Tricks of the Trade

Landlords Use Obscure Law to Ditch Rent Rules

There was a time when, if the landlord of 446-450 West 19th Street wanted

tenants out, he'd use several means: He might flood them out, freeze them out, or just plain scare the heck out of them by putting goons in some apartments or leaving the buildings so insecure, an occasional arsonist would squat. Such property management techniques earned the landlord,

former NYPD lieutenant Thomas Lydon, a two-year jail stint ending in 1988. Lydon was part of a pack of landlords who, from 1979 to 1984, terrorized tenants in more than 300 apartments across Manhattan in hopes of hiking rents or converting apartments to co-ops.

Lydon is long gone from the city's real estate radar, and for nearly a decade, 446 West 19th has had a new landlord, builder Jeffrey Levine. Conditions are markedly improved—Levine reported more than $600,000 in renovations to the state Division of Housing and Community Renewal—and criminal activity has ceased. But while Levine's style is decidedly different from Lydon's, he has a similar goal: He wants tenants out so rents can rise. Instead of menacing them, however, Levine uses more polite tactics, relying in one pending case on lawyers and an obscure but increasingly popular provision that allows some landlords to ditch rent rules.

Under a 1974 state law, buildings that have undergone "substantial rehabilitation" can be exempted from rent regulation. Citing that law, Levine's lawyers are claiming in Manhattan housing court that the $1675-a-month one-bedroom apartment of Janet Higbie is deregulated because the building was substantially rehabbed after Lydon's conviction; since Higbie did not move in until 1994, they reason, they should win the exemption. Higbie argues that the apartment is indeed regulated and that Levine is overcharging her by several hundred dollars a month. Her trial ended November 16; Judge Douglas Hoffman's decision is months away.

Higbie's case is complicated, but tenant advocates say its central issue regarding rent laws and rehabilitation is increasingly common as landlords seize whatever means they can to cash in on a hot market. "Right now, this is the easiest bureaucratic way to get your building deregulated," says Bob Kalin of the Tenth Avenue Housing Conservation Coordinators office; he rattles off three addresses within a four-block area where landlords hope the substantial-rehab law will knock entire buildings out of rent regulation. "The original incentive was to encourage people with deteriorated property to fix it up, but now it's playing out as a convenient way to empty a building," says Kalin. "There's no provision for graduated rent increases; it's just a quick and easy way for tenants to lose their rights."

Levine and his attorney declined to comment for this story. Higbie's lawyer, William Gribben, calls applying the 1974 law to the former Lydon crime scene misguided and ironic: "This address is famous because it has a history with a band of criminal landlords, and now the new landlord comes in and claims that substantial rehab was done? Of course it was, because this building was wrecked by a landlord. Any work that's been done is just repair work. No landlord should benefit from a criminal conspiracy to get tenants out."

Guidelines from DHCR, which administers rent laws, prohibit buildings from exemption if there has been an outstanding finding of harassment. In 1988, DHCR found Lydon and several accomplices had committed harassment and that "buildings were transformed into hellholes," putting tenants "in mortal fear." Two years earlier, Lydon had pleaded guilty to 54 criminal counts including burglary, grand larceny, and assault.

Because a 1987 agreement gave remaining Lydon tenants rent-regulated status for life, a ruling against Higbie would not immediately destabilize the whole building. But it would begin by taking three of eight apartments out of the system; the other apartments would be deregulated as they become vacant.

Higbie, an editor at The New York Times, says that when she rented the apartment for $1400 in 1994, she was told that it was not stabilized but that increases would be reasonable. When two years later her rent jumped to $1675, she called DHCR and learned that the agency considered the apartment stabilized and that the last registered rent was $138.36. She filed an overcharge complaint in 1996 which is pending; in 1998, she stopped paying rent. Levine sued her for back rent, and the argument about the building's stabilized status ensued.

"My main concern is not the rent level but the right to renew my lease and to stay here," says Higbie, whose apartment has a small rooftop room and terrace that were added after 1989. "If you don't have rent stabilization, you can get kicked out very easily."

A landlord who in May bought a tenement at 104 East 98th in Manhattan applied directly to DHCR for exemption of all 10 units because of renovations allegedly done as part of a failed 1987 co-op plan. As evidence, attorney James Marino submitted to DHCR a 1987 architect's statement and the offering plan filed with the state attorney general describing anticipated renovations. Gribben, who is representing tenants in this building, has protested to DHCR, saying there's no proof that the renovations were done. He adds that current conditions are deteriorated, and questions whether the building was legally vacated in the mid 1980s.

Marino has not seen Gribben's papers and could not respond to them, "but we have invited DHCR to come and tour the building themselves." He says some documents are in the future tense because they were written as work was being done, and that records of the attorney general do not dispute the plan's claims or suggest that anyone was forced out.

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