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Posted by Westie on March 15, 2000 at 00:13:53:

Another sponsor, together with purchasers of shares of occupied apartments, has filed hardship increase with DHCR. we found 2522.4 which says he can't do it for the rent stabilized tenants, but nothing similar for the rent controlled tenants. A decision in your DHCR database says he can: but it points to an old court case that relied on a section of the old rent control law that no longer exists.

Question: can a sponsor or a holders of shares of occupied apartments get a hardship/capital value increase against rent controlled tenants?

Common sense says NO: they knew the facts before they converted/purchased, so they're stuck with it.

DHCR said NO, then yes. Coop-conversion tenants, pro bono lawyer, etc, all say NO: but can't point to a law.

We have to file responses with DHCR. The landlords do have accounting errors, etc., but...

Does anyone know what happened in the case that follows?

Does anyone know the correct name of the parties so we can find the Article 78 case?

Does anyone know the answer to: can a sponsor/purchaser file a hardship/capital value for rent controlled apartments?

Thank you very much.

ps: we plan to call Met Council tomorrow, but need all the help we can get asap.

http://tenant.net/Tengroup/Metcounc/Jun96/brief2-f.html

Chelsea Co-Op Tenants Face Doubled Rents

Rent-controlled tenants at four buildings in the Chelsea section of Manhattan may
have their rents doubled if the state Division of Housing and Community Renewal
approves their landlord's hardship application for rent increases.

The owner/sponsor of the four "Four Corners" buildings, 405 and 465 West 23rd
St. and 410 and 470 West 24th St., has applied for the exemption from rent control
on the grounds that he will not be able to make an 8.5 percent return on capital
value for each apartment in the buildings unless the 93 rent-controlled tenants pay
twice what they pay now. State law allows landlords "hardship" increases if they
can prove they are not making this minimum profit.

The landlord converted the four buildings to a co-op in the mid-1980s and holds
the shares allocated to the unsold apartments. The application contains about 100
pages of financial data which shows a purported deficit between the co-op
expenses of each apartment and the rent. Many of the co-op costs are inflated and
artificial, including payments on a $20 million mortgage that the owner/sponsor
"gave" to the co-op and $10 million in "improvements," which were inducements to
help sell co-op apartments.

These four buildings could be a test case affecting thousands of rent-controlled
and rent-stabilized tenants who live in converted buildings where the former
owner/sponsor can come up with similar numbers and use them to claim hardship
increases.

Billy Gribben

Follow Ups:

• Re: sponsor filed for hardship increases JH 03/21/00 (0)

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Comments:
: Another sponsor, together with purchasers of shares of occupied apartments, has filed hardship increase with DHCR.  we found 2522.4 which says he can't do it for the rent stabilized tenants, but nothing similar for the rent controlled tenants.  A decision in your DHCR database says he can: but it points to an old court case that relied on a section of the old rent control law that no longer exists.  

: Question: can a sponsor or a holders of shares of occupied apartments get a hardship/capital value increase against rent controlled tenants?

: Common sense says NO: they knew the facts before they converted/purchased, so they're stuck with it.

: DHCR said NO, then yes.  Coop-conversion tenants, pro bono lawyer, etc, all say NO: but can't point to a law.

: We have to file responses with DHCR.  The landlords do have accounting errors, etc., but...

: Does anyone know what happened in the case that follows?

: Does anyone know the correct name of the parties so we can find the Article 78 case?

: Does anyone know the answer to: can a sponsor/purchaser file a hardship/capital value for rent controlled apartments?

: Thank you very much.

: ps: we plan to call Met Council tomorrow, but need all the help we can get asap. 

: 
: http://tenant.net/Tengroup/Metcounc/Jun96/brief2-f.html

: Chelsea Co-Op Tenants Face Doubled Rents

: Rent-controlled tenants at four buildings in the Chelsea section of Manhattan may
: have their rents doubled if the state Division of Housing and Community Renewal
: approves their landlord's hardship application for rent increases. 

: The owner/sponsor of the four "Four Corners" buildings, 405 and 465 West 23rd
: St. and 410 and 470 West 24th St., has applied for the exemption from rent control
: on the grounds that he will not be able to make an 8.5 percent return on capital
: value for each apartment in the buildings unless the 93 rent-controlled tenants pay
: twice what they pay now. State law allows landlords "hardship" increases if they
: can prove they are not making this minimum profit. 

: The landlord converted the four buildings to a co-op in the mid-1980s and holds
: the shares allocated to the unsold apartments. The application contains about 100
: pages of financial data which shows a purported deficit between the co-op
: expenses of each apartment and the rent. Many of the co-op costs are inflated and
: artificial, including payments on a $20 million mortgage that the owner/sponsor
: "gave" to the co-op and $10 million in "improvements," which were inducements to
: help sell co-op apartments. 

: These four buildings could be a test case affecting thousands of rent-controlled
: and rent-stabilized tenants who live in converted buildings where the former
: owner/sponsor can come up with similar numbers and use them to claim hardship
: increases. 

: Billy Gribben 


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