10 N.Y.3d 542 (2008)
Under the Rent Stabilization Law and Code, a landlord can refuse to renew leases and recover possession of one or more rent-stabilized units for personal use as a primary residence without prior approval from the Division of Housing and Community Renewal (DHCR).
Summary
Landlords sought to recover all six rent-stabilized units in their 15-unit building for personal use, intending to convert the units into a single-family dwelling. The tenants sued, arguing that the landlords needed DHCR approval to remove all rent-stabilized units from the market. The New York Court of Appeals held that the plain language of the Rent Stabilization Law and Code allows an owner to recover “one or more” units for personal use without DHCR approval, provided they demonstrate a good-faith intention to use the units as their primary residence. This right is not limited even when the owner seeks to recover all the rent-stabilized units in a building.
Facts
The Economakises owned a 15-unit apartment building in Manhattan, with six units subject to rent stabilization. In 2004, they served notices of non-renewal to the rent-stabilized tenants, stating their intention to recover possession of all six units for the husband’s personal use as a primary residence. Their plan involved converting the units into a single-family home for themselves. The notices specified the intent to recover all apartments on floors one through five.
Procedural History
The tenants sued for a declaration that the landlord’s plan violated the Rent Stabilization Law and Code, seeking to enjoin any holdover proceedings. The Supreme Court initially granted a preliminary injunction against the landlords. Subsequently, the Supreme Court granted the tenants’ cross-motion, declaring that the landlords violated the Rent Stabilization Law by failing to obtain DHCR approval. The Appellate Division reversed, holding that the “owner occupancy” provision applied, not the “market withdrawal” provision. The tenants appealed to the Court of Appeals.
Issue(s)
Whether the Rent Stabilization Law and Code permit a landlord to recover all rent-stabilized units in a building for personal use as a primary residence without first obtaining approval from the DHCR, when the landlord intends to combine the units into a single residence.
Holding
Yes, because the plain language of the Rent Stabilization Law and Code allows an owner to recover “one or more” stabilized dwelling units for personal use as a primary residence without DHCR approval. 9 NYCRR 2524.4(a) controls when an owner seeks possession for personal use; 9 NYCRR 2524.5(a)(1) applies only when an owner seeks to withdraw units from the rental market for business use or due to excessive violation removal costs.
Court’s Reasoning
The Court of Appeals emphasized that statutory interpretation begins with the plain language of the statute. The Rent Stabilization Law (Administrative Code of City of NY § 26-511[c][9][b]) and the Rent Stabilization Code (9 NYCRR 2524.4[a][1], [3]) permit an owner to refuse renewal leases and recover possession of “one or more” stabilized units for personal use without DHCR approval. The court rejected the tenants’ argument that 9 NYCRR 2524.5(a)(1)(i), requiring DHCR approval for withdrawing accommodations from the rental market, applied. The court clarified that 2524.5(a)(1) is triggered only when the withdrawal is for business use or due to excessive violation removal costs. The court stated, “Of course the Legislature intended to make more rental housing available, but it also intended to allow owners to live in their own buildings if they choose to do so. The unambiguous language of 9 NYCRR 2524.4 (a) was chosen by the Legislature to reconcile these conflicting policies, and we give effect to the plain meaning of that language.” The court underscored that the landlords still needed to establish, in Civil Court holdover proceedings, their good faith intention to use the apartments as the husband’s primary residence. This case clarifies that a landlord’s right to recover units for personal use extends even to recovering all rent-stabilized units in a building, subject to demonstrating good faith intent.