512 E. 11th St. HDFC v. Grimmet

In 512 E. 11th St. HDFC v. Grimmet (181 AD2d 488, 581 NYS2d 24 [1st Dept 1992]), the respondent occupied the premises under New York City Tenants Interim Lease (TIL) program. The building was rehabilitated and converted to a not-for-profit housing cooperative. Respondent elected not to purchase his apartment and the landlord sought to evict him based on the termination of his month-to-month tenancy. The Civil Court dismissed the petition on the grounds that the respondent was rent stabilized and thus could only be terminated pursuant to the Rent Stabilization Code (9 NYCRR) 2524.3. The Appellate Term reversed, holding that the building, as a not-for-profit housing cooperative corporation organized under General Business Law 352-eeee and Private Housing Finance Law article XI, was exempted from Rent Stabilization Law of 1969 (Administrative Code of City of NY) 26-504 (a). The Appellate Division agreed that the building was exempted but reversed on the grounds that the government was "sufficiently entwined" with the premises so as to trigger constitutional due process protections requiring notice of the reasons for an eviction. (512 E. 11th St. HDFC v. Grimmet, supra at 489.) The Court specifically noted that the stated purpose of the HDFC was to develop low-income housing. It also reasoned that since the city imposed restrictions on the use, sale and transfer of shares of the housing project and retained a right of reversion in the event the cooperative failed to abide by the terms and conditions placed upon the building and its use, "eviction . . . requires a cause other than mere expiration of the lease". Id. Since petitioner failed to set forth a cause for respondent's removal beyond termination of his month-to-month tenancy, the petition was dismissed.