dislocations of tenants (as
alluded to in the majority's opinion), but also serve as a
necessary element of any effective rent regulation program. As
recognized by Justice Holmes in Block v Hirsh (256 US 135), the
first Supreme Court takings clause review of rent control and
tenant eviction protection legislation: "The preference given to
the tenant in possession is an almost necessary incident of the
policy [to prevent excessive rents] and is traditional in English
law. If the tenant remained subject to the landlord's power to
evict, the attempt to limit the landlord's demands would fail
(id., at 157-158 [emphasis supplied]). The Supreme Court again
appreciated the need for tenant eviction protection to have
effective rent regulation in construing Federal price control
legislation a generation later. "The Emergency Price Control Act
was intended in part to prevent excessive rents in the public
interest, and the very anti-eviction regulations under which the
Administrator granted the eviction certificate here were
specifically designed to prevent manipulative renting practices
which would result in excessive rents" (Parker v Fleming, 329 US
531, 536-537 [emphasis supplied]).

Presumably because corporate primary tenants renting apartments
for residential occupancy of officers or staff (such as Lenox
Hill has done here) were also subject to the legislatively
defined evil of "speculative, unwarranted and abnormal increases
in rents", the Legislature in enacting the RSL in 1969 did not
exempt corporate tenancies from the rent regulation and tenant
eviction protection benefits of that statute. Hospital and other
corporate tenants remained eligible for those benefits until the
enactment of the Omnibus Housing Act (OHA) of 1983 (L 1983, ch
403) (see, Koenig v Jewish Child Care Assn. of New York, 67 NY2d
955; see also, 520 East 81st Street Assocs. v Lenox Hill Hosp.,
38 NY2d 525). As Judge Ciparick has cogently pointed out in her
dissent, the loss of the protections of the RSL and ETPA by non-
profit hospitals was "an unintended consequence of the OHA"
(dissent, sl opn p 2). The relevant purpose of the OHA in
requiring that the tenant on the primary lease be the occupant of
any rent stabilized apartment was to forestall victimization of
subtenants by "speculative and profiteering practices" of the
primary tenants (dissent, sl opn p 2, [quoting L 1983, ch 403,
§ 1]).

As the Bill Jacket to Chapter 940 demonstrates, the Legislature
could readily have considered that the evils addressed by the
primary tenant residency requirements of the OHA were totally
inapplicable to the non-profit community hospitals' subletting of
nearby apartments to nursing staff "with a portion of the rent
being subsidized by the Hospital" (Letter from Lenox Hill
Hospital dated July 17, 1984, Bill Jacket, L 1984, ch 940, at
24). The Legislature also could readily have determined that non-
profit hospitals continued to need the protections of the RSL and
ETPA. The very same housing market conditions that impelled the
original adoption of rent stabilization -- apartment scarcity and
artificially inflated rents -- created a crisis for the hospitals
by jeopardizing their ability to maintain adequate staffing. "The
high cost of housing and the shortage of available apartments in
Manhattan has created the need for the Hospital to provide
adequate and moderately priced housing in order to recruit and
retain registered nurses" (Letter from Lenox Hill Hospital dated
July 27, 1984, Bill Jacket, L 1984, ch 940, at 27).

Moreover, contrary to the assumption of the majority, the crisis
was not unique to Lenox Hill Hospital. Mailgrams from the
president, director of nursing and general medical director of
Beth Israel Medical Center urging the Governor's approval of
Chapter 940 state:

     This legislation is essential to hospitals that rent
     apartments for use by affiliated health care personnel
     such as nurses. Failure to sign this legislation will make
     it impossble (sic) for us to provide safe and affordable
     housing for staff members. The inability to secure such
     housing seriously compromises our ability to service our
     community's health care needs (id., at 35-37).

There is nothing in the record or legislative history to impugn
the representation by Lenox Hill that enactment of the provisions
of Chapter 940 was "actively sought" by the Association of
Hospital Housing Administrators, a group representing 20 non-
profit hospitals in Metropolitan New York (Letter from Lenox Hill
Hospital dated July 27, 1984, Bill Jacket, L 1984, ch 940, at 29,
supra).

The Legislature therefore could have concluded that removing the
protections of the RSL and the ETPA from New York City's non-
profit hospitals placed the hospitals in the plight of being
unable to maintain adequate nursing staff because of the loss of
apartment renewals, or negotiating with the landlords (fully
aware of the acuteness of the hospitals' housing needs) for
renewals at artificially inflated market rental rates. When,
thus, considered in its context within the statutory framework of
the rent stabilization laws as a whole, and giving a fair and
comprehensive reading to Chapter 940's own legislative history to
ascertain the ends the Legislature chose to serve in enacting it,
surely Chapter 940 substantially advances a legitimate State
interest, even under the heightened level of judicial scrutiny
applied by the majority requiring a close causal nexus between
this land use regulation and "the problems sought to be
ameliorated" (Rent Stabilization Assn. of New York City v
Higgins, 83 NY2d 156, 174).

Essentially, Chapter 940 restored to non-profit community
hospitals in New York City the protections of the rent
stabilization laws they previously enjoyed, against excessive
rent increases and landlord profiteering (caused by artificially
inflated rental market conditions), protections apparently
unintentionally withdrawn by enactment of the OHA. Reinclusion of
New York City non-profit hospitals within the broad class of
human tenants and their successor family members subject to rent
stabilization directly and undeniably serves the legislative
protective and preventive goals with respect to abnormal rental
increases and landlord profiteering. Indeed, as I have already
shown, the legislative history of Chapter 940 easily supports a
legislative determination that non-profit hospitals have special
needs to be included within the protective umbrella of the RSL
and ETPA.

Moreover, it was entirely reasonable to exempt non-profit
hospital tenancies from the primary tenant residency requirements
of the OHA, the purpose of which was to ameliorate an entirely
different problem than that addressed by the RSL and ETPA, i.e.,
primary tenant manipulation and exploitation of the rent
stabilization laws in entering into subleases.

Chapter 940 more than satisfies any possibly required heightened
level of judicial scrutiny. Its provisions, including the
periodic rental increases to which landlords of the hospitals are
entitled, are narrowly tailored to minimize if not totally avoid
any transfer of wealth from landlords to lessee hospitals (see,
Yee v City of Escondido, ____ US ____, ____, 112 S Ct 1522, 1529,
supra) as a result of the economic regulation embodied in Chapter
940. The absence of any evidence in the record of an adverse
economic impact upon plaintiffs as a result of the application of
Chapter 940 powerfully suggests that the Legislature succeeded in
that effort. Certainly plaintiffs have not tendered any less
restrictive legislative alternative that would accomplish the
protective purposes of Chapter 940.

Nor is it of any significance on the takings issue, as the
majority implies, that non-profit community hospitals were
singled out among other possibly worthy institutions for the
continued benefits of the rent stabilization laws. Surely
maintaining the non-profit hospitals' "ability to service [their]
community's health care needs" (Beth Israel's Mailgrams, Bill
Jacket, L 1984, ch 940, supra), without adding to health care
costs the excessive landlord profits from abnormal rent
increases, merits special legislative concern. In Rent
Stabilization Assn. of New York City v Higgins (83 NY2d 156,
supra), we deferred to the expertise of the State Division of
Housing and Community Renewal as to "the designation of classes
of individuals to whom [the agency] has extended noneviction
protection" (id., at 174). The Legislature is entitled to at
least the same deference. That the majority may consider Chapter
940 to be "underinclusive is, of course, no justification for
rejecting it" (Keystone Bituminous Coal Assn. v DiBenedictis, 480
US 470, 487 n 16, supra). "[Congress] need not control all rents
or none. It can select those areas or those classes of property
where the need seems the greatest" (Woods v Cloyd W. Miller, Co.,
333 US 138, 145).

For all of the foregoing reasons, I conclude that plaintiffs have
failed to satisfy their heavy burden of establishing the
unconstitutionality of Chapter 940 as a regulatory taking in its
application to them.

III.

I wish to add some additional comments on the appropriate level
of judicial scrutiny in regulatory takings challenges. This Court
in Seawall Assocs. v City of New York (supra) read the Supreme
Court's decision in Nollan v California Coastal Commn. (supra) as
imposing in all regulatory takings cases a heightened level of
judicial scrutiny, i.e., requiring a close causal nexus between
the legislative means and ends, in applying the primary per se
test of whether the challenged regulation substantially advances
a legitimate State interest. We unanimously adhered to that
interpretation of Nollan in rejecting the facial challenge to the
regulation in Rent Stabilization Assocs. v Higgins (83 NY2d 156)
and, as I have already outlined in the main body of this dissent,
I am confident that Chapter 940 satisfies the constitutional
standard at the "close causal nexus" level of scrutiny.

Subsequent to our decision in Rent Stabilization Assn. v Higgins
(supra), in Dolan v City of Tigard (____ US ____, 114 S Ct 2309)
the Supreme Court reaffirmed its holding in Nollan and further
explained the quantum of the close causal nexus required in
Nollan. In Dolan, involving a regulatory taking claim similar in
nature to that considered in Nollan, the majority held that the
required nexus the municipality had the burden to demonstrate was
"'rough proportionality'" (supra, ____ US, at ____, 114 S Ct, at
2319) between the regulatory exaction from the property owner and
the problem it addressed.

Nollan and Dolan both involved the imposition by a governmental
land use administrative agency at the State or local level of
conditions for discretionary approval of building permit
applications by landowners, thereby requiring the landowners to
dedicate property rights of permanent physical occupation of
their land to the general public. In both cases, the Supreme
Court held that the exaction of those conditions would have
constituted per se physical takings if instead they had been
manifested as direct orders for the landowners to cede rights of
physical occupation for some general welfare purpose (see,
Nollan, supra, 483 US, at 831; Dolan, supra, _____ US, at _____,
114 S Ct, at 2316).

Prior to Dolan, some respected takings clause scholars
interpreted Nollan as limiting its close causal nexus scrutiny to
the regulatory imposition of conditions of permanent physical
occupation which would otherwise constitute a per se taking (see,
Michelman, Takings 1987, 88 Colum L Rev 1600, 1608-1609; Manheim,
Tenant Eviction Protection and the Takings Clause, 1989 Wis L Rev
925, 949-950, n 146, 149, supra; Tribe, American Constitutional
Law, § 9-4, at 599 n 20 [2d ed]).

My reading of Dolan leads me now to agree. First, clearly and
expressly, Dolan limits its imposition of the burden on the
regulator to demonstrate rough proportionality in the "'essential
nexus'" (majority sl opn p 9) to cases involving administrative
agency impositions of suspect conditions of physical occupation.
Chief Justice Rehnquist's majority opinion in Dolan states:

     Justice Stevens' dissent takes us to task for placing the
     burden on the city to justify the required dedication. He is
     correct in arguing that in evaluating most generally
     applicable zoning regulations, the burden properly rests on
     the party challenging the regulation to prove that it
     constitutes an arbitrary regulation of property rights.
     (see, e.g., Euclid v Ambler Realty Co., 272 US 365 [1926]).
     Here, by contrast, the city made an adjudicative decision
     to condition petitioner's application for a building permit
     on an individual parcel. In this situation, the burden
     properly rests on the city (Dolan, supra, _____ US, at
     _____ n 8, 114 S Ct, at 2320 n 8).

Second, in Dolan Chief Justice Rehnquist contrasted the typical
"land use regulation [which] does not effect a taking if it
'substantially advance[s] legitimate state interests' and does
not 'den[y] an owner economically viable use of his land.' Agins
v Tiburon, 447 US 255", with the regulatory action at issue in
Dolan, where "the city made an adjudicative decision to condition
petitioner's application for a building permit on an individual
parcel [and] the conditions imposed were not simply a limitation
on the use petitioner might make of her parcel, but a requirement
that she deed portions of the property to the city" (supra, _____
US, at _____, 114 S Ct, at 2316).

Finally in Dolan, the majority decision justified the application
of heightened scrutiny by referring to Nollan's adaptation of the
"well-settled doctrine of 'unconstitutional conditions,' [under
which] the government may not require a person to give up a
constitutional right *** in exchange for a discretionary benefit
conferred by the government where the property sought has little
or no relationship to the benefit" (id., at____, 114 S Ct, at
2317). The Dolan majority also invoked the conclusion in Nollan
that without a close connection between the relevant governmental
purpose and the required conditional dedication of property, the
exaction of a land occupation dedication as a condition for a
discretionary permit approval comes down to nothing more than
"gimmickry" to obtain an appropriation of property by
"'extortion'" without paying for it (id., at _____, 114 S Ct, at
2317).

Since neither the doctrine of unconstitutional conditions nor the
metaphor of municipal extortion masquerading as conditional land
development permit approval has ever been invoked to determine
the validity of rules merely regulating the use of property, I
conclude that the Nollan and Dolan heightened close causal nexus
judicial scrutiny is really a judicial response to the special
dangers in development permit cases of abuse of the regulatory
process to achieve a physical taking of an applicant's property
without just compensation.

Thus, in my view, heightened, close causal nexus scrutiny should
not be applied to test the validity of all regulatory taking
challenges, and should not have been applied in the instant case,
although I am convinced that Chapter 940 of the Laws of 1984 can
withstand that level of scrutiny. Until either the Supreme Court
speaks definitively on whether its rule in Nollan and Dolan
applies generally to all regulatory takings challenges, or this
Court chooses to reappraise its reading of Nollan as so applying
generally to all regulatory taking challenges, I am constrained
by stare decisis to apply that level of scrutiny here, and have
done so, concluding nonetheless that Chapter 940 thus scrutinized
is valid.

F O O T N O T E S

1. See, Radin, The Liberal Conception of Property: Cross Currents
in the Jurisprudence of Takings" (88 Colum L Rev 1667, 1674-1678
[1988]).

2. The takings clause also protects dominion interests, but this
normative aspect more centrally pertains to per se, physical
takings or where the claim is that a governmental condemnation of
property violates the public use clause of the Fifth Amendment
(see, Hawaiian Housing Auth. v Midkiff, 467 US 229).

----------------------------------------------------------------
CIPARICK, J. (dissenting):

Since 1969, the New York City Council has embraced rent
stabilization, "second generation rent control[n 1]," to
ameliorate the "serious public emergency" caused by an acute
rental housing shortage within New York City (Admin Code §
26-501). The Rent Stabilization Law (RSL) (Admin Code § 26-
501 et. seq.) has consistently been repromulgated, most recently
as of March 30, 1994, based on the legislative finding that this
"serious public emergency" persists (Admin Code § 26-502
[Loc L 1994, No 4 § 6]). Yet, rent stabilization is not
intended to be a permanent, pervasive fixture in the rental
housing market. To this end, amendments to the RSL have been
adopted to address perceived changes in the urban rental housing
market and to remedy abuses.

The enactment of the Emergency Tenant Protection Act (EPTA) in
1974 (L 1974, ch 576) and the Omnibus Housing Act of 1983 (OHA)[L
1983, ch 403] were directed at restricting the tenant's right to
sublet the stabilized unit. The OHA amended the RSL (Admin Code
§§ 26-504[a][1][f] and 26-511[c] [12]) to, inter alia,
exempt units not occupied by the tenant of record as a primary
residence from the protections of the RSL. The OHA was adopted in
response to "speculative and profiteering practices" by tenants
who capitalized on their rent stabilized leases by subletting for
a profit or warehousing units in the hope of conversion to
individual ownership. In accord with the salutary purposes of the
RSL, itself an emergency response to the public housing crisis
engendered by disruptive rental practices, including landlords'
manipulation of rents and the supply of modestly priced housing,
the OHA is designed to protect "public health, safety and
welfare" by regulating the conditions of rental occupancy to
"prevent uncertainty, potential hardship and dislocation of
tenants" (L 1983, ch 403 § 1).

Chapter 940 of the Laws of 1984 was enacted to remedy an
unintended consequence of the OHA. Because landlords no longer
had to offer renewal leases to tenants who did not use their
stabilized units as their primary residence, the authorized
subtenants of not- for-profit hospitals were not entitled to
renewal leases, subjecting them to eviction. By amending the RSL
to create an exception to the primary residence requirement for
not-for-profit hospitals that sublease units to their employees,
the Legislature recognized that subtenancies created by not-for-
profit hospitals were not susceptible to the vices the OHA
intended to regulate and that the tenancies of not-for-profit
hospitals are consistent with the purposes of the RSL and the
ETPA. Indeed, the Division of Housing and Community Renewal
(DHCR), the state agency charged with administering the RSL,
recommended that the Governor approve Chapter 940 (see, Letter of
Division of Housing and Community Renewal Commissioner Yvonne
Scruggs-Leftwich, Bill Jacket L 1984, ch 940, at 14-15).

The majority declares Chapter 940 unconstitutional, finding no
causal nexus between Chapter 940 and the RSL. I respectfully
dissent and would declare Chapter 940 constitutional. The close
causal nexus between Chapter 940 and the RSL is that Chapter 940
implements a means of addressing the serious public emergency of
housing people in New York City by continuing the protections of
the RSL for particular tenancies already subject to rent
stabilization. In this regard, Chapter 940 does not suffer from
any constitutional infirmity.

I.

Defendant-respondent Lenox Hill Hospital (Lenox Hill) has
maintained rental apartments at 420 East 79th Street, New York
City, approximately two blocks from its facility, to house
affiliated employees since 1964. Lenox Hill instituted a housing
program in the 1960's in order to provide convenient, safe and
affordable housing for affiliated employees, such as nurses, who
work shifts that can begin or end at midnight. Typically, Lenox
Hill would execute leases for a number of apartments as the
tenant and then sublease an apartment to its employee, who would
then assume subtenancy as an incidence of employment. Lenox Hill
required the employee to occupy the apartment as a primary
residence. Prior to passage of Chapter 940 in 1984, Lenox Hill
leased approximately 210 units in close proximity to its facility
for occupancy by staff members.

In 1976, plaintiffs purchased 420 East 79th Street, at which time
Lenox Hill rented 18 of the 112 units. Lenox Hill is presently
the tenant of record for 15 apartments, all of which are subject
to the RSL. Until 1991, plaintiffs regularly extended two year
renewal leases to Lenox Hill. Prior to the December 31, 1991
expiration of six of the leases, plaintiffs served Lenox Hill and
the subtenants of those units with notices of nonrenewal,
informing them that the leases would not be renewed because
Chapter 940 of the Laws of 1984 is unconstitutional and
unenforceable as it purports to grant the subtenants the right to
renewal leases and/or continued occupancy, and that Lenox Hill
does not occupy the subject apartments as a primary residence as
required by the RSL (9 NYCRR §§ 2524.2 and 2524.4[c]).
This action ensued.

The legislative history of Chapter 940 demonstrates that it was
designed to reinstate the pre-OHA statutory criteria and enable
not-for-profit hospitals, such as Lenox Hill, to continue
established housing programs. To this end, the senate sponsor
cited Lenox Hill strictly as "an example" of a not-for-profit
hospital within the measure's purview (see, Senate Debates, S.
Bill No. 9983, June 28, 1984).

Against this background, two factors are noteworthy. First, any
buildings owned or operated on a not-for-profit basis by a
hospital or other eleemosynary institution are exempt from
regulation under the RSL (Admin Code § 26-511[c]) and the
ETPA (McKinney's Unconsolidated Laws of NY § 8625[a][6]).
Second, the Legislature recently narrowed the range of leases
subject to rent stabilization by decontrolling units that rent at
$2,000 per month and whose occupants' federal adjusted gross
income exceeds $250,000 for two consecutive calendar years. While
these factors may mark steps in the "transition from regulation
to a normal market of free bargaining between landlord and
tenant" (Admin Code § 26-401[a]), this course, if it
continues, must be paved by the Legislature.

While rent stabilization conceptually represents an attempt to
equalize the tenant's bargaining power in a scarce housing market
by regulating the rental terms, the practical result of rent
stabilization is to redistribute the landlord's interest (see,
Epstein, Rent Control and the Theory of Efficient Regulation, 54
Brooklyn L Rev 741[1988]; Radford, Regulatory Takings Law in the
1990's: The Death of Rent Control? 21 Sw U L Rev 1019[1992]).
Politically, this market redistribution is accepted in the form
of rent stabilization as a legitimate exercise of the State's
police power in response to rental housing crises, historically a
vestige of World War II and, most recently, the consequence of
market imbalances that create mass dislocations and shortages of
affordable housing (see, Manheim, Tenant Eviction Protection and
the Taking clause, 1989 Wis L Rev 925; see also, Braschi v Stahl
Assocs. Co, 74 NY2d 201, 208; Block v Hirsch, 256 US 135, 156).

Whether the rubric of rent stabilization is the appropriate means
to address this end is a policy issue not appropriate for
judicial resolution (see, Eisen v Eastman, 421 F 2d 560, 567 cert
denied 400 US 841; Lincoln Building Assocs v Barr, 1 NY2d 413,
415 app dismissed 355 US 12).

It is not for this Court to question the reasonableness,
propriety, wisdom or expediency of the legislative declaration
that a housing emergency continues in New York City or to
dismantle rent regulation on a piecemeal basis by judicial fiat
where, as here, the statutory amendment is not only in harmony
with the intent of the RSL and ETPA but substantially advances
the State's interest in militating the relentless rental crisis
in New York City (see, Federal Home Loan Mortgage Corp. v New
York State Div. of Housing and Community Renewal, 854 F Supp 151;
Rent Stabilization Assn. of New York City, Inc. v Higgins, 83
NY2d 156, 174, cert denied __ US __ , 114 S Ct 2693).

II.

The Supreme Court has "consistently affirmed that states have
broad power to regulate housing conditions in general and the
landlord-tenant relationship in particular without paying
compensation for all economic injuries that such regulation
entails" (Loretto v Teleprompter Manhattan CATV Corp., 458 US
419, 440; see also, Pennell v San Jose, 485 US 1, 12 n 6; Bowles
v Willingham, 321 US 503, 517-518; Loab Estates, Inc. v Druhe,
300 NY 176, 179). Similarly, the Supreme Court has upheld the
authority of state and local governments to engage in land use
planning against constitutional challenge, recognizing that
"[g]overnment hardly could go on if to some extent values
incident to property could not be diminished without paying for
every such change in the general law" (Dolan v City of Tigard, __
US __, 114 S Ct 2309, 2316, quoting Pennsylvania Coal Co. v
Mahon, 260 US 393, 413). Nevertheless, a governmental regulation
cannot trespass the Fifth Amendment's guarantee that private
property shall not be taken for a public use without just
compensation. This guarantee was designed to bar government from
"forcing some people alone to bear public burdens which, in all
fairness and justice, should be borne by the public as a whole"
(Armstrong v United States, 364 US 40, 99 [applicable to states
via Fourteenth Amendment]; see, Chicago Burlington & Quincy R.R.
Co. v Chicago, 166 US 226).

A claim that a governmental act infringed upon an owner's Fifth
Amendment rights is traditionally evaluated on an ad hoc factual
basis (Penn Cent. Transp. Co. v New York City, 438 US 104, 124
reh denied 439 US 883). The economic impact of a governmental act
upon an owner and the extent of interference with an owner's
investment-backed expectations are relevant considerations in
this evaluation which, as the majority states, partakes of no
precise formulation (Majority Opn, at 7, citing Dolan v City of
Tigard, 114 S Ct, at 2319). It is the opinion of this dissenter,
as distinct from the analysis proffered by my dissenting
colleague, that the application of these factors should not be
parlayed into a discrete takings analysis.

As takings jurisprudence has evolved, the Supreme Court has
identified certain intrusions as compensable "without case
specific inquiry into the public interest advanced in support of
the restraint" (Lucas v South Carolina Coastal Council,__ US __,
112 S Ct 2886, 2893). Regulations that compel a landowner to
endure a physical invasion (Yee v City of Escondido, 503 US
_____, 112 S Ct 1522, 1528), and regulations that deprive a
landowner of all productive or economically beneficial use of the
land (Nollan v California Coastal Commn., 483 US 825, 834)
constitute these types of compensable takings. However, a
governmental regulation will not be found to effect a taking if
it "substantially advance[s] legitimate state interests" or does
not "den[y] an owner economically viable use of his land" (Agins
v Tiburon, 447 US 255, 260; Dolan v City of Tigard, 114 S Ct, at
2316-2317, supra; Seawall v City of New York, 74 NY2d 92, 107
cert denied 493 US 976; Rent Stablization Assn., 83 NY2d, at 171
and 173, supra). A regulation that substantially advances a state
interest is constitutionally sound when there is an "essential
nexus" between the state interest and the end result of the
regulation (Seawall, supra, 74 NY2d, at 107). In its recent
plurality opinion in Dolan v City of Tigard, 114 S Ct 2309,
supra, the Supreme Court deliberated over the level of scrutiny
that governmental motivations and findings should be subjected to
when assessing whether such objectives are constitutionally
sufficient to justify the regulation. The five justice majority
settled on a heightened level of judicial scrutiny, identifying
the measure of the nexus requirement as one of "rough
proportionality" (Dolan v City of Tigard, supra, 114 S Ct, at
2319-2320).

In concluding that Chapter 940 does not advance the overall
purposes of the RSL, but rather masquerades as general welfare
legislation that preserves an exclusive housing enclave for Lenox
Hill, the majority impinges upon the State's prerogative to
proportionally extend the scope of the RSL consistent with its
declaration of emergency, and its underlying goals which are
legitimate state interests deserving protection.

III.

Chapter 940 does not affect a regulatory taking and is
constitutionally sound because it substantially advances the
State's interest in curbing chronic rental housing shortages.

In countenancing plaintiffs' argument that they are unduly
burdened by Chapter 940, and characterizing Chapter 940 as an
unconstitutional taking, the majority overlooks the fact that the
entire scheme of rent stabilization saddles owners of rental
buildings with greater burdens than their unregulated
counterparts in furtherance of the public health, safety and
welfare, and excuses plaintiffs from a contractual obligation at
the expense of tenants identified as deserving of statutory
protection.

By its express terms, the RSL was promulgated "to prevent
speculative, unwarranted and abnormal increases of rents...which
creates a special hardship to persons...occupying rental housing"
(Admin Code § 26-501). The essential goal of the RSL is to
protect and preserve certain designated tenancies from the
vagaries of the marketplace. As Chapter 940 is not limited to
Lenox Hill but extends to all not-for-profit hospitals, it is
anomalous to single out Chapter 940 as "special interest
legislation" since by its very nature rent stabilization bestows
preferences on designated tenancies (see, Hotel Dorset Co. v
Trust for Cultural Resources of the City of New York, 46 NY2d
358, 367 & 368 n 3; see also, Letter of Hospital Assn of New York
State to Governor's Counsel, Bill Jacket L. 1984, ch 940, at
21[recommending enactment of ch. 940]; Mailgrams from Beth Israel
Hospital to Governor, Bill Jacket L. 1984, ch 940, at 35-
37[requesting enactment of ch 940 as essential to hospitals]; cf,
19th Street Assocs. v State of New York, 79 NY2d 434).

It is a recognized policy of DHCR to require landlord- owners to
offer renewal leases to corporate tenants that lease stabilized
apartments for their affiliated officers, directors or employees
provided the actual occupant satisfies the primary residence
requirement (see, Matter of Cale Dev. Co., Inc. v Conciliation
and Appeals Bd., 94 AD2d 229, 232 aff'd 61 NY2d 926; Matter of
Sommer v Conciliation and Appeals Bd., 115 Misc 2d 820 aff'd 93
AD2d 481 aff'd 61 NY2d 973; Matter of Sommer v Conciliation and
Appeals Bd., 116 AD2d at 459, supra; see also, Koenig v Jewish
Child Care Assn., 67 NY2d 955, 957). Consistent with this policy,
DHCR supported enactment of Chapter 940 as it constituted
codification of existent administrative policy (see, Letter of
DHCR Commissioner Scruggs-Leftwich, Bill Jacket, L 1984, ch 940,
supra), and ensured that currently protected tenancies would so
remain.

Plaintiffs suffered no diminution of rights as a consequence.
Chapter 940 in no way impairs the owners' rights to collect
periodic rent increases (see, 9 NYCRR § 2522.5); evict
unsatisfactory subtenants (see, 9 NYCRR § 2524.2); or,
completely alter the use of the premise (see, 9 NYCRR §
2524.3; compare Seawall, 74 NY2d at 108, supra).

It is precisely because the units now rented by Lenox Hill have
been and will continue to be subject to the RSL that Chapter 940
is causally related to the goals of the statute it amended. As
Supreme Court found and the Appellate Division upheld "[t]here is
no question but that the apartments are in fact rented to
hospital employees [and] it is ultimately residential tenants who
are being protected" (Manocherian, et. al. v Lenox Hill Hospital,
154 Misc 2d 982, 991 aff'd 196 AD2d 728). It was plaintiffs who
accepted Lenox Hill as the tenant and consequently cloaked Lenox
Hill with protection against the acute rental housing shortage
through their participation in rent stabilization. Chapter 940
ensures Lenox Hill will continue to receive those benefits of the
RSL it currently extends to its employee-subtenants, who then
escape the perils of the rental market as an incidence of
employment (see, Sommer v New York Conciliation and Appeals Bd.,
116 AD2d 457, 459).

The majority's assault on Chapter 940's scope is further
minimized in light of the blanket exception from the provisions
of the RSL and ETPA for housing accommodations owned or operated
by non-profit eleemosynary institutions (Admin Code § 26-
511[c]; McKinney's Unconsolidated Laws of NY § 8625[a][6];
cf. § 8625[a][11]). That the ability of these institutions
to provide adequate, affordable housing to their affiliates
remains unimpaired despite the broad sweep of the RSL and ETPA is
indicative of the State's interest in protecting and preserving
dwellings used to house affiliates of such institutions. The
Lenox Hill employees, as subtenants, are entitled to the
protections of the RSL and thus should not be penalized as a
result of Lenox Hill's inability or unwillingness to serve as a
prime landlord or owner engaged in real estate development. A
legitimate goal of rate regulation, such as rent stabilization,
is the protection of the "consumer's" welfare (see, Pennell v
City of San Jose, 485 US at 12, supra).

Therefore, it cannot be said, as a matter of law, that the goals
of the RSL "to prevent exactions of unjust, unreasonable and
oppressive rents and rental agreements and to forestall
profiteering, speculation and other disruptive practices tending
to produce threats to the public health, safety and general
welfare" are not promoted when the effect of Chapter 940 is to
permit an urban not-for-profit hospital to offer its health care
workers convenient, safe and affordable housing that otherwise
would not be available (see, 19th St. Assoc v State of New York,
79 NY2d 434, 443). It is the declaration of unconstitutionality
by the majority that will yield a result contrary to the RSL.

In wresting the subject rent stabilized apartments from Lenox
Hill, the majority will cause the eviction of tenants from
already protected dwelling space, who did nothing other than
occupy their units as primary residences. By characterizing
Chapter 940 as a statute that diverts and subverts the equal
treatment regime, the majority not only ignores the realities of
rent stabilization in the urban center, but tips the balance in
favor of the party that already has unequal bargaining power.
This is exactly the oppressive behavior the RSL, as amended by
Chapter 940, seeks to forestall.

That the subtenant's occupancy is contingent on employment by
Lenox Hill does not contravene the intent of the RSL, contrary to
the majority's contention, as Lenox Hill's motive for maintaining
the rent stabilized units is to house its affiliated employees,
not the general population. Obviously, an employee on the verge
of retirement or otherwise poised to sever the employment
relationship has notice of the requirement that occupancy is
contingent upon employment by Lenox Hill as to allow for
appropriate relocation plans. In any circumstance, the subtenant
would receive a standard termination notice and be afforded all
substantive and procedural due process rights as required by law,
including a summary proceeding in Civil Court (see, 9 NYCRR
§§ 2524.2 and 2524.3).

IV.

As this Court has recognized, rent regulation creates tenancies
of indefinite duration (see, Rent Stabilization Assn, 83 NY2d, at
172-173, supra). It is, therefore, of no consequence whether the
tenant is an individual with a finite life span or a corporation
endowed with a perpetual existence, because the same result
obtains (see, Seawall, 74 NY2d, at 112, supra; Nollan, 483 US, at
837, supra). Plaintiffs, who bear the heavy burden of
demonstrating that the subject enactment is unconstitutional,
fail to establish by any empirical proof that the rental rates of
the Lenox Hill units are any less than those of comparable units
in the building as to deprive them of the economically beneficial
use of their property. Indeed, plaintiffs have and will continue
to voluntarily collect rents from the Lenox Hill subtenants, as
well as increases "by a sum equal to 15 percent of the previous
lease rental" whenever Lenox Hill executes a renewal lease,
provided plaintiffs have not received any vacancy increases or
surcharges in the seven years prior to the new renewal lease.

Any objection plaintiffs harbor regarding the sufficiency of the
15 percent vacancy figure is more appropriately addressed in a
hardship petition before DHCR. There is no merit to Lenox Hill's
claim that plaintiffs are estopped from any such challenge to
Chapter 940.

I would reject plaintiffs' assertion, credited by the majority,
that plaintiffs have forfeited their reversionary interests in
the subject units. This contention rings hollow when confronted
with the fact that the use plaintiffs intended for the property
has remained constant and plaintiffs have enjoyed the security of
a tenant that always pays the rent (see, Bowles v Willingham, 321
US, at 517-518, supra; Penn Central Transp. Co. v New York City,
438 US, at 136, supra; Rector, Wardens and Members of the Vestry
of St. Bartholomew's Church v City of New York, 914 F 2d 348,
356). "It is the forced occupation...not the identities of the
new tenants or terms of the leases, which deprives the owners of
their possessory interests and results in...takings" (Seawall, 74
NY2d, at 106, supra; see also, Heart of Atlanta Motel, Inc. v
United States, 379 US 241, 261). In this regard, plaintiffs'
"investment backed expectations" have been and will continue to
be realized as there is no evidence that plaintiffs intend to
sell or otherwise change the use of the subject apartments.

Plaintiffs have failed to demonstrate that Chapter 940 effects a
regulatory taking. Because Chapter 940 substantially advances
legitimate state interests and does not deprive plaintiffs of any
economically beneficial use of their property, I conclude Chapter
940 withstands constitutional scrutiny.

Accordingly, I would affirm the order of the Appellate Division.

F O O T N O T E

1. The Rent Stabilization Law was adopted in 1969 as a
"compromise solution" to runaway rent increases affecting some
400,000 post-1947 units previously unregulated and to allay
builders' fears that rent control would be extended to new
construction (see, 8200 Realty Corp. v Lindsay, 27 NY2d 124, 136-
137; Sullivan v Brevard Assocs, 66 NY2d 489-494).

* * * * * * * * * * * * * * * * *

Order reversed, with costs, Chapter 940 of the Laws of 1984
declared unconstitutional and case remitted to Supreme Court, New
York County, for further proceedings in accordance with the
opinion herein. Opinion by Judge Bellacosa. Judges Simons,
Titone, Mangano and Crew concur. Judges Levine and Ciparick
dissent and vote to affirm in separate dissenting opinions. Chief
Judge Kaye and Judge Smith took no part.

_________________________________________________________________________

Met Council, Inc. v. Crosson, 1994 N.Y. Int. 170

In the Matter of Met Council, Inc., &c., et al., Appellants,

v.

Matthew Crosson, as Chief Administrator of the Courts
of the State of New York, et al., Respondents

1994 N.Y. Int. 170 October 27, 1994

1 No. 158 [1994 NY Int. 170] Decided October 27, 1994

----------------------------------------------------------------
This opinion is uncorrected and subject to revision before
publication in the New York Reports.

Raun J. Rasmussen, for appellants. Kenneth Falk, for respondents.


SMITH, J.:

The principal issues presented are (1) whether Housing Court
Judges may hold over after the expiration of their five-year term
and (2) whether Housing Court Judges are subject to the
reappointment authority of the Chief Administrator of the Courts.



Jack Dubinsky and Emanuel Haber were originally appointed to five-
year terms as housing judges on July 23, 1981 and reappointed to
second five-year terms on July 23, 1986. Their second terms
expired on July 22, 1991. However, because respondents had not
yet completed their investigations of the qualifications of
Housing Judges Dubinsky and Haber for a third term, respondent
Silbermann, the Administrative Judge of the Civil Court of the
City of New York, issued letters extending their terms as housing
judges through September 23, 1992.

Harriet George was originally appointed to a five-year term as
housing judge on April 1, 1977, reappointed to a second five-
year term on April 1, 1982, and reappointed to a third five-year
term on April 1, 1987. Housing Judge George's third term expired
on March 31, 1992. Because respondents had not yet completed
their investigations of Housing Judge George's qualifications for
a fourth term, respondent Silbermann issued letters extending her
term as housing judge through September 23, 1992.

On July 14, 1992, petitioners commenced this proceeding in the
Appellate Division, pursuant to CPLR article 78, seeking judgment
prohibiting respondents from allowing Housing Judges Dubinsky,
Haber and George to continue to sit as housing judges, directing
respondents to remove them from their positions, and prohibiting
their reappointment to new terms unless they were appointed in
the same manner as new housing judges were appointed.
Approximately two weeks later, on August 4, 1992, respondents
reappointed Housing Judges Dubinsky, Haber and George as housing
judges for five-year terms.

Petitioners then served an amended petition, essentially seeking
the same relief as their original petition. The Appellate
Division denied petitioners' application and dismissed the
petition without opinion. Petitioners appeal, pursuant to leave
granted by this Court. Petitioners argue that housing court
judges may not hold over after the expiration of their five-year
terms; that respondents lacked authority to apply the
reappointment process to applicants whose terms as Housing Court
Judges had expired; and that the Civil Court Act mandates that
reappointment decisions be made by the Administrative Judge of
the Civil Court, not by the Chief Administrator of the Courts.

II

Chapter 982 of the Laws of 1972 amended the New York City Civil
Court Act (CCA) by inserting a new section 110 to establish the
Housing Part of the Civil Court of the City of New York. Section
110(f) of the Civil Court Act provided for the appointment of
"hearing officers" by the Administrative Judge of the Civil Court
from a list of persons found qualified by the "advisory counsel
(sic) for the housing part."

In Glass v Thompson (51 AD2d 69), the Appellate Division held
constitutional the appointment of hearing officers to preside
over non-jury trials in the Housing Part of the Civil Court. The
Court suggested that although hearing officers were able to
preside over housing matters and exercise judicial functions,
their office was distinct from that of a judge of the Civil
Court. Since judges of the Civil Court are elected or appointed
in accordance with Article VI of the State Constitution, the
Court in Glass determined that attorneys with special expertise
in housing matters who preside over proceedings in the Housing
Court  need not be selected in accordance with constitutional
provisions because as hearing officers they are essentially
referees, that is, nonjudicial officers of the court appointed to
assist it in the performance of its judicial functions (Glass v
Thompson, supra 51 AD2d, at 74).

Section 110 of the Civil Court Act was amended by Chapter 310 of
the Laws of 1978 to change references to "hearing officers" of
the housing part to "housing judges."[n 1] The intent of the
legislature in changing the title of hearing officer to housing
judge was to improve the stature of the officers who presided in
the Housing Court and thereby improve the stature and
effectiveness of the entire court.

Senator Manfred Ohrenstein, Minority Leader and sponsor of the
Senate bill, in his memorandum in support of the legislation,
explicitly stated that it was not the intent of this bill to
change the result in Glass v Thompson. Then Governor Hugh L.
Carey, in his memorandum approving the legislation, acknowledged
that the intent of the legislation was to "provide a change in
nomenclature from Hearing Officer to Housing Judge in an effort
to foster respect and establish the decorum needed in a judicial
proceeding" (Legislative Bill Jacket, L 1978, ch 310). Section
110 was amended a second time in 1984 in relation to housing
judges, to provide that housing judges are "duly constituted
judicial officers" (L 1984, ch 528). Governor Mario Cuomo stated
that the amendment was intended to clarify the nature of the 1978
amendment. It was not intended "to confer any additional
jurisdiction, powers, or benefits" on housing judges. (See,
Governor's Mem approving L 1984, ch 528, 1984 McKinney's Session
Laws of NY, at 3619.)

It is clear from this history that the legislative amendments to
Section 110 of the New York City Civil Court Act did little more
than change the title of hearing officer to housing judge, with
the 1984 amendment clarifying the intent of the 1978 amendment.
The effect of the amendments was not a delegation of new and
different powers or change in status. The nature and duties of
the position were not changed from "nonjudicial" when the title
was "hearing officer" to "judicial" as "housing judge." "Housing
Judges" remain essentially a form of "referee", nonjudicial
officers of the court, appointed to assist the judges of the
Civil Court in the performance of their judicial functions (Glass
v Thompson, supra, 51 AD2d 69 at 74).

As the 1978 and 1984 amendments to the Civil Court Act did not
intend to confer any additional benefit, status or privilege upon
housing judges, so, too, the statute did not intend housing
judges to be judicial officers within the meaning of Public
Officers Law Section Five.[n 2] Judicial officers cannot hold
over under Section 5 of the Public Officers Law but other
officers, including referees, can. Since hearing officers were
previously not prohibited from holding over after their terms had
expired, the same applies to housing judges, since only their
title and not the nature of their position has changed.

III

The New York City Civil Court Act, Section 110 (f), provides for
the appointment of housing judges and sets forth the criteria
required. This appointment is by the Administrative Judge from a
list of qualified applicants compiled by the Advisory Council for
the housing part. The Advisory Council is made up of 12
individuals from various backgrounds who conduct initial pre-
screening interviews and evaluations of applicants.[n 3] In
compiling this list, the Advisory Council considers "training,
interest, experience, judicial temperament and knowledge of
federal, state and local housing laws and programs" (CCA 110[f]).

The Civil Court Act section 110 (i) provides for reappointment of
housing judges as follows:

     Housing judges shall have been admitted to the bar of
     the state for at least five years, two years of which shall
     have been in active practice. Each housing judge shall serve
     full-time for five years. Reappointment shall be at the
     discretion of the administrative judge on the basis of the
     performance, competency and results achieved during the
     preceding term.

Petitioners contend that the reappointment of the three housing
judges was improper under CCA 110(i), arguing that once the
housing judges' term of office was up, they were no longer
housing judges for purposes of reappointment and were therefore
required to apply through the new appointment process. This
argument is not supported by the statute. The statute, CCA
§110(i), does not require that housing judges be reappointed
"before" their term has expired. The incumbent housing judges in
this case continued to be housing judges until they were
reappointed because they were lawfully holding over and there was
no vacancy in the office or lapse in their tenure. Therefore,
under these circumstances, there was no need to go through the
original screening process.

Alternatively, appellants argue that even if the reappointment of
the three housing judges was proper under CCA 110(i), the
reappointments were nonetheless void because the chief
administrator rendered the decision to reappoint and not the
administrative judge as expressly provided by the statute.

Notwithstanding that the Civil Court Act provides for appointment
and reappointment of housing judges by the Administrative Judge
of the Civil Court, (CCA 110(f), 110 (i)), the State
Constitution, Article VI, Section 28, expressly vests the chief
administrator, on behalf of the chief judge, with the broad power
to supervise the administration and operation of the Unified
Court System.[n 4] The powers of the chief judge are said to be
"complete" and may be exercised fully by the chief administrator
on behalf of the chief judge (see, Corkum v Bartlett, 46 NY2d
424, 428- 429). Similarly, title 22 of the New York Compilation
of Codes, Rules and Regulations, section 80.1(b)(3) states that
among the powers and duties of the chief administrator is the
power to appoint and remove all nonjudicial officers and
employees[n 5] (see, Durante v Evans, 94 AD2d 141, 144, affd for
reasons stated by App Div, 62 NY2d 719).

Although the title of hearing officer has been changed to housing
judge, the nature of the position has not changed. The
legislative amendments meant only to change the title of the
position, without conferring any additional benefit, status,
authority or privilege upon it. Housing judges are still
"nonjudicial officers of the court," as the court in Glass v
Thompson determined. As such, they are subject to the
constitutional appointment power of the chief administrator,
notwithstanding CCA 110. Since the appointment powers of the
chief administrator flow from the State Constitution, they cannot
be abrogated by statute. Thus, although the New York City Civil
Court Act provides that the administrative judge has the power of
appointment and reappointment of housing judges, it is the chief
administrator who in fact has the ultimate power of appointment
and reappointment. The New York City Civil Court Act must be read
together with, and be applied consistently with, the
Constitution.

Accordingly, the judgment of the Appellate Division should be
affirmed with costs.


FOOTNOTES

1. L 1978, ch 310. With the change in title of the hearing
officer, the legislative amendment also changed references to
judges of the housing court. References to actual judges of the
housing court were clarified by the simultaneous addition of the
terms "civil court" and "acting civil court" before the term
"judge" as it previously existed in the statute. This was an
attempt to distinguish between judges elected under the
provisions of Article VI of the State Constitution and hearing
officers, who were merely receiving a change in title.

2. POL §5 in pertinent part provides:

     Every officer except a judicial officer * * * having duly
     entered on the duties of the [the] office, shall * * * hold
     over and continue to discharge the duties of [the] office
     after the expiration of the term for which he shall have
     been chosen, until his successor shall be chosen and
     qualified; but after the expiration of such term, the
     office shall be deemed vacant for the purpose of choosing
     his successor.

3. This council was established pursuant to CCA 110(g) to assist
in the initial selection of new housing judges. The evaluation
and pre- screening of new applicants, followed by recommendations
by the Advisory Council is important, as these individuals are
new to the Unified Court System and court administrators are
generally unfamiliar with their backgrounds.

4. Article VI, §28(b) of the State Constitution provides:

     The chief administrator, on behalf of the chief judge, shall
     supervise the administration and operation of the unified
     court system. In the exercise of such responsibility, the
     chief administrator of the courts shall have such powers and
     duties as may be delegated to him by the chief judge and
     such additional powers and duties as may be provided by law.

5. 22 NYCRR 80.1, provides:

     (b) ". . . [T]he Chief Administrator shall:
     (3) appoint and remove, upon nomination or recommendation of
         the appropriate administrative judge,..., all
         nonjudicial officers and employees, ..."

* * * * * * * * * * * * * * * * *

Judgment affirmed, with costs. Opinion by Judge Smith. Judges
Simons, Titone, Bellacosa, Levine and Ciparick concur. Chief
Judge Kaye took no part.


_________________________________________________________________________

Nestor v. McDowell, 81 N.Y.2d 410 (1993)

Nestor v. McDowell, 81 N.Y.2d 410
(1993)

MARIANNE NESTOR, APPELLANT, v. JAY H. MCDOWELL,
ET AL., RESPONDENTS. 81 N.Y.2d 410, 615 N.E.2d 991,
599 N.Y.S.2d 507 (1993).

June 10, 1993

1         No.   124  [1993 N.Y. Int. 127]

Decided June 10, 1993
This opinion is uncorrected and subject to revision before publication in the New York
Reports.

Stuart F. Shaw, for Appellant.
Edwin David Robertson, for Respondents.

BELLACOSA, J.:

          The central issue on this appeal is whether the
opportunity to cure the breach of a lease condition, a remedy
available under RPAPL 753(4), applies to ejectment actions
commenced in the Supreme Court by an owner of a rent-stabilized
cooperative apartment.

          The surviving defendant-tenant, Helen Diamond (her
husband, defendant Sidney Diamond, died in January 1992) has
resided in the rent-stabilized apartment at issue, a 5-room
leasehold located on Fifth Avenue in Manhattan, since 1965.
Plaintiff purchased the shares and ownership of the apartment in
1982 subject to the tenants' occupancy.  In 1983, after serving
three unfruitful notices on defendants to cure a violation of the
lease (defendants' installation of a washing machine and associated
plumbing, without consent of the landlord), plaintiff Marianne
Nestor began efforts to oust the tenants.  In 1985, she started the
instant action in Supreme Court seeking, among other branches of
relief, ejectment of the tenants on the ground that they had
breached the lease.  Although Supreme Court found a technical
breach, it granted defendants time to cure the violation.  The
Appellate Division affirmed and held that RPAPL 753(4) was
available in an ejectment action in Supreme Court (Nestor v
Diamond, 174 AD2d 306).  This Court granted leave to appeal and now
affirms the order of the Appellate Division.

          Section 753(4) of the RPAPL states that "[i]n the event
that such proceeding is based upon a claim that the tenant or
lessee has breached a provision of the lease, the court shall grant
a ten day stay of issuance of the warrant, during which time the
respondent may correct such breach".  The phrase "such proceeding"
refers to "proceeding[s] to recover the possession of premises" as
defined in RPAPL 753(1), more commonly referred to as summary
proceedings which are customarily venued in the Civil Court of the
City of New York.

          Plaintiff relies upon the "such proceeding" phrase and
the word "warrant" to urge her construction of RPAPL 753(4); i.e.,
that its remedy for allowing a cure of this kind of lease violation
should be available only in summary proceedings commenced in the
Civil Court.  She argues that since a warrant is only issued in
Civil Court actions, as contrasted to writs of assistance or orders
of ejectment in Supreme Court actions, the use of the word
"warrant" explicitly limits the availability of RPAPL 753(4)'s
remedial opportunity to the Civil Court.  We conclude that
plaintiff's argument is not persuasive, because ordinary statutory
construction rules demonstrate that there is no impediment to the
Supreme Court of the State of New York exercising jurisdiction in
these circumstances (see, Steinberg v Steinberg, 18 NY2d 492, 497;
McKinney's Cons Laws of NY, Book 1, Statutes §,§ 92(b), 95, 96).

          It is a basic tenet of statutory construction that the
"mischief to be corrected" and the spirit and purpose of the
statute must be considered (Toomey v New York State Legislature, 2
NY2d 446, 448; 1 Kent's Commentaries 462, quoted in Matter of Di
Bruzzi, 303 NY 206, 220).  RPAPL 753(4) "is procedural and remedial
in nature and it should be liberally construed to spread its
beneficial effects as widely as possible" (Post v 120 East End Ave.
Corp., 62 NY2d 19, 24).  The statute was enacted to "permit tenants
to remain in possession by curing the violation after the rights of
the parties have been adjudicated" (id., at 27) and to obviate "the
need, in most cases, for the tenant to seek a Yellowstone
injunction" (Killington Investors v Leino, 148 AD2d 334, 336; see,
First Natl. Stores v Yellowstone Shopping Center, 21 NY2d 630 [a
so-called Yellowstone injunction prevents expiration of the lease
by tolling the running of the cure period]).  The Appellate
Division in the Leino case correctly summed up the rationale on
statutory construction and policy grounds for the view we adopt:

       [A] residential tenant who forebears from
       commencing a declaratory judgment, believing
       that he [or she] can obtain complete relief
       in the Civil Court, would be deprived of the
       benefit of the statute if the landlord
       unexpectedly commences an action for
       ejectment in Supreme Court instead of a
       summary holdover proceeding in the Civil
       Court, if we were to hold that RPAPL 753(4)
       [does] not apply.  The result would clearly
       frustrate the very purpose underlying the
       statute (id.).

Thus, both courts in the instant matter correctly ruled against
plaintiff and in favor of the defendants on the essential ejectment
effort.

          This particular dispositive statutory construction
analysis can also be placed in some perspective in light of the
State Constitution's conferral of unqualified general jurisdiction
upon the Supreme Court (NY Const Art VI, § 7[a]).  That jurisdiction
"includes 'all cases of every description in law and equity, from
the most important and complicated to the most simple and
insignificant'" (Maresca v Cuomo, 64 NY2d 242, 252, appeal
dismissed 474 US 802, quoting DeHart v Hatch, 3 Hun 375, 380; see
also, Thrasher v U.S. Liab. Ins. Co., 19 NY2d 159, 166).  Thus,
when the Legislature creates new remedies and classes of actions or
procedures that are tracked to a particular court, it does not
divest Supreme Court of its historic general power (see, NY Const
Art VI, § 7[b]; Siegel, NY Practice, at 15 [2d ed 1991]).  The
Supreme Court, of course, also retains wide discretion to reject or
to retain cases seeking its rulings in appropriate and exceptional
procedural circumstances, such as this one.

          Thus, we conclude that as a matter of statutory
interpretation, the reference in RPAPL 753(4) to "summary
proceedings" and "warrants" should not be construed in these
circumstances to incorporate an absolute bar against Supreme Court
exercising its authority with respect to plaintiff-owner's
ejectment action.

          Plaintiff's appeal includes an ancillary argument that
she was nevertheless entitled to attorney's fees because the lease
specifically provided that the defendant tenant would be liable for
"[such] expenses as the landlord may incur for legal expenses" as a
result of any breach of the lease.

          The Appellate Division refused to grant attorney's fees
to plaintiff, relying on Nesbitt v New York Conciliation and
Appeals Bd. (56 NY2d 340).  The Appellate Division's rationale was
that the plaintiff's failure to tender a renewal lease to
defendants, as directed, in effect cancelled plaintiff's right to
attorney's fees.  The issue in Nesbitt was whether a "landlord's
refusal to offer renewal leases * * * constituted a failure to
perform a covenant or agreement as is requisite to the application
of section 234 of the Real Property Law" (id., at 346).  Since Real
Property Law § 234 is not implicated in this case, Nesbitt is
inapplicable and the Appellate Division's result in this respect,
although correct, rests on an incorrect basis.

          Ordinarily, only a prevailing party is entitled to
attorney's fees (see, Hooper Assocs., Ltg. v AGS Computers, Inc.,
74 NY2d 487, 491; A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1,
5; Mighty Midgets, Inc. v Centennial Ins. Co., 47 NY2d 12, 21; City
of Buffalo v Clement Co., Inc., 28 NY2d 241, 263).  Inasmuch as
plaintiff has not prevailed with respect to the central relief
sought, that is, a possessory judgment, we conclude that she is not
entitled to attorney's fees under the facts and circumstances of
this case.

          Accordingly, the order of the Appellate Division should
in all respects be affirmed, with costs.

*   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *   *

Order affirmed, with costs.  Opinion by Judge Bellacosa.  Chief
Judge Kaye and Judges Simons, Titone, Hancock and Smith concur.


_________________________________________________________________________

Rent Stabilization Ass'n of New York City, Inc. v. Higgins, 83 N.Y....

RENT STABILIZATION ASSOCIATION OF NEW YORK CITY, INC., ET AL.,
APPELLANTS,
AND SMALL PROPERTY OWNERS OF NEW YORK,
INTERVENOR-APPELLANT,

v.

RICHARD L. HIGGINS, &C., RESPONDENT,
AND ROBERT WELLS, ET AL., INTERVENORS-RESPONDENTS.

83 N.Y.2d 156, 630 N.E.2d 626, 608 N.Y.S.2d 930 (1993).
December 21, 1993

1 No. 259 [1993 NY Int. 273]
Decided December 21, 1993
---------------------------------------------------------------------------
This opinion is uncorrected and subject to revision before publication in
the New York Reports.

Sherwin Belkin, for Appellants.
Ronald D. Hariri, for Intervenor-appellant.
Cullen S. McVoy, for Respondent.
Paris R. Baldacci, for Intervenors-respondents.
Community Housing Improvement Program, Inc.; Pacific Legal Foundation; New
York State Tenant and Neighborhood Coalition, Inc., et al.; Eastern
Paralyzed Veterans Association, et al.; City of New York; and The Real
Estate Board of New York, Inc., amici curiae.

KAYE, CHIEF JUDGE:

Essentially two challenges are mounted by appellant-property owners to
regulations promulgated by respondent Division of Housing and Community
Renewal (DHCR) enlarging the class of "family members" entitled to succeed
to a rent-regulated apartment on the death or departure of the tenant of
record. As did the Appellate Division, we conclude first that the
regulations are within the agency's rulemaking authority, and second that
no unconstitutional "taking" was effected.

I.

We begin with the background of the challenged regulations. In response to
what it found to be a severe housing shortage following World War II, the
legislature enacted laws providing for rent control and, later, rent
stabilization.[n 1] Perceiving that continuing need throughout the ensuing
decades, the legislature has periodically extended rent regulation to the
present day, most recently providing for decontrol only of apartments with
monthly rents in excess of two thousand dollars (see, Rent Regulation
Reform Act of 1993, L 1993, ch 253 [extending rent control and rent
stabilization until June 15, 1997]).

The legislature in 1983 designated DHCR "the sole administrative agency to
administer the regulation of residential rents" under the rent control and
rent stabilization statutes (Omnibus Housing Act, L 1983, ch 403, §
3), and in 1985 additionally granted DHCR authority to amend the Rent
Stabilization Code (a body of regulations previously administered by a
private association of property owners) (see, L 1985, ch 888, § 2).

The rent control statute accorded noneviction protection to a "tenant,"
meaning that the tenant had the right to remain after expiration of the
original tenancy (see, McKinney's Uncons Laws of NY § 8585[1] [1984];
Administrative Code § 26-408[a] [1985]). In the event of the tenant's
death, the rent control regulations promulgated under the statute
additionally prohibited eviction of the surviving spouse or a family member
who had been living with the tenant (see, 9 NYCRR 2104.6[d] [1987];
2204.6[d] [1987]). That protection was later extended to family members
living with a tenant who voluntarily vacated the apartment (see, Matter of
Herzog v Joy, 74 AD2d 372, 376, affd 53 NY2d 821).

The rent stabilization statute required that a renewal lease be offered to
a "tenant" (see, Administrative Code § YY51-6.0[c][4] [1969]), but
nothing in the regulations elaborated upon the statutory language. Thus,
unlike rent control, under rent stabilization only the tenant of record was
entitled to a renewal lease (see, Sullivan v Brevard, 66 NY2d 489, 493). In
1987, however, DHCR amended the rent stabilization regulations to provide
noneviction protection to "family members," a term defined in the Code to
include 24 specified blood-or- marriage relationships (see, 9 NYCRR
2520.6[o] [1987]). Where the tenant of record died, family members who had
resided in the unit for at least two years (one year if the tenant was
elderly or disabled) were entitled to succeed to the tenancy; where the
tenant of record voluntarily vacated the apartment, family members who had
resided in the unit from the inception of the tenancy or commencement of
the relationship were entitled to succeed to the tenancy (see, 9 NYCRR
2523.5[b] [1987]).

DHCR's amendments to the Rent Stabilization Code were sustained by the
Appellate Division as an appropriate exercise of the agency's authority
(see, Festa v Leshen, 145 AD2d 49) and are not challenged on the present
appeal.

This Court in 1989 determined that "family member" as used in the rent
control regulations included the life partner of a deceased tenant who had
resided with the tenant for many years in a familial-type relationship
(see, Braschi v Stahl Assocs. Co., 74 NY2d 201, 211; see also, E. 10th St.
Assocs. v Estate of Goldstein, 154 AD2d 142 [extending holding in Braschi
to rent stabilization regulations]). Months later, DHCR promulgated the
regulations at issue on this appeal.

II.

The regulations were first issued by DHCR on November 8, 1989 as emergency
regulations extending noneviction protection to qualified family members of
a tenant of record in all rent-regulated housing where the tenant vacated
the unit. The regulations were made permanent on March 20, 1990 after
public hearings and became effective April 4, 1990.[n 2]

The regulations enlarged the definition of "family member," beyond blood or
marriage, to include:

     Any other person residing with the tenant or permanent tenant in
     the housing accommodation as a primary or principal residence,
     respectively, who can prove emotional and financial commitment
     and interdependence between such person and the tenant or
     permanent tenant. Although no single factor shall be solely
     determinative, evidence which is to be considered in determining
     whether such emotional and financial commitment and
     interdependence existed may include, without limitation, such
     factors as listed below. In no event would evidence of a sexual
     relationship between such persons be required or considered.

The specified relevant factors are i) longevity of the relationship; ii)
whether the parties share household expenses; iii) intermingling of
finances; iv) whether they engage in family-type activities; v) whether
they have formalized legal obligations toward each other; vi) whether they
hold themselves out as family members; vii) whether they regularly perform
family functions; and (viii) any other pattern of behavior that evidences
an intention to create a long term, emotionally committed relationship. The
amendments extend noneviction protection uniformly to family members
whether the tenant dies or vacates voluntarily, so long as the family
member has resided in the apartment for two years (one year where the
tenant is elderly or disabled), or has resided with the tenant from the
inception of the tenancy or the commencement of the relationship.

As the grounds for its action, DHCR specified New York's chronic low rental
vacancy rate for affordable units, increasing homelessness and poverty, the
AIDS epidemic and the rise in non- traditional families (including same-sex
couples, de facto marriages, single parent households and other living
arrangements no longer exceptional). The regulations, according to DHCR,
were "intended to clarify a non-traditional family member's right to remain
in his or her home, particularly at a time when a significant percentage of
these households may be vulnerable to the AIDS epidemic." In extending the
protection to all qualified family members regardless of the reason for the
tenant's permanent departure, DHCR claimed that it redressed a situation
that in its experience had led to illogical and unjust results.

In releasing the regulations, DHCR stated that New York's crisis in
affordable housing posed an immediate threat requiring emergency
regulations because, with tenants dying or vacating apartments daily,
landlords and remaining occupants needed guidance and some measure of
consistency in determining who would be permitted to remain in
rent-regulated housing and who could be evicted. In assessing the added
burden on property owners, DHCR concluded that the average building's rent
rolls would be reduced by .045% due to fewer regulated apartments subject
to a vacancy increase in any given year. DHCR further found the effect of
the regulations directly proportional to the number of units owned, thus
concluding that small property owners would not be disproportionately
affected. Finally, DHCR noted that an owner's right to collect the
regulated rent and evict undesirable tenants would be unaffected by the new
regulations.

Appellants sought a preliminary injunction and a declaration that the new
regulations were unconstitutional and invalid, and Supreme Court
temporarily restrained their implementation; the Appellate Division,
however, deeming the TRO a preliminary injunction, reversed and vacated the
restraint (164 AD2d 283). After Supreme Court granted respondents'
cross-motion for a declaration that the regulations were within the proper
exercise of DHCR's authority, appellants sought a direct appeal to this
Court, which we transferred to the Appellate Division on the ground that
questions other than the constitutional validity of a statute were involved
(see, CPLR 5601[b][2]). The Appellate Division upheld the regulations as a
valid exercise of DHCR's authority for the reasons set forth in its opinion
vacating the preliminary injunction, adding that the regulations
substantially advance a legitimate governmental interest under the most
recent United States Supreme Court opinions addressing regulatory takings
(see, Lucas v South Carolina Coastal Council, 505 US ___; Yee v City of
Escondido, 503 US ___). Because a substantial constitutional question is
directly presented, appeal to this Court lies as of right (see, CPLR
5601[b][1]).

III.

We first address appellants' assertion that DHCR was without authority to
adopt the challenged regulations.

Appellants recognize that the legislature has provided DHCR a broad mandate
to promulgate regulations in furtherance of the rent control and rent
stabilization laws that will "inevitably require some changes in the legal
relationship between landlords and tenants" (see, Matter of Versailles
Realty Co. v New York State Div. of Hous. and Community Renewal, 76 NY2d
325, 328-329, rearg denied 76 NY2d 890),[n 3] and indeed do not challenge
earlier regulations providing for family succession to rent-regulated
housing. They urge, however, that with the most recent regulations, DHCR
has overstepped its mandate and invaded the province of the legislature, in
violation of the constitutional separation of powers.

As an arm of the executive branch of government, an administrative agency
may not, in the exercise of rulemaking authority, engage in broad-based
public policy determinations (see, Boreali v Axelrod, 71 NY2d 1, 9). In
Boreali, we concluded that the difficult-to-demarcate line between
administrative rulemaking and legislative policymaking had been
transgressed, and invalidated regulations promulgated by the Public Health
Council prohibiting indoor smoking in specified public areas on the ground
that the regulatory scheme was improperly based upon policy considerations
originating with the agency and not the legislature. We identified four
"coalescing circumstances" indicating that the agency, in enacting the
regulations, had usurped the role of the legislature in making public
policy assessments.

First, the agency created exemptions from the smoking ban for particular
indoor areas, such as trade shows, conventions and bars, or upon a showing
of financial hardship, from which we concluded that the agency had
improperly weighed competing health and public policy concerns. Exempting
certain indoor areas from these regulations required consideration not of
health concerns--the agency's proper focus--but of competing social and
political issues. Second, the agency enacted the smoking ban on a clean
slate, exceeding its proper role of merely filling the interstices of a
legislative mandate. Third, the legislature itself had repeatedly failed to
reach agreement on indoor smoking, suggesting that the subject was one that
required resolution of competing policy interests. Finally, the regulatory
scheme--"a simple code describing the locales in which smoking would be
prohibited and providing exemptions for various special interest
groups"--did not require the agency's particular competence in the field of
public health.

Such circumstances are not present in this case. Rather, in defining the
persons to be afforded noneviction protection in an ongoing housing crisis,
DHCR has acted within its competence and authority (see, Matter of
Consolidated Edison Co. v Department of Environmental Protection, 71 NY2d
186, 191-192; Matter of Nicholas v Kahn, 47 NY2d 24, 31).

Most significantly, DHCR has not acted on a clean slate-- noneviction
protection in rent-regulated housing was first created by the legislature
in the rent control and rent stabilization laws (see, McKinney's Uncons
Laws of NY § 8585[1]; Administrative Code §§ 26- 408[a],
26-511[c][4]). This protection has in the past been enlarged by the agency,
after which the legislature has voted to extend rent regulation without
modifying those provisions.

The challenged regulations "fill in the interstices" of the legislative
mandate (see, Versailles Realty, 76 NY2d at 329) by redefining the
protected class of people to include those who, in DHCR's experience as
sole administrator of residential rent regulation and adjudicator of
eviction disputes, are most in need of protection against loss of their
homes in a continuing housing emergency. Adjustment of the existing scheme
in light of the agency's technical competence is well within the proper
rulemaking function of this agency. Moreover, unlike the Public Health
Council in Boreali, DHCR has not enacted categorical exemptions reflecting
accommodations to special interest groups.

Finally, although appellants point to 27 bills introduced in the
legislature between 1986 and 1989 relating to succession rights, the
legislature has not sought to alter succession rights in the years
following DHCR's emergency and later permanent regulations (see also,
Festa, 145 AD2d at 63). Of particular significance is the fact that the
legislature this year made substantial reforms in rent regulation,
including decontrol of luxury units, without addressing noneviction
protection (see, Rent Regulation Reform Act of 1993, L 1993, ch 253). We
cannot agree with appellants that, in these circumstances, the failed bills
alone warrant the conclusion that the agency has exceeded its mandate (see
also, Boreali, 71 NY2d at 11).

Thus, we reject appellants' contention that DHCR acted beyond its
authority.

IV.

Appellants next urge that the challenged regulations are unconstitutional
on their face because, without just compensation, they require owners of
rent-regulated housing to suffer a permanent physical occupation of their
property; deprive them of the beneficial use of their property; and fail to
substantially advance a legitimate governmental objective (see, NY Const,
art I, § 7[a]; US Const, 5th Amend).

This appeal does not put before us the question whether rent regulation
itself constitutes a taking--a question that has excited recent scholarly
interest (see, e.g., Radford, Regulatory Takings Law in the 1990's: The
Death of Rent Control?, 21 Sw U L Rev 1019 [1992]; Note, Bright Lines in
the Big City: Seawall, Tenant Succession Rights, and the Jurisprudence of
Takings, 91 Colum L Rev 609 [1991]; but see, Pennell v City of San Jose,
485 US 1, 12, n 6; Block v Hirsh, 256 US 135, 156; Loab Estates, Inc. v
Druhe, 300 NY 176, 180). Appellants challenge only the recent
family-succession amendments to the rent control and rent stabilization
regulations. We note, further, that in this facial challenge, appellants
bear the heavy burden of overcoming the presumption of constitutionality
that attaches to the challenged enactments (see, e.g., De St. Aubin v
Flacke, 68 NY2d 66, 76; Loretto v Teleprompter Manhattan CATV Corp., 458 US
419, 440). Appellants have failed to sustain that burden.

A. Physical Occupation

Governmental action that compels an owner to endure a permanent physical
occupation of its property effects an unconstitutional taking per se (see,
Yee, 503 US at ___ [112 S Ct at 1526]; Loretto, 458 US at 434-435).
Appellants claim that they are forced by the new regulations to accept
strangers as tenants and that these tenancies, no longer restricted to
blood-or-marriage relatives of the original tenant, will exist in
perpetuity. Because the co- residency requirement in the case of a tenant
who voluntarily vacates has been reduced to the shorter of two years (one
year in the case of elderly or disabled tenants) or the inception of the
tenancy or commencement of the relationship, appellants further complain
that the new regulations make it easier to qualify for protection.

At the outset, we are unpersuaded by the argument that the new regulations
have created perpetual tenancies. An owner's right to evict an
unsatisfactory tenant or convert rent-regulated property to other uses
remains unaffected (see, 9 NYCRR 2104, 2204, 2504, 2524; Yee, 503 US at ___
[112 S Ct at 1528-1529]). That a rent-regulated tenancy might itself be of
indefinite duration--as has long been the case under rent control and rent
stabilization--does not, without more, render it a permanent physical
occupation of property (see, Manheim, Tenant Eviction Protection and the
Takings Clause, 1989 Wisc L Rev 925, 991-993 [1989]).

Nor does the fact that an owner must offer a renewal lease to a departed
tenant's newly-defined family member--potentially a stranger to the
owner--give rise to such a physical occupation (see, Yee, 503 US at ___
[112 S Ct at 1528]). In Seawall Assocs. v City of New York (74 NY2d 92,
105, cert denied 493 US 976), we held that Local Law 9, which required
owners of single room occupancy housing accommodations to rehabilitate and
rent out their units, forcing them "to subject their properties to a use
which they neither planned nor desired," constituted a physical taking per
se. By contrast, in Yee, the Supreme Court held that requiring owners of
mobile home parks to rent the "pad" beneath a mobile home at controlled
rents to any purchaser of the mobile home did not constitute a physical
occupation because the owners had "voluntar[ily] open[ed] their property to
occupation by others" and thus could not "assert a per se right to
compensation based on their inability to exclude particular individuals"
(Yee, 503 US at ___ [112 S Ct at 1530]).

The difference--dispositive here--between requiring an owner to accept a
purported stranger as a tenant and compelling the owner to rent out single
room occupancy accommodations is in the owner's voluntary acquiescence in
the use of its property for rental housing (see, Yee, 503 US at ___;
Federal Communications Commn. v Florida Power Corp., 480 US 245, 252-253;
see also, Seawall, 74 NY2d at 105). As we noted in Seawall, "it is the
forced occupation[,] * * * not the identities of the new tenants or the
terms of the leases, which deprives the owners of their possessory
interests and results in physical takings" (Seawall, 74 NY2d at 106).
Indeed, once a property owner decides to rent to tenants, the
antidiscrimination laws eliminate an owner's unfettered discretion in
rejecting tenants (see, Yee, 503 US at ___ [112 S Ct at 1530]; see also,
Heart of Atlanta Motel, Inc. v United States, 379 US 241; Manheim, Tenant
Eviction Protection and the Takings Clause, 1989 Wisc L Rev at 997-998).

In any event, a "family member" for noneviction purposes, applying all of
the criteria established by DHCR, is no more likely to be a stranger to the
owner than a family member as formerly defined. This is so because, under
either definition, the family member entitled to noneviction protection
must have occupied the apartment with the tenant of record in a long-term,
committed relationship (to be determined on a case-by-case basis in
accordance with the specified criteria). In fact, the challenged
regulations additionally permit the owner to request, when offering a
renewal lease, the names of all co-occupants and whether they qualify as
family members (9 NYCRR 2104.6[d][2], 2204.6[d][2], 2503.5[e], 2523.5[e]).

Because the challenged regulations may require the owner- lessor to accept
a new occupant but not a new use of its rent- regulated property, we
conclude that appellants have failed to establish their claim that,
facially, a permanent physical occupation of appellants' property has been
effected.

B. Regulatory Taking

As an alternative facial challenge, appellants urge that the regulations
effect an impermissible regulatory taking, which occurs when governmental
action forces some people alone to bear burdens that, in fairness, ought to
be borne by society at large (see, Seawall, 74 NY2d at 107). Regulation of
private property constitutes an unconstitutional taking if it denies an
owner economically viable use of the property (a per se regulatory taking),
or if it does not substantially advance legitimate State interests
(Seawall, 74 NY2d at 107; Lucas, 505 US at ___ [112 S Ct at 2893]; Nollan v
California Coastal Commn., 483 US 825, 834).

Appellants claim, first, that the new regulations deprive them of both the
benefit of rental increases that occur upon vacancy and the reversionary
interest in their property. However, a regulation effects a per se
regulatory taking only in the relatively rare situation where "the owner of
real property has been called upon to sacrifice all economically beneficial
uses in the name of the common good, that is, to leave [the] property
economically idle" (Lucas, 505 US at ___ [112 S Ct at 2895]). Here, the
regulations do not affect the owner's right to receive the regulated rents,
unchallenged as a reasonable return. Moreover, because the tenancies are
not perpetual (as discussed above), the owners are not deprived of their
reversionary interest (compare, 520 E. 81st St. Assocs. v Lenox Hill Hosp.,
157 AD2d 138, 150, revd on other grounds 77 NY2d 944). We thus conclude
that the owners have not met their burden of showing the requisite
deprivation of economically beneficial use of their property (see, Lucas,
505 US at ___ [112 S Ct at 2893, n 6]).

Alternatively, appellants maintain that DHCR has failed to demonstrate the
challenged regulations substantially advance the concededly legitimate
governmental objectives of prevention of unwarranted evictions and
alleviation of homelessness (see, Seawall, 74 NY2d at 111). The absence of
a close causal nexus between a regulated use of the property and the
problem sought to be ameliorated may invalidate a regulation (see, Nollan,
483 US at 837). The owners insist that rent regulation perpetuates rather
than alleviates the housing shortage in New York, citing evidence that,
faced with a lower overall return from a building, owners will invest less
in repairs, hastening the building's deterioration.

The question before us, however, is not the general wisdom or desirability
of present rent regulation (the statutes and regulations combined) to
address the State's housing situation--that is a question for the
legislature. Rather, the question we decide is whether there is a close
causal nexus between the challenged regulations and the stated purpose of
preventing the eviction and resulting vulnerability to homelessness of the
identified beneficiaries (see, Nollan, 483 US at 837; Seawall, 74 NY2d at
112). We agree with the Appellate Division that there is.

People who would, absent the regulations, be threatened with eviction from
their homes may now have the right to remain. In Seawall, on the other
hand, forcing owners to let single room occupancy accommodations did not
substantially advance the City's interest in alleviating homelessness
because those units would not necessarily have been rented to homeless or
potentially homeless persons (Seawall, 74 NY2d at 111, 112, n 11). The
designation of classes of individuals to whom DHCR has extended noneviction
protection--persons deemed by the agency to be threatened with loss of
their homes, and therefore in need of such protection--is a matter that
falls within the agency's expertise (see, Teachers Ins. and Annuity Assn. v
Landmarks Preservation Commn., 82 NY2d 35, ___).[n 4]

Thus, we conclude that no unconstitutional taking has been demonstrated.

V.

Appellants' miscellaneous points are without merit. DHCR has complied with
the State Administrative Procedure Act: appellants do not dispute that DHCR
filed the proposed regulations with the Secretary of State, submitted a
notice of adoption for publication in the State Register, issued
appropriate regulatory impact statements and other analyses and held a
public hearing (see, State Administrative Procedure Act §§ 202,
202-a). Nor do we agree that the regulations are impermissibly vague. The
factors to be considered in determining the existence of a qualifying
relationship are objective, detailed and specific, and provide ample
guidance in identifying the commencement of the relationship despite the
absence of a marriage certificate or other legal document. Appellants'
remaining contentions are without merit.

Accordingly, the order of the Appellate Division should be affirmed, with
costs.

FOOTNOTES

1. See, Emergency Housing Rent Control Law (L 1946, ch 274, as amended
[rent control outside New York City]); Local Emergency Housing Rent Control
Act (L 1962, ch 21, as amended [rent control within New York City]); Rent
Stabilization Law (Administrative Code of the City of New York §§
26-501 to 26-520, as amended [1962] [rent stabilization within New York
City]); and Emergency Tenant Protection Act (L 1974, ch 576, as amended
[rent stabilization outside New York City]).[return to text]

2. See, Rent and Eviction Regulations (9 NYCRR 2104.6[d] [rent control
outside New York City]; 2204.6[d] [rent control within New York City]);
Emergency Tenant Protection Regulations (9 NYCRR 2500.2[n], 2503.5[d] [rent
stabilization outside New York City]); Rent Stabilization Code (9 NYCRR
2520.6[o], 2523.5[b] [rent stabilization within New York City]).[return to
text]

3. See, McKinney's Uncons Laws of NY § 8584(4) (DHCR empowered to
"adopt, promulgate, amend or rescind such rules, regulations and orders as
it may deem necessary or proper to effectuate the purposes of" rent
control); Administrative Code § 26-405(g)(1) (same); McKinney's Uncons
Laws of NY § 8630 (DHCR authorized to implement "appropriate" rent
stabilization regulations); Administrative Code § 26-511 (DHCR
authorized to amend Rent Stabilization Code to "protect tenants and the
public interest").[return to text]

4. As we noted in Seawall (74 NY2d at 107, n 6), examination of the owners'
"reasonable investment-backed expectations" (see, Lucas, 550 US at ___ [112
S Ct at 2895 n 8]; Penn Cent. Transp. Co. v New York City, 438 US 104, 124)
is not relevant to a facial challenge involving a per se regulatory taking.
Were we to examine appellants' expectations in assessing their broader
facial challenge, we would conclude in any event that frustration of their
asserted "expectation"--that the class of persons entitled to noneviction
protection would not be enlarged--is insufficient to satisfy their burden
in establishing a taking (see, Penn Cent., 438 US at 136; see also,
Manheim, Tenant Eviction Protection and the Takings Clause, 1989 Wisc L Rev
at 971).[return to text]

---------------------------------------------------------------------------
BELLACOSA, J. (concurring):

Chief Judge Kaye's Opinion of the Court cogently distinguishes respondents'
regulations, challenged on this record, from the respective constitutional
limitations on governmental actions found to have been violated in Boreali
v Axelrod (71 NY2d 1) and Seawall Assocs. v City of New York (74 NY2d 92,
cert denied 493 US 976). I therefore concur and join fully in her Opinion.
Because I perceive significant practical and governance concerns that merit
close attention as an outgrowth of this decision, I add these observations.

In the distribution and delegation of governmental powers, it is quite
momentous that any administrative agency should possess the potent public
policy power to extend the durational and relational sweep of the plurality
rationale of Braschi v Stahl Assocs. Co. (74 NY2d 201), including fully
into the rent stabilization category and more widely than was allowed even
in the rent control field of that case. The case-by-case application of
this judicially-approved regulatory initiative adds layers of great
sensitivity and breadth to the implementation of this case. However
high-purposed, well- intentioned and possessed of special expertise
respondents' agency is, the societal equation is delicately weighted with
practical, legal and fiscal consequences on all sides. Thus, while I also
agree with the Chief Judge's acknowledgement of the primacy of legislative
choices in the field (Majority opn, at 17), I believe it useful to go
farther and urge the Legislature to carefully assess the sweeping power it
impliedly invested in this administrative agency in the execution of a
unique human sheltering mission.

In a similar cautionary frame of thought with respect to ensuing judicial
branch responsibilities, I also believe that as- applied controversies
under the challenged regulations, in contradistinction to the facial
challenge of this case, will be profound (Seawall Assocs. v City of New
York, 74 NY2d 92, supra). Diminution of alienation and value of affected
properties, examined under an as-applied microscope, are bound to seriously
affect many people, landlords and tenants alike, and the availability of
sufficient, appropriate and affordable dwelling places. It would seem that
as-applied challenges will inevitably compel courts to examine tenancy
sequences in potentially long and somewhat indefinite time lines and
relationships. This will be complicated by the substantial administrative,
quasi-adjudicative tasks necessarily implicated. It is virtually certain
that long, successive successorships to rent stabilized leaseholds will not
be just theoretical possibilities because, markets being markets, they are
likely to bloom as perennials, becoming functionally transformed into
perpetual stakeholds. The Legislature should satisfy itself, as the courts
will have to, that unwarranted de facto results from administrative quasi-
judicial determinations do not constitute the functional equivalent of
divestitures from landowners of reversionary rights to their properties
without just compensation and due process.

* * * * * * * * * * * * * * * *

Order affirmed, with costs. Opinion by Chief Judge Kaye. Judges Simons,
Titone, Hancock, Bellacosa and Levine concur, Judge Bellacosa in a separate
opinion. Judge Smith took no part.


_________________________________________________________________________


Andrew Duell v. Liza Condon, 1995 N.Y. Int. 12. February 9, 1995

IN THE MATTER OF ANDREW DUELL ET AL., APPELLANTS, v. LIZA CONDON, ET
AL.,
RESPONDENTS.

1995 N.Y. Int. 12.
February 9, 1995

1 No. 15 [1995 NY Int. 012]
Decided February 9, 1995
---------------------------------------------------------------------------
This opinion is uncorrected and subject to revision before publication in
the New York Reports.

Jeffrey S. Goldberg, for Appellants.
Joseph H. Lessem, for Respondent Condon.

SIMONS, J.:

The question submitted on this appeal is whether the provisions of section
234 of the Real Property Law which permit successful tenants in
landlord/tenant disputes to recover attorneys' fees, may be applied in this
proceeding involving a statutory tenant. We conclude that they may and
therefore affirm.


In October of 1960, Edwin and Phyllis Condon executed a two-year lease for
a seven room apartment on Washington Square North in New York City. The
lease was not renewed upon its expiration in 1962; at that time, the
Condons became statutory tenants under the recently enacted local rent
control laws (see, Local Emergency Housing Rent Control Act, L 1962, ch 21;
New York City Rent Control and Rehabilitation Law, Loc. L. 1962, No. 20).
After the death of her father in 1973, the Condons' adult daughter,
respondent Liza Condon, returned to the apartment to reside with her mother
and upon Phyllis' death in 1986, Liza became the statutory tenant (see, New
York City Rent and Eviction Regulations, 9 NYCRR 2204.6[d][3][i]).

In 1987, the owners of the Washington Square North property, petitioners
Andrew Duell and Irene Duell as executors of the estate of Manny Duell,
commenced a summary proceeding in New York City Civil Court to evict Condon
on the grounds that the Washington Square apartment was not her primary
residence. The court dismissed the petition after a hearing and held
further that Condon was entitled to an award of attorneys' fees pursuant to
Real Property Law § 234. The parties stipulated to fees in the amount
of $51,517.25 and judgment was entered accordingly.

Petitioners appealed the judgment contending that respondent, a statutory
tenant who was never a party to the executed lease, was not entitled to
fees under the Real Property Law. The Appellate Term, First Department
affirmed, as did the Appellate Division following an appeal to that court.
The Appellate Division granted leave to appeal to this Court and certified
the following question: "Was the order of the Appellate Term of the State
of New York, as affirmed by this Court, properly made?"

II

Real Property Law § 234 provides:

     Whenever a lease of residential property shall provide that in
     any action or summary proceeding the landlord may recover
     attorneys' fees and/or expenses incurred as the result of the
     failure of the tenant to perform any covenant or agreement
     contained in such lease ... there shall be implied in such lease
     a covenant by the landlord to pay the tenant the reasonable
     attorneys' fees and/or expenses incurred by the tenant as the
     result of the failure of the landlord to perform any covenant or
     agreement on its part to be performed under the lease or in the
     successful defense of any action or summary proceeding commenced
     by the landlord against the tenant arising out of the lease[n 1]

The 1960 lease executed by Edwin and Phyllis Condon contained a provision
entitling the landlord to assess attorneys' fees and expenses against the
tenant. Petitioners contend, however, that respondent may not recover fees
and expenses because (1) the provisions of the lease do not carry forward
into the statutory tenancy of a tenant who was not a signatory to the
lease; (2) the nonprimary residence litigation was not a proceeding
"arising out of the lease"; and, even if those questions be answered
affirmatively, (3) the provisions of Real Property Law § 234 may not
be applied retroactively to a lease that was executed prior to the
statutory enactment.

Preliminarily, because the parties rely on both rent control and rent
stabilization decisions, it should be noted that those two schemes were
enacted to address different problems and they endow landlords and tenants
with distinct rights and obligations (see, Braschi v Stahl, 74 NY2d 201,
210; Sullivan v Brevard Assoc., 66 NY2d 489, 492-494; see generally,
Administrative Code of City of New York § 26-408 and 9 NYCRR part 2204
[rent control]; Administrative Code § 26-511[b] and 9 NYCRR part 2524
[rent stabilization]). The two schemes, which permit evictions only under
specific circumstances, define the residential landlord/tenant relationship
in fundamentally different ways. A tenant in rent controlled premises has a
right to continued occupancy, assuming the tenant has complied with the
rent control laws, notwithstanding the expiration of the lease (NY City
Admin Code § 26-408[1]; 9 NYCRR 2204.1). The tenancy exists not by
contract but by operation of law -- it is a "statutory tenancy." In
contrast, assuming the right to continued occupancy, the nature of the rent
stabilized landlord/tenant relationship continues to be contractual in
nature because the landlord of a rent stabilized apartment must offer the
tenant a renewal lease at the expiration of a term (NY City Admin Code
§ 26-511[c][4], [9]; 9 NYCRR 2524.1). It is the absence of a current
lease in the rent controlled statutory tenancy that gives rise to this
dispute over the applicability of Real Property Law § 234.

Addressing petitioners' contentions, we hold first that the attorneys' fee
clause contained in the lease executed in 1960 carried forward into the
statutory tenancy of Edwin and Phyllis Condon. The New York City Rent and
Eviction Regulations say so: "[t]he provisions of any lease or other rental
agreement shall remain in force pursuant to the terms thereof, except
insofar as those provisions are inconsistent with the Rent Law or these
regulations" (9 NYCRR 2220.13; see also, former New York City Rent and
Eviction Regulations, § 15). Various courts have applied that
provision to hold that when a lease expires and is followed by a statutory
tenancy, the terms and conditions of the expired lease -- other than the
duration of the lease and the amount of rent, but including clauses
providing for payment of litigation expenses -- continue into the statutory
tenancy (see, Barrow Realty Corp. v Village Brewery Restaurant, Inc., 272
AD 262; see also, 207-17 West 25th St. Co., Inc., v Blu-Strike Safety Razor
Blade Co., Inc., 302 NY 624, 626, rev'g 277 AD 93; Matter of Park East Land
Co. v Finkelstein, 299 NY 70, 74; 74 NY Jur 2d, Landlord and Tenant, §
129, fn 11).

Petitioners contend, however, that the term "tenant" as used within Real
Property Law § 234 applies only to signatories and thus even if Edwin
and Phyllis Condon were entitled to the benefit of the statute, Liza Condon
is not because she did not sign the lease. This is so, they say, because
the statutory benefit is grounded on the provisions of the "lease" and in
their view, the term "tenant" is understood to mean a signatory to a lease.
They also rely on judicial authority which they assert denies the benefit
of Real Property Law § 234 to non-signatories.

When interpreting a statute, the words used by the Legislature are to be
given their usual and commonly understood meaning unless the statute
plainly indicates that a different meaning was intended (see, Matter of
SIN, Inc. v Department of Fin. of City of N.Y., 71 NY2d 616, 620-621; Price
v Price, 69 NY2d 8, 15-16). The word "tenant" is commonly understood to
mean one who rightfully occupies and/or uses the premises of another (see;
The Oxford English Dictionary, Vol XVII, at 764 [2d ed 1989]; Black's Law
Dictionary 1314 [5th ed 1979]). To the extent that the Legislature's
concurrent usage of the terms "tenant" and "lease" creates an ambiguity as
to the meaning of "tenant," the statute must be construed to further the
legislative intent and purpose (see, Nestor v McDowell, 81 NY2d 410, 414;
Price v Price, supra, 69 NY2d at 16; Ferres v City of New Rochelle, 68 NY2d
446, 451).

The overriding purpose of Real Property Law § 234 was to level the
playing field between landlords and residential tenants, creating a mutual
obligation that provides an incentive to resolve disputes quickly and
without undue expense. The statute thus grants to the tenant the same
benefit the lease imposes in favor of the landlord. An additional purpose,
particularly relevant in cases in which the tenancy is governed by the
emergency rent laws, is to discourage landlords from engaging in frivolous
litigation in an effort to harass tenants, particularly tenants without the
resources to resist legal action, into terminating legal occupancy (see,
Bill Jacket, L 1966, ch 286, at 1, Memorandum of Senate Sponsor Harrison
Goldin, id., at 5; Memorandum of NYS Dept of Social Welfare]; see also,
Maplewood Management v Best, 143 AD2d 978; Cier Indus. Co. v Hessen, 136
AD2d 145, 150-151).

It would defeat the purpose of Real Property Law § 234 if "tenant"
were construed to mean only signatories to the lease. A clause in the lease
obligating a tenant to pay attorneys' fees and/or expenses to the landlord
continues into the statutory tenancy and binds a host of others who have
not signed the lease (see, 9 NYCRR 2204.6[d][3][i] [those succeeding to a
statutory tenancy may include parents and offspring, in-laws and step-
relatives, aunts and uncles, nieces and nephews, and other interdependent
persons who have lived for two years with the statutory tenant]). If
statutory tenants are bound to pay the landlord's fees and expenses -- and
they are (see, Greenberg v Coronet Props. Co., 167 AD2d 291; College
Properties, Inc. v Bruce, 122 Misc 2d 766, affd 104 AD2d 1063) -- then to
effectuate the legislative purpose the term "tenant" used within the
statute must be read to include all statutory tenants, whether or not they
signed the lease.

Indeed, this case is a perfect example of why the statute should be read to
include non-signatories to the lease. Liza Condon is a statutory tenant and
pays a rent that has been controlled for three decades. Thus the landlords
had an obvious incentive to terminate her tenancy. Though they lacked
substantial evidence that she lived elsewhere, they commenced the eviction
proceedings against Condon based upon the claim that the Washington Square
apartment was not her permanent residence. The defense of the legal
proceeding, as they concede, cost respondent in excess of $51,000. Had
petitioners prevailed on the merits, they would have been entitled to
reimbursement from Condon for their legal expenses. It would seem, then,
that these are precisely the circumstances the Legislature envisioned when
they considered section 234 and authorized the courts to award fees and
expenses to those in Condon's position.

Petitioners also rely on several Miscellaneous decisions refusing to apply
Real Property Law § 234 for the benefit of successful litigants who
were not signatories to leases (see, East Forty-Four Assocs. v Ewell, 138
Misc 2d 235; 317 West 77th Street v Pera, NYLJ, April 3, 1990, at 26, col
1; Beth Israel Medical Center v Powers, NYLJ, Nov. 8, 1990, at 23, col 2).
Those decisions are not persuasive, for two reasons. First, as several
courts have recognized, the applicability of Real Property Law § 234
is not limited to the signatories to the lease but turns on the existence
of a cognizable legal relationship between the parties (see, Greenberg v
Coronet Props. Inc., 167 AD2d 291, supra [a successor statutory tenant];
Feierstein v Moser, supra, 124 Misc 2d 369 [a successor landlord as against
a statutory tenant]; Mapama Corp. v Nadelson, 129 Misc 2d 816 [the assignee
of a statutory tenant]; Kalb v River Point Towers Coop., 77 AD2d 541 [the
administrator of the estate of a deceased tenant]). When a statutory
tenancy exists, the landlord/tenant relationship continues by operation of
law.

Second, the decisions cited by petitioners all involved disputes over rent
stabilized premises. Within the New York City rent stabilization scheme,
the term "tenant" is narrowly defined to include only a "person or persons
named on a lease as lessee or lessees, or who is or are a party or parties
to a rental agreement" (9 NYCRR 2520.6[d]). Implicitly, the decisions in
the rent stabilization cases hold that since the party seeking attorneys'
fees was not a tenant within the meaning of the Rent Stabilization Code,
that party was not a tenant within the meaning of Real Property Law §
234. Although we do not pass on the correctness of those decisions, we note
that they are distinguishable from the instant case, because the rent
control law broadly defines a "tenant" as any person who is entitled to
possession, use or occupancy of the premises (NYC Admin Code §
26-403[m]).

Petitioners contend next that Real Property Law § 234 does not apply
in this case because the eviction proceeding was based on a claim that the
Washington Square property was not respondent's primary residence and the
lease does not contain a clause requiring the tenant to maintain the
apartment as her primary residence. Thus, they maintain the litigation does
not "arise out of" the lease within the meaning of Real Property Law §
234.

The 1960 lease contained an express covenant by the tenant to quit and
surrender the premises "[u]pon the expiration or other termination of the
term of this lease." Because this covenant to surrender the premises is not
inconsistent with the rent control law or regulations, it is among those
lease provisions that carried forward into the statutory tenancy (see, 9
NYCRR 2220.13). Upon the termination of the statutory tenancy, the tenant
remains under the obligation to quit and surrender possession of the
premises.

The New York City Rent Control Law does not apply to the housing
accommodation unless it is occupied by the tenant as a primary residence
(NY City Administrative Code § 26-403[e][10]; New York City Rent and
Eviction Regulations, 9 NYCRR 2200.2[f][18]). When a tenant ceases to
occupy the premises as a primary residence, the term of the statutory
tenancy expires and the tenant is obligated by the covenant in the lease to
quit and surrender the premises. Here, it was the tenant's alleged breach
of a covenant to quit the premises that caused the landlord to commence the
nonprimary residence proceeding to recover the premises. Accordingly, the
landlord's litigation arose out of the lease within the meaning of Real
Property Law § 234 (cf., Cier Indus. Co. v Hessen, supra, 149; see
also, Troy v Oberlander, 146 AD2d 460).

Finally, petitioners contend that even if Real Property Law § 234
applies to non-signatories, and nonprimary residence litigation is found to
arise out of the lease, Real Property Law § 234 should not be applied
retroactively to this lease because it was executed before the statute was
enacted.

Whether a statute is to be applied prospectively or retroactively generally
requires determination of legislative intent (see, Longines-Wittnauer Watch
Co. v Barnes & Reinecke, 15 NY2d 443, 453; McKinney's Consolidated Laws of
NY, Book 1, Statutes, supra, § 51[b]; [d]). When a statute creates a
new right of action, it is presumed that the Legislature intended the
statute to be applied prospectively only unless a contrary intent clearly
appears (see, Jacobus v Colgate, 217 NY 235, 240-242). On the other hand,
statutes that are remedial in nature may be applied retrospectively (see,
Becker v Huss Co., 43 NY2d 527, 540). Though these maxims of statutory
construction provide helpful guideposts, the reach of the statute
ultimately becomes a matter of judgment made upon review of the legislative
goal (see, Becker v Huss Co., supra, 43 NY2d at 540-541).

Petitioners contend that because there was no opportunity to renegotiate
the terms and conditions of the expired lease before the attorneys' fee
provision was carried forward into the statutory tenancy, Real Property Law
§ 234 unfairly imposes an unnegotiated obligation on the landlord of
rent controlled premises which could remain in effect for years before the
statutory tenancy terminates. We conclude, however, that the imposition of
a mutual obligation into pre-existing leases is exactly what the
Legislature sought to accomplish by the statute.

The remedial nature of the Legislature's action to equalize the power of
landlords and tenants is evident from both the language of the statute as
well as historical documents (see, Bill Jacket, L 1966, ch 286, supra).
Real Property Law § 234 contains no limitation, stating that its terms
apply "[w]henever a lease of residential property" includes an attorneys'
fees and expenses clause in favor of the landlord (emphasis supplied).
Moreover, the memorandum of the sponsor of the bill states that the
proposed statute would provide that "any lease giving such a right [to
recover fees and expenses] to the landlord shall be construed to give a
similar right to the tenant". It was intended, he said, that "by giving
tenants the potential right to recover such legal expenses, the bill would
act as a deterrent to overreaching practices by landlords who now rely upon
their tenants' inability to bear the cost of legal proceedings required to
redress [the] landlord's improper acts" (Bill Jacket, supra, at 1,
Memorandum of Senator Harrison Goldin [emphasis supplied]). Moreover, the
apparent legislative intent to apply the statute retroactively was
recognized by those commenting on the proposed legislation; indeed they
objected to the bill because it was retroactive (see, Bill Jacket, supra,
at 18, Memorandum of the Commerce and Industry Association of New York).

Finally, we note that the statute, as originally enacted in 1966, applied
only to New York City. At that time rent control had been in existence
there for four years and doubtless many New York City leaseholds had become
statutory tenancies during that period, as had the Condons'. The statute
was enacted to correct an existing problem and there is no evidence that
the Legislature intended statutory tenancies created between 1962-1966 to
be exempt from its provisions. Because countless statutory tenants remained
obligated under the pre-existing attorneys' fees provision in favor of the
landlord and because the rent control scheme provides the landlord with an
ever-increasing incentive to evict the statutory tenants, the remedial
purpose of the statute would be ignored if the statute were applied only
prospectively.

In sum, we hold that Real Property Law § 234 applies to a statutory
tenant under the rent control law even if not a signatory to the lease,
that the nonprimary residence proceeding arose out of the lease within the
meaning of Real Property Law § 234, and that the statute applies
retroactively to leases executed prior to the effective date of the
statute.

Accordingly, the order of the Appellate Division should be affirmed, with
costs, and the certified question answered in the affirmative.[n 2]

F O O T N O T E S

1. As originally enacted, the statute applied only to residential
properties in New York City. It was subsequently amended and now applies
state-wide (see, L 1969, ch 297).[return to text]

2. In the order of the Appellate Division entered January 27, 1994
affirming Appellate Term, the matter was remanded to New York City Civil
Court for the purpose of establishing the reasonable amount of attorneys'
fees and disbursements incurred by respondent in defending the appeal to
the Appellate Division. Our disposition is without prejudice to respondent
seeking attorneys' fees and disbursements incurred in defense of the appeal
to this Court on the remand to the Civil Court.[return to text]

* * * * * * * * * * * * * * * * *

Order affirmed, with costs, and certified question answered in the
affirmative. Opinion by Judge Simons. Chief Judge Kaye and Judges Titone,
Bellacosa, Smith, Levine and Ciparick concur.
_________________________________________________________________________


Jacqueline S. v. City of New York, 81 N.Y.2d 288, 614 N.E.2d 723, 5...

JACQUELINE S., &C., ET AL., APPELLANTS, v. THE CITY OF NEW YORK,
DEFENDANT,
AND THE NEW YORK CITY HOUSING AUTHORITY, RESPONDENT. / ROBERT
MORGENTHAU,
NON-PARTY RESPONDENT.

81 N.Y.2d 288, 614 N.E.2d 723, 598 N.Y.S.2d 160 (1993).
May 6, 1993

1 No. 97 [1993 N.Y. Int. 103]
Decided May 6, 1993
---------------------------------------------------------------------------
This opinion is uncorrected and subject to revision before publication in
the New York Reports.

Norman E. Frowley, for Appellants.
Anthony J. Mercorella, for Respondent.
---------------------------------------------------------------------------
HANCOCK, J.:
_________________________________________________________________________

HANCOCK, J.:

The plaintiff was a resident of one of several apartment buildings in a
housing complex when she was abducted and raped by an assailant inside her
building. In opposing defendant's motion for summary judgment, plaintiff
produced evidence of violent criminal activity in the housing complex and
of dangerous conditions in the building where she resided. The Appellate
Division granted defendant summary judgment, however, holding that
plaintiff's allegations contained insufficient "experiential evidence" of
criminal activity to raise a triable issue as to foreseeability of crime in
her own building. We conclude that the evidence adduced by plaintiff was
sufficient to raise a triable issue of foreseeability so as to require
denial of summary judgment. There should, therefore, be a reversal. I.

In September 1988, plaintiff, a 14-year-old resident of the Wagner Houses
public housing project in upper Manhattan, was abducted in the lobby of her
apartment building, taken to a utility room on the roof of the building and
raped. In her deposition testimony, Housing Authority police officer Juliet
Jackson stated that she had responded to several reports of forcible rape
in the Wagner Houses, which "usually occur on the roof or roof landing" of
the buildings, and to "20 or more" forcible robberies. Jackson could not
recall in which buildings the crimes occurred, but did not exclude
plaintiff's. In addition, Nelson Santoni, the assistant superintendent of
the Wagner Houses testified that empty crack vials, needles, syringes and
drug paraphernalia were found "throughout the entire development, roof
landing, stairways, lobbies, corridors, basement, grounds, [and] outside
ground areas". During the period he was at the Wagner Houses, he found
"numerous drug addicts on the roof * * * [and that] they would either sleep
on the roof landing, sleep on the stairway, [or] in the corridors. You find
them all over the place." Intruders, according to Santoni, could be found
"all over the place". Officer Jackson stated that when she found people on
the roof, "[t]hey're usually doing drugs". Indeed, Jackson testified that
she always approached the door to a roof with her gun drawn because "[y]ou
don't know what is on the other side of the door".

Despite these conditions, as well as numerous complaints from tenants,
neither the door to the lobby nor the door to the utility room on the roof
was locked and no security personnel were stationed in the building. Carl
Schwartz, the housing assistant of the Wagner Houses stated that "as long
as I have been in Wagner Houses, which is approximately a year, none of
[the entrance doors] had locks". Officer Jackson said that it was known
that the utility room on the roof of plaintiff's building had a mattress in
it and that she had never seen a lock on the door to the room. When asked
why these doors were kept open and were not locked, Jackson responded, "You
have to ask management that".

A referendum vote had been held in 1988 pursuant to Multiple Dwelling Law
(MDL) § 50-a(3) regarding installation of self-closing, self-locking
doors and an intercommunication system, but a majority of the tenants of
the 22-building complex rejected the plan. No evidence was submitted,
however, as to whether a majority of the tenants in plaintiff's building
had rejected the proposed security measures.

Plaintiff commenced the present action alleging breach of a common law duty
to provide adequate security.[n 1] Supreme Court denied defendant's motion
and plaintiff's cross-motion for summary judgment. On defendant's appeal,
the Appellate Division reversed, holding that defendant had fully complied
with its statutory obligations under the MDL and that plaintiff had failed
to establish a common law duty to provide greater security because there
was no showing of a specific instance of crime occurring in plaintiff's
building. The court stated:

     A landlord does have a common law duty to provide security to its
     tenants. However, that duty rests on the foreseeability of the
     particular danger which proximately causes the harm. A Housing
     Authority police officer did testify as to her responding to
     calls on forcible rapes and robberies at the Wagner Houses prior
     to this occasion, but could recall no specific instance at this
     particular apartment building. The Housing Authority is not an
     insurer of plaintiff's safety. Without experiential evidence
     indicating the reasonable foreseeability of such a danger, a
     landlord's duty, under common law standards, will require only
     "'minimal'" safety precautions (182 AD2d 514, 515 [emphasis
     added]).

Since, according to the Appellate Division, defendant was relieved of any
statutory obligation by the tenants' vote, that court reversed and granted
summary judgment dismissing the complaint.

II.

We discuss first defendant's contention that the requirements of the MDL
supplant the common law duty to provide adequate security and constitute
the exclusive basis for liability. MDL § 50-a(3) mandates installation
of self-closing, self-locking doors and an intercommunication system in
buildings constructed before 1968 upon the request or consent of the
tenants "occupying a majority of all apartments within the structure
comprising the multiple dwelling affected" (emphasis added).[n 2] If a
majority of tenants of the particular building reject the installation of
such devices, then no installation is mandated by the statute. Contrary to
defendant's claim, however, nothing in section 50-a(3) suggests that its
terms supersede common law duties and obligations such that a negative vote
of the tenants relieves a landlord from any obligation to install security
devices. Irrespective of the absence of a statutory obligation, the
landlord remains subject to the common law duty to take minimal precautions
to protect tenants from foreseeable harm. A negative vote of the tenants in
a particular building has no effect other than absolving the owner of the
mandatory duty that MDL § 53- a(3) might otherwise impose.[n 3]

Turning to defendant's common law duty, we reject the argument that
plaintiff's allegations are insufficient to raise a triable issue as to the
foreseeability of the violent assault on plaintiff merely because the
housing police could not recall whether the violent criminal activity known
to have occurred in the Wagner Houses took place inside the specific Wagner
House structure where plaintiff resided. We have never adopted the
restrictive rule urged by defendant and apparently embraced by the
Appellate Division: that to establish the foreseeable danger from criminal
activity necessary for liability, the operative proof must be limited to
crimes actually occurring in the specific building where the attack took
place (see, Miller v State of New York, 62 NY2d 506; Nallan v
Helmsley-Spear, 50 NY2d 518; see generally, Prosser and Keeton, Torts,
§ 63, at 442-443; Anno, Landlord's Obligation To Protect Tenant
Against Criminal Activities Of Third Persons, 43 ALR3d 331). In Nallan v
Helmsley- Spear, which recognized the duty of landlords to take steps to
minimize foreseeable danger from criminal acts, we cast foreseeability more
generally -- i.e., in terms of "past experience 'that there is a likelihood
of conduct on the part of third persons * * * which is likely to endanger
the safety of a visitor'" (id. at 519 [citation omitted]).

There is no requirement in Nallan or Miller that the past experience relied
on to establish foreseeability be of criminal activity at the exact
location where plaintiff was harmed or that it be of the same type of
criminal conduct to which plaintiff was subjected. Indeed, in Miller, the
occurrence of criminal activity in plaintiff's college dormitory was held
to be foreseeable, in part, because of different criminal conduct occurring
in other dormitories on the same campus (see, Miller, supra, at 506).
Whether knowledge of criminal activities occurring at various points within
a unified public housing complex, such as Wagner Houses, can be sufficient
to make injury to a person in one of the buildings foreseeable, must depend
on the location, nature and extent of those previous criminal activities
and their similarity, proximity or other relationship to the the crime in
question (see, e.g., Keenan v Dayton Beach Park No. 1 Corp., 175 AD2d 862;
see also, Trentacost v Brussel, 412 A2d 436 [NJ]; Czerwinski v Sunrise
Point Condominium, 540 So2d 199 [Fla App]; Patterson v Deeb, 472 So2d 1210
[Fla App]; Bayshore Co. v Pruitt, 334 SE2d 213 [Ga App]).

We conclude that enough has been shown to raise a triable issue as to
foreseeability. Plaintiff's submissions showed, among other things, that
there was evidence of drug-related criminal activity in her building and
that vagrants and drug addicts readily gained access to and loitered in the
corridors, stairwells and on the roof of plaintiff's building. The Housing
Authority police, it appeared, had responded to numerous reports of
forcible rapes and robberies in the Wagner Houses and Officer Jackson could
not recall whether some of these violent crimes had occurred in plaintiff's
building. The Housing Authority was aware that neither the doors to the
lobbies of the buildings nor the doors to the utility rooms on the roofs
were equipped with locks.

Contrary to the assertions of the dissent, our decision does not impose "a
burden of practical and functional impossibility" (see, dissenting opn, at
1). Nor does it extend the rule of Nallan and Miller (see, id. at 3). We
hold merely that, in the circumstances, given the Authority's conceded
failure to supply even the most rudimentary security -- e.g., locks for the
entrances -- it was error to grant summary judgment on the question of
foreseeability of danger from a violent crime (see, Phillips v Kantor &
Co., 31 NY2d 307, 311 [summary judgment should be denied if there is a
doubt as to whether there is a material, triable issue of fact]).

Accordingly, the order of the Appellate Division should be reversed, with
costs, and defendant New York City Housing Authority's motion for summary
judgment denied.

F O O T N O T E S

1. Although originally commenced against both the City of New York and the
Housing Authority, action against the City was discontinued.[return to
text]

2. In pertinent part, section 50-a(3) requires that every multiple
dwelling:

     shall be equipped with automatic self-closing and self-locking
     doors, which doors shall be kept locked except when an attendant
     shall actually be on duty, and with the intercommunication system
     described in paragraph two of this section, provided that tenants
     occupying a majority of all apartments within the structure
     comprising the multiple dwelling affected request or consent in
     writing to the installation of such doors and intercommunication
     system * * * The terms under which such costs may be recovered
     shall be the same as those prescribed by the local city housing
     rent agency * * * Such costs shall not be deemed to be "rent" as
     that term is limited or defined in the contract.[return to text]

3. Contrary to the Appellate Division's conclusion, the record in this case
does not substantiate defendant's contention that a vote of the tenants in
plaintiff's building did not trigger the obligation under MDL §
53-a(3). In its motion for summary judgment, the Housing Authority
submitted a conclusory affidavit stating merely that the "tenants [of the
Wagner Houses] rejected the installation of the aforementioned system by a
majority vote". The Housing Authority provided neither a tally of the votes
nor the results pertaining specifically to plaintiff's building. Without
evidence that a majority of the tenants in the particular structure where
plaintiff resided had rejected the security measures, it cannot be
established that the referendum did not impose a statutory duty to install
security devices.[return to text]

----------------------------------------------------------------------

BELLACOSA, J. (dissenting):

I respectfully dissent and vote to affirm the Appellate Division order
dismissing plaintiff's case. The ultimate effect of the Court's ruling will
be to render the defendant, New York City Housing Authority, an unlimited
insurer of the safety of its premises against urban crime. The legal,
fiscal and policy consequences of such a rule, which imposes a sweeping
negligence liability burden of impossible practical and functional
dimensions, are unwarranted.

A landlord is generally not responsible for guaranteeing the safety of
tenants against the criminal acts of third parties. However, where a
private, commercial landlord has sufficient notice of relevant criminal
activities bearing temporally and proximately on injuries to a plaintiff,
this Court has recognized a narrow duty based on a traditional
foreseeability nexus. The duty requires the landowner to take reasonable
precautionary measures to protect against or minimize the foreseeable risk,
or suffer exposure to a jury resolution for its negligence (Nallan v
Helmsley-Spear, Inc., 50 NY2d 507, 520).

However, this Court has demarcated the limits of this duty by requiring
that the record must establish that an owner "knows or has reason to know
from past experience 'that there is a likelihood of conduct on the part of
third persons * * * which is likely to endanger the safety of [a tenant or]
visitor" (id., at 519). Questions necessarily evolve as to what quantum and
particularity of related past criminal activities must be advanced to
entitle an injured party to a jury consideration of this otherwise
expansive and largely uncontrollable absorption of liability for the
actions of third parties. For example, must not the foreseeable wrongdoing
be shown to be at least of a similar kind of criminal activity to that for
which damages are sought? How frequently must the similar criminal activity
have occurred and at what proximate range of location and time?

This case dramatically widens the dimensions of the applicable rule in
virtually every component of the formerly limiting details. For practical
purposes, the new rule eliminates the boundaries that courts precedentially
promulgated in their efforts to impose reasonable and appropriate limits.
Under this case, there are no real qualifying components left to the wide-
ranging duty. Indeed, the Court fails to provide a discernible test or set
of criteria in this regard to guide the lower courts for the trial of this
case or future cases (see, Majority opn, at 8). They will be at a loss, as
I am, to predict the instruction that should be given the jurors for their
definitive and reasonable guidance.

Up to now, the Appellate Division had at least started to develop a
sensible and workable formulation. Drawing on its efforts, the rule we
might have adopted to govern this case is that a landlord's duty to take
reasonable precautionary measures against a risk of particularly
foreseeable criminal conduct arises if there is temporally relevant,
experiential evidence pointing to the likelihood of similar criminality in
or at proximate locations to the premises at issue (see, Jacqueline S. v
City of New York, 182 AD2d 514, 515; Iannelli v Powers, 114 AD2d 157, 162;
Sherman v Concourse Realty Corp. 47 AD2d 134, 136). Such a rule would be
fair and would help to pinpoint some boundaries on an otherwise virtually
limitless landlord's duty set against overwhelming socials ills and
criminal activities in the urban universe.

It should not be overlooked that in swinging this kind of liability door
wide open in this case, the Court is doing so for the first time against a
public municipal landlord charged with maintaining numerous multibuilding
public housing projects such as this one, which extends over a 27-acre site
in Manhattan. In that context, the Appellate Division's balanced test seems
more faithful to the limited rationale of Nallan v Helmsley-Spear, Inc. (50
NY2d 507, supra), the case which inaugurated this kind of liability in New
York against commercial owners. The instant case moves light years away
from the limited holdings and facts of Nallan and Miller v State of New
York (62 NY2d 506).

For example, in Nallan, the plaintiff was shot by an unknown assailant as
he was signing a guest registry in the unattended lobby of the defendant's
office building, where there had been 107 reported crimes in the 21-month
period immediately proceeding the shooting. On that record, this Court
carefully circumscribed that "a rational jury could have found from the
history of criminal activity in the other parts of the building that a
criminal incident in the lobby was a significant, foreseeable possibility"
(Nallan, supra, at 520 [emphasis added]). In diametric contrast, the record
in this summary judgment case is barren of any documentation of relevant or
similar violent criminal activity in or near the particular public housing
building where the crime occurred. We do not know when or where any of the
few alleged prior incidents occurred. The testimony of Housing Authority
police officer Juliet Jackson indicates that in her nine years as an
officer at the Wagner Houses, she had responded on five occasions to
reports of rape and on twenty occasions to reports of robbery. However, she
did not state in which buildings of the vast 22-building Wagner Houses
project these crimes had occurred or when they occurred in relation to the
criminal act at issue here. She had no recollection of any criminal
activity in the particular building at issue. Other than the supposition
that rapes "usually occur on the roof or roof landing," the officer gave no
evidence concerning the manner in which the previous crimes were
perpetrated, a factor that should be of critical threshold weight in
determining whether a duty rooted in foreseeability ought to be imposed
here. There is no other evidence of violent crime offered by plaintiff to
satisfy the limiting components of the Nallan rule, and I believe on this
record and as a matter of policy we should uphold the grant of summary
judgment dismissing plaintiff's case.

Miller v State of New York (62 NY2d 506, supra) is also instructive. The
plaintiff satisfied the required threshold showing by offering evidence
that with respect to her own dormitory, there had been previous reports to
campus security of men being present in the women's bathroom. Claimant
herself had complained twice to the Assistant Quad Manager of her dormitory
area about nonresidents loitering in the dormitory lounges and hallways
when they were not accompanied by resident students (Miller, id., at 509).
Furthermore, in Miller, all of the dormitory doors were equipped with locks
which the State, as a matter of policy, did not lock. As this court noted,
"the act complained of under the landlord theory of liability was the
failure to lock the outer doors of the dormitory" (id., at 513), and the
duty which was breached was the "duty to take the rather minimal security
measure of keeping the dormitory doors locked" (id., at 514). Here, in
contrast, self- locking entrance doors had never been installed on
plaintiff's building or in any of 22 buildings of the sprawling Wagner
Houses Project.

Everyone shares the hope and desire that all feasible measures be taken to
prevent the type of heinous crime against an innocent youngster that
underlies this action. However, creating a cascade of public liability of
the type imposed here under these circumstances is particularly ill-suited
and ill-fated to redressing endemic urban ills and crimes. This ancient
tort theory and common law method of spreading risk and deterring negligent
conduct does not work here. It is more likely in these circumstances
instead to divert limited public funds, that might be invested in some
safety measures and better public housing, into the payment of escalating
tort settlements and judgments against "deep pocket" public landlords. This
consequence will flow merely because they were impotent against the tide of
criminal activity occurring just about anywhere in their vast premises and
anywhere in or near vaster still New York City.

* * * * * * * * * * * * * * * * *

Order reversed, with costs, and defendant New York City Housing Authority's
motion for summary judgment denied. Opinion by Judge Hancock. Chief Judge
Kaye and Judges Simons, Titone and Smith concur. Judge Bellacosa dissents
and votes to affirm in an opinion.

_________________________________________________________________________


Liberman v. Gelstein, 80 N.Y.2d 429, 605 N.E.2d 344, 590 N.Y.S.2d 8...

BARNET L. LIBERMAN, APPELLANT, v. LEONARD GELSTEIN, RESPONDENT.

80 N.Y.2d 429, 605 N.E.2d 344, 590 N.Y.S.2d 857 (1992).
November 24, 1992

1 No. 265
Decided November 24, 1992
---------------------------------------------------------------------------
This opinion is uncorrected and subject to revision before publication in
the New York Reports.

Robert A. Cohen, for Appellant.
Peter Pearson Traub, Jr., for Respondent.

KAYE, J.:

In this action for slander, we consider whether the plaintiff has stated a
viable claim without any showing of special damages, whether the alleged
slander is protected by qualified privilege, and whether there is a triable
issue of fact as to malice. We conclude that plaintiff's claims were
correctly dismissed on summary judgment.

I.

Before us is one of eight actions, consolidated for disposition by the
motion court, centering on a luxury apartment building in Manhattan.
Plaintiff, Barnet L. Liberman, is the building's landlord. Defendant,
Leonard Gelstein (a tenant), is on the Board of Governors of the tenants'
association. Disputes between the landlord and tenants of the building
erupted nearly a decade ago, when the tenants organized opposition to the
landlord's application for a rent increase, and they have continued and
proliferated through the conversion of the building to cooperative
ownership (see, e.g., Matter of 421 Hudson St. Tenants Association v Abrams, 140 Misc 2d
166).

This defamation action against Gelstein is one of three suits brought by
Liberman against individual members of the tenant association's Board of
Governors. Gelstein has countersued Liberman and his wife for misconduct
arising from a criminal complaint filed by Mrs. Liberman, which apparently
resulted in Gelstein's overnight incarceration.

The present complaint alleged five causes of action sounding in slander.
Only two--the second and fifth--are pressed by plaintiff on this appeal.
The other causes of action involving, for example, accusations by Gelstein
that Liberman charged an illegal $10 monthly dog rent and stole electricity
from the building, have over the years been dropped.

In his second cause of action, plaintiff alleged that in July 1986, the
following conversation took place between defendant and another tenant of
the building, Robert Kohler.

     Gelstein:

          Can you find out from your friend at the precinct which
          cop is on the take from Liberman?

     Kohler:

          What are you talking about?

     Gelstein:

          There is a cop on the take from Liberman. That's why
          none of the building's cars ever get tickets--they can
          park anywhere because Liberman's paid them off. He
          gives them a hundred or two hundred a week.

The fifth cause of action alleged that in May 1986 defendant made the
following statement in the presence of employees of the building:

     Liberman threw a punch at me. He screamed at my wife and
     daughter. He called my daughter a slut and threatened to kill me
     and my family.

Plaintiff claimed $5 million damages on each cause of action for injury to
his reputation and emotional distress. After discovery, defendant sought
summary judgment dismissing the complaint. On the second cause of action,
defendant invoked the "common interest" qualified privilege, characterizing
his conversation with Kohler, a colleague on the Board of Governors, as an
inquiry designed to uncover wrongdoing by the landlord affecting tenants.
At his deposition, defendant testified that several vehicles operated by
the building's management regularly parked in front of the building beyond
the legal limit but never received parking summonses. He further testified
that he was told by two building employees, whom he identified, that
Liberman was bribing the police to avoid parking tickets. Plaintiff
admitted that he did not know whether the allegations were true, but
testified that they "sounded truthful" to him. Accordingly, defendant
testified that he approached Kohler--whose friend was captain of the local
police precinct--in an effort to discover whether the allegations were
true.

Plaintiff responded that there was an issue of fact on malice, which if
proved at trial, would defeat the qualified privilege. Plaintiff argued
that malice of the common law variety (spite or ill will) could be inferred
from defendant's overall conduct toward plaintiff, including one occasion
in July 1987 when defendant threw a lit firecracker into his car and
another in May 1986 when he pounded on the car's windows and attempted to
rip out the windshield wiper. Moreover, plaintiff argued, malice of the
constitutional variety (knowledge of falsity or reckless disregard for
truth or falsity) could be found in defendant's concession that he had no
actual knowledge of bribery and the lack of trustworthiness of his sources,
"disgruntled" building employees.

On the fifth cause of action, defendant argued that the statements were
either true, not defamatory or never made.

In dismissing the second cause of action, Supreme Court agreed with
defendant that the statements were qualifiedly privileged and plaintiff
failed to sustain his burden of raising a triable issue on malice. The
court also held that the statements comprising the fifth cause of action
could only have been understood by the recipients, who were familiar with
the parties' history of disagreements, as rhetorical hyperbole.

The Appellate Division affirmed, agreeing with Supreme Court's reasoning.
One Justice, who would have reinstated the second cause of action,
dissented in part. He was not "entirely persuaded" that the statements were
qualifiedly privileged, and thought that in any event defendant's
deposition testimony that he did not know whether the bribery charge was
true was itself sufficient to raise a triable issue whether the statements
were made with reckless disregard as to their truth or falsity.

The Appellate Division granted leave, and we affirm.

II.

Slander as a rule is not actionable unless the plaintiff suffers special
damage (see, Aronson v Wiersma, 65 NY2d 592, 594; Matherson v Marchello,
100 AD2d 233, 236 [Titone, J.P.]; Restatement [Second] of Torts
["Restatement"] § 575). Special damages contemplate "the loss of
something having economic or pecuniary value" (Restatement § 575,
comment b; see, Prosser and Keeton, The Law of Torts [5th ed.] ["Prosser"]
§ 112 at 794). Plaintiff has not alleged special damages, and thus his
slander claims are not sustainable unless they fall within one of the
exceptions to the rule.

The four established exceptions (collectively "slander per se") consist of
statements (i) charging plaintiff with a serious crime; (ii) that tend to
injure another in his or her trade, business or profession; (iii) that
plaintiff has a loathsome disease; or (iv) imputing unchastity to a woman
(see, Moore v Francis, 121 NY 199, 203; Privitera v Town of Phelps, 79 AD2d
1, 3 [Simons, J.]; Civil Rights Law § 77; Seelman, The Law of Libel
and Slander in the State of New York 869-907 [1964]; Restatement
§§ 570-573; Smolla, Law of Defamation § 7.05 [1992]). When
statements fall within one of these categories, the law presumes that
damages will result, and they need not be alleged or proven.[n 1]

Plaintiff claims that both sets of statements were slanderous per se
inasmuch as they charged him with criminal conduct. Not every imputation of
unlawful behavior, however, is slanderous per se. "With the extension of
criminal punishment to many minor offenses, it was obviously necessary to
make some distinction as to the character of the crime, since a charge of a
traffic violation, for example, would not exclude a person from society,
and today would do little, if any, harm to his [or her] reputation at all"
(Prosser § 112, at 789). Thus, the law distinguishes between serious
and relatively minor offenses, and only statements regarding the former are
actionable without proof of damage (see, Restatement § 571, comment g
[list of crimes actionable as per se slander includes murder, burglary,
larceny, arson, rape, kidnapping]).

We agree with plaintiff that defendant's alleged statement that "[t]here is
a cop on the take from Liberman" charges a serious crime--bribery (see,
Penal Law § 200.00; People v Tran, ___ NY2d ___). Accordingly, the
statements constituting the second cause of action are actionable without
the need to establish special harm, and absent any privilege would be
sufficient to go to a jury.

We disagree, however, with plaintiff's contention that the statement
"Liberman * * * threatened to kill me and my family" was slanderous per
se.[n 2] Plaintiff claims these words falsely attributed to him the
commission of the crime of harassment (see, Penal Law § 240.25; People
v Dorns, 88 Misc 2d 1064 [threats to kill]). Harassment is a relatively
minor offense in the New York Penal Law--not even a misdemeanor--and thus
the harm to the reputation of a person falsely accused of committing
harassment would be correspondingly insubstantial. Hence, even if we agreed
with plaintiff that the statement would not have been construed by the
listeners as rhetorical hyperbole, the cause of action must nevertheless be
dismissed because it is not slanderous per se to claim that someone
committed harassment.

Plaintiff alternatively argues that the statements in the fifth cause of
action tended to harm him in his business as a property owner, and thus are
actionable under the "trade, business or profession" exception. That
exception, however, is "limited to defamation of a kind incompatible with
the proper conduct of the business, trade profession or office itself. The
statement must be made with reference to a matter of significance and
importance for that purpose, rather than a more general reflection on the
plaintiff's character or qualities" (Prosser § 112, at 791). Thus,
"charges against a clergyman of drunkenness and other moral misconduct
affect his fitness for the performance of the duties of his profession,
although the same charges against a business man or tradesman do not so
affect him" (Restatement § 573, comment c). The statements at issue
are unrelated to plaintiff's status as a landlord, and therefore do not
fall into the "trade, business or profession" exception (see, Aronson v
Wiermsa, supra, 65 NY2d at 594).

In sum, the second cause of action is on its face sustainable without
special damages because it involves charges of serious crime, and the fifth
cause of action was correctly dismissed.

III.

We next consider whether the courts below properly concluded that
defendant's conversation with Kohler was conditionally privileged and that
plaintiff failed to raise an issue of fact on malice.

Courts have long recognized that the public interest is served by shielding
certain communications, though possibly defamatory, from litigation, rather
than risk stifling them altogether (see, Bingham v Gaynor, 203 NY 27, 31).
When compelling public policy requires that the speaker be immune from
suit, the law affords an absolute privilege, while statements fostering a
lesser public interest are only conditionally privileged (see, 600 West
115th Street Corp v Von Gutfeld, ___ NY2d ___, ___; Park Knoll Assoc. v
Schmidt, 59 NY2d 205, 208-209; Toker v Pollak, 44 NY2d 211, 218-220).

One such conditional, or qualified, privilege extends to a "communication
made by one person to another upon a subject in which both have an
interest" (Stillman v Ford, 22 NY2d 48, 53). This "common interest"
privilege (see, Restatement § 596) has been applied, for example, to
employees of an organization (see, Loughry v Lincoln Bank, 67 NY2d 369,
376), members of a faculty tenure committee (Stukuls v State of New York,
supra) and constituent physicians of a health insurance plan (Shapiro v
Health Insurance Plan, 7 NY2d 56, 60-61). The rationale for applying the
privilege in these circumstances is that so long as the privilege is not
abused, the flow of information between persons sharing a common interest
should not be impeded.

We thus agree with the motion court and Appellate Division that defendant's
conversation with Kohler was conditionally privileged (see, Restatement
§ 576, comment d ["Tenants in common * * * are included within the
rule stated in this section as being conditionally privileged to
communicate among themselves matters defamatory of others which concerns
their common interests"]). Gelstein and Kohler were members of the
governing body of an association formed to protect the tenants' interests.
If Liberman was in fact bribing the police so that his cars could occupy
spaces in front of the building, that would be inimical to those interests.
Thus, Gelstein had a qualified right to communicate his suspicions--though
defamatory of Liberman--to Kohler.

The shield provided by a qualified privilege may be dissolved if plaintiff
can demonstrate that defendant spoke with "malice" (see, Park Knoll Assoc.
v Schmidt, supra, 59 NY2d at 211). Under common law, malice meant spite or
ill-will (see, Stillman v Ford, supra, 22 NY2d at 53; Shapiro v Health Ins.
Plan, supra, 7 NY2d at 61). In New York Times v Sullivan (376 US 254),
however, the Supreme Court established an "actual malice" standard for
certain cases governed by the First Amendment: "knowledge that [the
statement] was false or * * * reckless disregard of whether it was false or
not" (376 US at 279-280). Consequently, the term "malice" has become
somewhat confused (see, Mahoney v Adirondack Publishing Co, 71 NY2d 31, 36
n.1; see also, Greenbelt Cooperative Publishing Assn v Bressler, 398 US 6,
10 [trial court erred in First Amendment case by charging jury under common
law malice standard]). Indeed, as the Supreme Court itself recently
acknowledged (Masson v New Yorker Magazine, 111 S Ct 2419, 2429-2430):

     Actual malice under the New York Times standard should not be
     confused with the concept of an evil intent or motive arising
     from spite or ill will (citation omitted). We have used the term
     actual malice as a shorthand to describe the First Amendment
     protections for speech injurious to reputation and we continue to
     do so here. But the term can confuse as well as enlighten. In
     this respect, the phrase may be an unfortunate one.

Nevertheless, malice has now assumed a dual meaning, and we have recognized
that the constitutional as well as the common-law standard will suffice to
defeat a conditional privilege (see, Loughry v Lincoln Bank, supra, 67 NY2d
at 376; O'Rorke v Carpenter, 55 NY2d 798, 799; Stillman v Ford, supra, 22
NY2d at 53; see also, Restatement §§ 600 and 603 comment a).

Under the Times malice standard, the plaintiff must demonstrate that the
"statements were made with [a] high degree of awareness of their probable
falsity" (Garrison v Louisiana, 379 US 64, 74). In other words, there "must
be sufficient evidence to permit the conclusion that the defendant in fact
entertained serious doubts as to the truth of [the] publication" (St. Amant
v Thompson, 390 US 727, 731; see also, Restatement § 600, comment b).

Applying these principles, we conclude that there is no triable malice
issue under the Times standard. Although the dissenter below suggested that
Gelstein's admission that he did not know whether the bribery charge was
true raised a triable issue on malice, there is a critical difference
between not knowing whether something is true and being highly aware that
it is probably false. Only the latter will establishes reckless disregard
in a defamation action. Moreover, as the motion court correctly observed,
plaintiff's mere characterization of Gelstein's informants as "disgruntled"
is insufficient to raise a triable issue. Although plaintiff criticizes
defendant for not producing affidavits from the informants--arguing that
"it has never been factually established that Gelstein had any source"-- it
was plaintiff's burden to raise a factual issue on malice, and he did not
seek to depose the employees either.[n 3] In sum, this record is
insufficient to raise a triable issue of fact under the Times standard of
malice.

Similarly, there is insufficient evidence of malice under the common law
definition. A jury could undoubtedly find that, at the time Gelstein
discussed his bribery suspicions with Kohler, Gelstein harbored ill will
toward Liberman. In this context, however, spite or ill will refers not to
defendant's general feelings about plaintiff, but to the speaker's
motivation for making the defamatory statements (see, Restatement §
603 and comment a; Stukuls v State of New York, supra, 42 NY2d at 281- 282;
Stillman v Ford, supra, 22 NY2d at 53). If the defendant's statements were
made to further the interest protected by the privilege, it matters not
that defendant also despised plaintiff. Thus, a triable issue is raised
only if a jury could reasonably conclude that "malice was the one and only
cause for the publication" (Stukuls v State of New York, supra, 42 NY2d at
282).

Plaintiff has not sustained that burden. Significantly, Gelstein did not
make a public announcement of his suspicions-- from which an inference
could be drawn that his motive was to defame Liberman--but relayed them to
a colleague who was in a position to investigate. As noted, the
conversation was within the common interest of Gelstein and Kohler, and
there is nothing in this record from which a reasonable jury could find
that Gelstein was not seeking to advance that common interest.

Thus, the courts below properly concluded that defendant's conversation
with Kohler was qualifiedly privileged, and plaintiff failed to raise a
fact issue on malice.[n 4]

Accordingly, the order of the Appellate Division should be affirmed, with
costs.

F O O T N O T E S

1. The presumed-damages rule has been found unconstitutional in certain
First Amendment cases (Gertz v Robert Welch, Inc., 418 US 323, 349) and
criticized for use in defamation cases generally (see, e.g., Anderson,
Reputation, Compensation, and Proof, 25 William & Mary L Rev 747 [1984];
Uniform Defamation Act [Feb 6, 1992 draft] § 9 and comment thereto).
Our disposition makes it unnecessary to consider the issue here.[return to
text]

2. On this appeal, this is the only portion of the fifth cause of action
raised by plaintiff.[return to text]

3. Plaintiff's appellate argument that he needs further discovery (see
dissent at 5, 6-7) is unavailing. Almost three years elapsed between
defendant's assertion of the common interest privilege in his verified
answer and the motion for summary judgment. Indeed, plaintiff never claimed
a need for discovery in opposition to the motion (see, CPLR
3212[f]).[return to text]

4. The dissent's contrary conclusion is puzzling in light of its
acknowledgment that the "record is presently lacking in any evidence to
support the conclusion that defendant knew that the bribery accusation was
false, that there was a high degree of probable falsity, or that he
entertained serious doubts as to its truthfulness." (Dissent at 5.)
Moreover, the purported factual issue whether the bribery "accusation was
stated as a matter of fact or part of an inquiry" (dissent at 5) goes not
to malice, but to whether there is an actionable statement in the first
instance. Insofar as the dissent concludes that the parties' "acrimonious
relationship" is sufficient to raise a triable issue under the common law
standard (dissent at 8), we have observed that the "existence of earlier
disputes between the parties is not evidence of malice" (Shapiro v Health

Liberman v Gelstein

No. 265

SMITH, J. (dissenting in part):

Because there is an issue of fact as to whether defendant's statements
accusing the plaintiff of bribery either resulted from a reckless disregard
for the truth or falsity of the statements or were motivated solely by
malice, the order of the Appellate Division should be modified by denying
so much of defendant's motion for summary judgment as sought to dismiss the
second cause of action and reinstating that cause of action. Therefore, I
dissent with respect to the second cause of action.

In this defamation action, the plaintiff-landlord and defendant-tenant, a
board member of the tenants' association, have been involved in continuous
disputes over the last ten years concerning rent increases and the
conversion of the property to cooperative ownership. Numerous civil and
criminal actions involving these parties and/or others have resulted
therefrom.

The second cause of action is based upon the following conversation between
the defendant and a fellow board member:

     Gelstein:

          Can you find out from your friend at the precinct which
          cop is on the take from Liberman?

     Kohler:

          What are you talking about?

     Gelstein:

          There is a cop on the take from Liberman. That's why
          none of the building's cars ever get tickets - they can
          park anywhere because Liberman's paid them off. He
          gives them a hundred or two hundred a week.

There is no dispute that these statements were made. However, defendant
contends that these were not statements, but rather his effort on behalf of
the tenants' association to investigate what he had supposedly learned from
named plaintiff's employees. He had no knowledge of the truth or falsity of
this bribery accusation. Accordingly, defendant asserted that, if
defamatory, the statements were within the ambit of the common interest
qualified privilege and that he had acted "without malice or negligence."

Two issues are raised here concerning the second cause of action. The first
is whether or not there was a qualified privilege to make the statement.
The second is, assuming there was a qualified privilege, whether there has
been raised a sufficient factual showing of malice, knowledge of the
falsity of the statement, or reckless disregard of its truth or falsity
that it defeats the motion for summary judgment (Loughry v Lincoln Bank, 67
NY2d 369, 376).

The majority has properly concluded that there is a qualified privilege
here. Moreover, the plaintiff does not challenge the assertion that the
statement was qualifiedly privileged.

Given this qualified privilege, the burden shifts to the plaintiff to show
that the statement is nevertheless actionable because it is false and
motivated by malice (Toker v Pollak, 44 NY2d 211, 219; Park Knoll Assoc. v
Schmidt, 59 NY2d 205, 209; Restatement [Second] Torts 2d § 613). As
the law has developed in this area, "malice" has been assigned different
meanings based upon the context.[n 1] At common law, malice has been based
upon a determination that the statement is false, that the defendant knew
it to be false when published and, therefore, the defendant acted in bad
faith (Lovell v Houghton, 116 NY 520). In other words, actual malice at
common law meant "'personal spite or ill will, or culpable recklessness or
negligence'" (Hoeppner v The Dunkirk Printing Co., 254 NY 95, 106; see
also, Shapiro v Health Ins. Plan, 7 NY2d 56, 61). For malice to be found,
the fact that the statement was false had to be augmented by defendant's
desire to injure the plaintiff (id.). For purposes of a constitutional
analysis, actual malice has been defined as "with knowledge that [the
statement] was false or with reckless disregard of whether it was false or
not" (New York Times v Sullivan, 376 US 254, 280; Trails West v Wolff, 32
NY2d 207, 219). The standard articulated in New York Times v Sullivan
(supra) was expanded to consider whether there was a "high degree of
awareness" of the statement's probable falsity (Garrison v Louisiana, 379
US 64, 74) or that the defendant "in fact" entertained "serious doubts" as
to its truth (St. Amant v Thompson, 390 US 727, 731), as we acknowledged in
Pauling v National Review, Inc. (22 NY2d 818, 819). These expansions of the
constitutional standard evoke the common law concept of bad faith. Indeed,
this Court has recognized that consideration of malice in the
constitutional and the common law sense is proper in determining whether a
qualified privilege is to be given effect (Loughry v Lincoln Bank, supra,
67 NY2d 369, 376 [Conditional privilege may be negated by "statements
published with malice or with knowledge of their falsity or reckless
disregard as to their truth or falsity"]).[n 2] This dual analysis is
reflected in the New York Pattern Jury Instructions on qualified privilege
(see, PJI 3:32 [1991 Supp]).

In light of the foregoing, the issue of malice in the case at bar should be
reviewed under both standards. Under the constitutional standard, there is
an issue of fact as to whether there was a reckless disregard for the truth
or falsity of the bribery accusation or whether defendant, in good faith,
was attempting to ascertain the truth or falsity of the accusation. The
record is presently lacking any evidence to support the conclusion that
defendant knew that the accusation was false, that there was a high degree
of awareness of probable falsity, or that he entertained serious doubts as
to its truthfulness. Defendant denies any knowledge as to its truth or
falsity but maintains that he believed the accusation to be true because
the source was two of plaintiff's employees, whom he identified. (These
persons have not yet been deposed.) However, as to whether the defendant
may have shown a reckless disregard for the truth, it is significant that
the defendant and Kohler, the person to whom the statement was first made,
dispute whether the accusation was stated as a matter of fact or as part of
an inquiry. In Kohler's version of the conversation, the inquiry contained
therein pertained to the identification of the bribed police officer, not
the truth of the accusation. Clearly, there is an issue of fact here that
may be resolved by further discovery or that may require determination by a
trier of fact.

Turning to a common law analysis, there is sufficient evidence in this
record to create an issue of fact as to whether defendant's statements were
motivated solely by spite or ill will. The parties' acrimonious
relationship is accentuated by, inter alia, law suits, defendant tossing a
possibly lit firecracker into plaintiff's vehicle, and an incident where
defendant pounded on plaintiff's vehicle while occupied by plaintiff, his
wife, and their children. And, as discussed above, if it is found that
defendant stated the accusation as fact, spite or ill will may have been
the sole motivation.

Therefore, if plaintiff proves that the accusation is false, the foregoing
considerations suffice to create issues of fact as to malice under both
standards.

The conclusion that there is no triable issue of fact here because a jury
could not reasonably conclude that malice alone was the motivation for the
statement is not supported by the record. Plaintiff indeed has the burden
of proving that malice alone was the cause for the publication (Stukuls v
State of New York, 42 NY2d 272, 281-282). However, having presented a basis
for that conclusion, plaintiff should be afforded an opportunity to present
such evidence to a trier of fact that the actions of the defendant were
duplicitous and motivated solely by malice (see, Stukuls v State of New
York, supra, at 282 [The claim, affidavits, and the need for additional
discovery precluded finding that plaintiff could not raise an issue of
fact]). In this case, plaintiff has alleged that defendant filed the motion
for summary judgment before depositions of the employees who supposedly
told defendant of the bribery scheme could be taken. Accordingly, the
second cause of action should be reinstated.


F O O T N O T E S

1. In response to the divergent meanings attributed to the term "malice" in
the defamation area, the Restatement [Second] Torts 2d has abandoned its
use for the more comprehensive "abuse of privilege" terminology.[return to
text]

2. It should be noted that in Loughry the jury found, inter alia, that the
defendants acted "solely from malice intend[ed] to injure
plaintiff".[return to text]

* * * * * * * * * * * * * * * * *

Order affirmed, with costs. Opinion by Judge Kaye. Acting Chief Judge
Simons and Judges Titone, Hancock and Bellacosa concur. Judge Smith
dissents in part and votes to modify in an opinion.