On November 25, 2009, Justice Alice Schlesinger of New York State Supreme Court

• ruled that DHCR's November 2007 regulations on "unique or peculiar circumstances" are valid, and

• sent the case back to DHCR to determine within 150 days the thousands of "unique or peculiar" applications pending regarding 24 buildings state-wide.

Click here for a copy of the decision (and click here for the corrected caption). Click on "read more" below for a summary.

Click here for a chart of the case as of July 7, 2010.

Her decision states that:

(1) the KSLM (Westgate) decision only gave landlords the right to APPLY for "unique or peculiar circumstances" rent adjustments, not an automatic right to GET such increases.

(2) DHCR's Nov. 2007 regulation is valid. That regulation states that just leaving Mitchell-Lama is not by itself a "unique or peculiar circumstance" but landlords may apply to DHCR for increases based on individual apartment issues (or building-wide based on "hardship").

• The DHCR regulation is consistent with the KSLM decision by the State's highest court, the Court of Appeals.

• The "aside" by the Appellate Division (the mid-level court) about whether leaving Mitchell-Lama is a "unique or peculiar circumstance" is not binding, in part because it is based on three letters from DHCR responding to a speculative (hypothetical) question in a different matter. (Similarly an "aside" - legally called "dicta" - by Judge Stone earlier in this case is not binding because it was superfluous to what he was actually ruling on.) It is also not valid because the Court of Appeals did not reference that point in modifying the decision.

• The DHCR regulation is within that agency's legal mandate, filling in the blanks left by a statute.

• The DHCR regulation is consistent with the history of how DHCR has applied laws with the phrase "unique or peculiar circumstances" historically. The judge went back to the 1951 Rent Control Plan, a state report, where the phrase was first used, and followed it up historically, showing that it was used only for individual apartments and NOT across the board. Most tellingly, a DHCR Bulletin of that year said U or P increases would not apply "where the maximum rents had been reduced by Federal authorities . . .during a period of Federal regulation before the building became subject to the New York State regulations jurisdiction. The Commissioner opined that, since the rents had been set pursuant to Federal laws then in effect, the circumstances cannot be considered 'unique or peculiar' so as to warrant a rent increase upon the building's entry into the State regulatory system." (page 20 of the decision.)

(3) Where a law (including a regulation) changes while an application is pending, generally the NEW law applies. In this case, there is no difference between the new regulation and DHCR policy before that regulation.

(4) The DHCR regulation is constitutional (the regulation was within DHCR's authority), so the court dismissed the owners' claims of unconstitutionality.

Justice Schlesinger's orders as concerns the tenants:

(A) She lifted the stay (holding action) a former judge had imposed on DHCR, and ordered DHCR to DECIDE THE U or P APPLICATIONS WITHIN 150 DAYS for Columbus House and for the buildings involved in the Highbridge House case.

(B) She did NOT order DHCR to apply its "old" (pre-regulation) policy, in part because that is not legally required, and in part because the old policy and the new regulation apply the same policy.

THE BUILDINGS NAMED IN THIS LAWSUIT ARE:

BRONX:

• Highbridge House Ogden, LLC (formerly Highbridge House) - Bronx
• Noble Mansion Associates LLC (Bronx)
• Stellar 2020 LLC (Boulevard Towers I) (Bronx)
• Stellar Bruckner, LLC (Bruckner Towers) (Bronx)
• Janel Towers LLC (Janel Towers) (Bronx)
• Stellar Morrison LLC (Bronx)
• Stellar Sedgwick LLC (1889 Sedgwick) (Bronx)
• Stellar Undercliff, LLC (Undercliff) (Bronx)

BROOKLYN

• Stellar 341 LLC (Prospect Towers) (Brooklyn)

MANHATTAN

• Columbus 95 (Columbus House)
• Axton Owner LLC (New Amsterdam)
• Central Park Gardens (West 97th St. Realty Corp.)
• Columbus Manor LLC
• Town House West, LLC
• Westview (765 Amsterdam Ave LLC)
• Westwood House, LLC

HEMPSTEAD, NASSAU COUNTY

• Stellar Hempstead (Hempstead, NY)