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Court reverses DHCR hardship policy.

Court reverses DHCR hardship policy

In a recent rent-control case, a state court told the New York State Division of Housing and Community Renewal (DHCR) to strictly enforce the formula for calculating hardship rent increases.

The New York State Supreme Court ordered DHCR to adhere to the standard formula, an outcome that is expected to yield higher increases for property owners in the future.

Landlord Peter Sharp originally filed for hardship rent increases for two Upper East Side buildings under rent control regulations. Sharp submitted that his net annual return had dipped below legal limits.

Current regulations call for increases based on the assessed value of the property multiplied by the 1972 equalization ratio.

The owner retained Rosenberg & Estis, P.C., a Manhattan law firm specializing in real estate matters, to appeal the decision. "Assessed values are higher than transitional values and equalization ratios have increased steadily since 1972," explained managing partner Gary M. Rosenberg. "As computed by DHCR, the increase for the two buildings were 52 percent and 62 percent less than the amount mandated by law."

Agreeing with the landlord, Justice Shirley Fingerhood directed DHCR to follow the proper formula for calculating hardship rent increases. "The decision represents a major advance for all landlords who have not obtained a fair return on rent-controlled apartments," said Rosenberg.

Attorney Jeffrey Turkel, the Rosenberg & Estis partner who represented the landlord, said: "For years DHCR has skewed its hardship formula to deprive owners of thousands of dollars in hardship rent increases. But owners desperately need these increases to stay even with escalating expenses. The court has now put DHCR on notice that the agency, in determining such applications, must strictly abide by the law."
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Title Annotation:New York State Division of Housing & Community Renewal
Publication:Real Estate Weekly
Article Type:Brief Article
Date:Jan 22, 1992
Words:282
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