Dealing with a "gut renovation"

[mkraft]

What are the best ways for tenants to deal with a "gut rehab" situation?

Posting on behalf of myself and several others:

- We live in Manhattan rent stabilized apartments (all in the same building).

- The new landlord plans a "substantial rehabilitation" of all apartments (half are currently vacant).

- We would like to locate information that will help us determine how best to deal with this situation.

One primary consideration: In actual enforcement terms, how closely are landlords held to "warranty of habitability" requirements during gut renovations? Do any NYC tenant organizations maintain statistics on this?

Are we better off trying to locate temporary living situations elsewhere (until the renovations are done) while continuing to pay rent on our current apartments so we don't lose them? (Our rents are low compared to current market rents for comparable apartments. We want to keep them.)

We've been advised that any agreement we might make with the landlord to allow us to temporarily relocate * without paying rent * on our current apartments (i.e., even if the landlord agrees to it) would be risky. The rent stabilization law apparently has no provision for such arrangements. That raises the possibility of the landlord's later reneging on letting us back into our apartments, which would force us into potentially costly ligitation over issues that are not covered by rent stabilization.

Thanks. Knowledgable replies greatly appreciated.

[chelsea]

For starters, if you haven't already, check out the DHCR bulletin on substantial rehabilitation 95-2 (URL below). This is now part of the Rent Stabilization Code.

http://www.dhcr.state.ny.us/ora/pubs/html/orao952.htm

A couple of things right off the bat:

Since the goal is to create new housing, the DHCR policy allows a finding of substantial rehabilitation only if a building is "substandard or seriously deteriorated," i.e. more than 80 percent vacant. If 50 percent of the units in your building are occupied, it doesn't sound if it qualifies.

Note the provision on constructive occupancy, where if tenants are relocated, they can pay a token rent such as $1 to maintain their rights to rent stabilization.

You should determine if the owner is seeking a J-51 tax abatement. If so, and the building is rent stabilized before the renovation, it will remain rent stabilized afterward, even if gut renovated.

Also see 446 Realty Co. v. Higbie in the tenant.net Housing Court summaries:

http://www.tenant.net/Court/Hcourt/archive/2000/nov00.html

<small>[ May 16, 2002, 12:41 PM: Message edited by: chelsea ]</small>

[mkraft]

I wasn't at all aware of the 80% requirement, which might really help us. It wasn't mentioned by an attorney I spoke to at West Side Tenants Union, nor were your points about "constructive occupancy" and J-51.

I'm in the process of checking out the links you included.

Thanks!!!

However, we would still like to know what to do if the landlord prevails (he might get the 80% through buyouts and/or other means) and starts tearing the building apart.

Realistically, are we going to be able to hold him to the 'warranty of habitability' (i.e., will NYC enforce it?) or should we plan to find temporary digs elsewhere until the work is completed? We would prefer not to have to move but we don't want to waste all our time fighting and we don't want to be miserable.

Thanks again.

[chelsea]

The "substantial rehabilitation" issue refers to whether the building will become exempt from rent regulation, not whether the renovation can be done at all. DHCR will decide the rent issues; the Building Department and to a certain extent HPD will decide what kind of work can be done and if it's adversely affecting tenants. Buyouts shouldn't exempt the building from rent regulation, since the building was still in good enough shape for people to live in. If your apartment is rent stabilized, you generally have the right to remain there. That being said, the landlord can still make your life pretty miserable with the way construction is carried out. Or the landlord can wait till the present tenants leave and carry out construction that may enable him to raise the rent enough to exempt the apartment from rent regulation. The best thing is for the tenants to get organized. Contact the Building Department to find out what work is planned. If construction starts and is creating problems for the tenants, contact the Building Department and possibly HPD. To find out if there's a J-51, contact HPD and the city Finance Department.