Ziman v. New York State Division of Housing & Community Renewal , 153 A.D.2d 489 ( 1989 )

Judgment, Supreme Court, New York County (Dennis Edwards, Jr., J.), entered September 12, 1988, which denied the petition and dismissed the proceeding, reversed, on the law, the petition granted, without costs, and the matter remitted to respondent, which is directed to issue the requested certificates of eviction pursuant to 9 NYCRR 2204.4 (g) and 2204.9.

In February 1984, petitioners purchased a small, 200-year-old, Federal-style townhouse in Greenwich Village for the express purpose of converting it back to its original use as a one-family residence and occupying it with their son and daughter, aged seven and two. The house had earlier been subdivided into as many as seven rent-controlled units of one to two rooms each.

Shortly after their purchase, petitioners applied, pursuant to then section 55 of the New York City Rent and Eviction Regulations (Regulations) (now 9 NYCRR 2204.5), for eviction certificates for the three remaining rent-controlled tenants. At the time of their application, section 55 required the issuance of a certificate of eviction where the owner of a building containing 12 or less housing accommodations sought, in good faith, to recover possession of the premises for use and occupancy by him or his immediate family. Three and a half months later, on July 19, 1984, the Legislature amended section 55 to protect certain tenants, including ones who had lived in the building for 20 years or more (L 1984, ch 234). At the time, one of petitioners’ tenants met the 20-year criterion and a second one qualified during the course of the administrative proceedings; the third died in 1987 and his apartment is no longer the subject of this proceeding. On August 9, 1984, petitioners filed three additional applications seeking certificates of eviction pursuant to section 59 of the Regulations (now 9 NYCRR 2204.9) on the ground that they sought, in good faith, to withdraw the occupied apartments from the market because the continued operation of such apartments imposed an undue hardship on them within the meaning of Regulations § 54 (g) (now 9 NYCRR 2204.4 [g]) because of their inability to make a net annual return of SV¿% of the assessed valuation of the property without recourse to the evictions sought. In audits dated April 2, 1985 and October 7, 1985, respondent found that an SVz% return on the premises was not realizable.

In dismissing petitioners’ consolidated applications, the Administrative Law Judge, finding that petitioners’ sole purpose in seeking the eviction was to occupy the house as their primary residence, held that section 55 specifically controlled this factual situation and petitioners could not avoid it by looking to section 59. He then held that the Division must only consider the section 55 application which had to be dismissed because both tenants had lived there for more than 20 years.

In deciding petitioners’ administrative appeal, respondent, in its order dated February 26, 1987, affirmed the Administrative Law Judge’s findings and recommendations and held in pertinent part: "One section of the rent control laws and regulations may not be used to circumvent or evade another section. The case here is one where the owners are seeking to evict tenants for their own use and occupancy. The Legislature chose to extend special protection to certain classes of tenants in that situation. The parties may not use other sections of the regulations (9 NYCRR 2204.4 and 2204.9) to evade the intent of the Legislature.”

Although there is no case law on the issue, the Regulations clearly provide that the protection afforded to long-term tenants of 20 or more years standing is limited to applications for eviction on grounds of the landlord’s personal use and occupancy (see, e.g., Matter of McMurray v New York State Div. of Hous. & Community Renewal, 135 AD2d 235, 236). If the Legislature, in adding such protection (L 1984, ch 234), intended to extend it to hardship applications under 9 NYCRR 2204.9 and 2204.4 (g), it could have done so. Absent any evidence of such intent, there is no basis for respondent’s interpretation of the Legislature’s amendment. Amendments or repeals of statutes by implication are not favored. (People v Newman, 32 NY2d 379, 389-390; McKinney’s Cons Laws of NY, Book 1, Statutes § 370.)

Accordingly, since there is no question that petitioners meet the hardship requirements of 9 NYCRR 2204.9 and 2204.4 and their express purpose of converting their house to its original use as a single-family residence is consistent with their request to remove the apartments in issue from the housing market, to deny them the requested certificates of eviction was arbitrary and capricious. Concur—Murphy, P. J., Kupferman, Ross and Asch, JJ.