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Tenant Organizing Manual

Demolition

Many tenants in this community have organized because their owner has threatened to demolish the building or because they believe that the owner intends to do so. Frequently, before an owner takes any of the necessary legal steps to obtain approval to demolish the building, or, before an owner is ready to "make a deal" with the tenants, many have already moved out because of lack of services, harassment, fear that the building will be illegally demolished around them, or because they did not know that they had a right to stay and challenge the owner's actions. This situation makes it critical for tenants to organize to exercise their right to stay in the building.

Possible indications of an owner's intent to demolish the building

Tenants should look for and document the following signs:

  1. emptying of stores in the building
  2. vacant apartments not being re-rented
  3. owner offering money to tenants to move
  4. owner offering to relocate tenants
  5. decrease of essential services
  6. harassment of tenants, including an owner telling tenants they have to move

If one or more of these occur, it could mean that the owner intends to demolish the building. Before beginning any action, there are two factors that tenants should understand:

  1. An owner cannot just demolish a building.
  2. There are stricter and different standards that protect tenants in rent-controlled apartments from eviction, as opposed to tenants in rent-stabilized apartments. In buildings that have both rent-controlled and rent-stabilized apartments, the owner must meet the criteria for each apartment type, as outlined below.

Legal Application Procedure

An owner must apply to the New York State Division of Housing and Community Renewal (DHCR) for an order giving him/her permission to "withdraw the building from the rental market," that is, to evict the tenants. In such an application, the owner must state that his/her purpose is to demolish the existing structure and to erect a new one on the same site.

For Tenants in Rent-Stabilized Apartments.

To obtain permission from DHCR not to renew leases of tenants in rent-stabilized apartments (those whose occupancy began after July 1, 1971, whose building contains six or more units and was built before 1969, or later if it used a special tax abatement program such as 421-a), the owner must show:

  1. that s/he seeks in "good faith" to demolish the building and construct a new one. "Good faith" could constitute whether the owner has the financial resources to begin and complete the new construction; whether s/he has the legal right to demolish the building (if the building is a landmark or in a NYC historic district, s/he would have no legal right to demolish the building); or whether s/he were found to be engaging in a "concerted effort" to harass tenants.
  2. that s/he either has had plans approved by the NYC Buildings Department for the new building, or, that plans are being prepared. Depending on the zoning for the site, the "new" structure can be either residential or commercial. If plans are in the preparation stage, DHCR, while the application is pending, could give permission not to renew leases when they expire, but with the condition that the owner must have the plans approved within a reasonable time.

Throughout this process, DHCR may seek to negotiate a settlement between the owner and tenants and MAY require the owner to relocate and/or compensate rent-stabilized tenants. In general, such relocation and/or compensation criteria are discretionary and determined by DHCR on a building-by-building basis. Reference: Section 54D(1) of the RENT STABILIZATION CODE [note: this refers to the pre-1987 code]

For Tenants in Rent-Controlled Apartments

In 1974, the New York State Legislature passed the "Preservation of Sound Housing Act" to prevent the demolition of "economically viable buildings." At the time of the law's passage, only rent-control was in effect, thus this law only offers protections for tenants in rent-controlled apartments (those who have lived, since June 30, 1971, in the same apartment in a building built before 1947). Recent attempts to amend the Preservation law to include tenants in rent-stabilized apartments have been unsuccessful, thus far.

An owner, to obtain permission from DHCR to issue Certificates of Eviction in order to evict tenants to demolish the existing building' must show the following:

  1. "good faith" clause is similar as noted above for tenants in rent-stabilized apartments.
  2. In addition to the "plan approval" clause as shown in (2) above, if the owner intends to build new housing, it must contain at least 20% more units than the existing building. BUT if the existing building has so many violations that the cost of correcting them would equal or exceed the building's assessed value, the new building need only contain more units than the old one.
  3. the owner must show that there is "no reasonable possibility" that s/he can make a net annual return of 8-1/2% of the assessed value of the property s/he wants to demolish.
  4. the owner must show that neither s/he nor the prior owner "intentionally or willfully" managed the building so as to impair the ability to earn such a return.

In order to be given permission to issue Certificates of Eviction the owner WILL BE REQUIRED to relocate the tenants to other "suitable" accommodations, and WILL BE REQUIRED to pay tenants a one-time stipend based on the number of rooms in the apartment. The specific terms of such an agreement will be negotiated by DHCR between the owner and the tenants. References: CITY RENT & EVICTION REGULATIONS, Section 54 and Section 58.

The effect of the legal application procedure since 1974

Since 1974, very few owner applications necessary for demolition have been approved. Of the handful that have, the tenants, through legal proceedings, have challenged successfully the decisions and have either stopped or delayed the project. Because of the intricacies of the laws and procedures, most of these tenants associations have retained attorneys to act on their behalf.

In buildings currently facing demolition, if the tenants' association decides to have legal representation, LHNA recommends that they carefully interview attorneys in order to ensure that the one they retain has the same goals as the tenants' association.

Owners who try to by-pass the legal process

Because so few owner applications have been approved, many owners seek to by-pass the legal process by privately settling with tenants. In many of these cases though, by the time the owner is ready and willing to "make a deal," most of the building's tenants have already moved out due to harassment, lack of services, etc. Thus, it is critical for tenants to organize so that, as a group, they can better protect themselves from such owner actions.

Ultimately, it will be the individual tenant who must decide whether to accept an owner's offer of money or relocation. LHNA recommends that tenants carefully review their options and, at the least consider the following:

  1. Where will the tenant go? In today's housing market, how long will the money pay for another apartment? Will the tenant be able to continue paying the rent once the money runs out?
  2. The "monetary settlement" will count as income and subject to income tax
  3. For elderly tenants or tenants on fixed incomes who are recipients of government entitlement programs (Medicaid, SSI, Public Assistance, Food Stamps, SCRIE, etc.) receiving money counts as income and can make them ineligible for continued services and/or benefits.
  4. If the tenant is offered an apartment somewhere with the owner claiming that the rent will be the same being paid now, is this in writing? How long will this "deal" last? What happens then? Will the new apartment be covered by rent regulations? For how long?
  5. Long-time community residents who have developed informal network) of support near their present homes may have difficulty adjusting to a new location.

 

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