Rosenberg & Estis, P.C. Secures Appellate Division Win For Owner, Preserving Rent Stabilization Exemption

Appellate Division, Second Department, Decided April 7, 2021
Featuring Jeffrey Turkel

Rosenberg & Estis prevailed recently in the Appellate Division, Second Department of the New York State Supreme Court in a dispute over whether New York’s rent stabilization law applied to a Brooklyn apartment building. The Appellate Division ruled that the building was exempt from rent stabilization, upholding an August 18, 2017, ruling by state Supreme Court Justice Peter Sweeney, Jr. of Kings County.

The dispute focused on whether the building was exempt from rent stabilization on the ground that it had been substantially rehabilitated as family units. The tenants prevailed before DHCR, at which point the owner and property manager retained Rosenberg & Estis. After the firm commenced an Article 78 proceeding, DHCR agreed to take the case back to consider the owner’s arguments. On July 22, 2015, DHCR reversed itself and found that the building was exempt from stabilization based on substantial rehabilitation.

The tenants, along with their tenants’ association, filed suit in Kings County, against the NYS DHCR as well as the owner and property manager. In August 2017, Justice Sweeney ruled against tenants and the tenants’ association. The tenants and their association appealed to the Appellate Division.

Appellate Division justices Mark Dillon, Sylvia Hinds-Radix, Hector Lasalle and Betsy Barros unanimously sustained Justice Sweeney’s decision. The Appellate Division justices held that the DHCR correctly determined based on the evidence before it that this building had been substantially rehabilitated, as the owner and property manager had asserted.

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