BBG Secures Rare DHCR Order Allowing Non‑Renewal of Rent‑Stabilized Lease for Demolition

BBG’s Kara Rakowski, with the assistance of Jessi Maduro, obtained an order from the New York State Division of Housing and Community Renewal (DHCR) granting an owner’s Application for Permission Not to Renew a Rent‑Stabilized Tenant’s Lease pursuant to Section 2524.5(a)(2) of the Rent Stabilization Code, based on the owner’s good‑faith intent to demolish the building.

Section 2524.5(a)(2) permits an owner of a building containing occupied rent‑stabilized units to seek DHCR approval not to renew existing leases where the owner intends, in good faith, to demolish the building. A similar provision exists under the Rent and Eviction Regulations for buildings containing rent‑controlled units. Despite these statutory pathways, DHCR has rarely granted demolition applications for more than two decades.

Although the tenant has filed a Petition for Administrative Review, and the order is therefore not final, this decision signals that demolition applications under Section 2524.5(a)(2) may represent a viable, though still challenging, option for owners of rent‑regulated buildings in appropriate circumstances.

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For further information regarding DHCR demolition applications, reach out to your BBG attorney of record or contact us here to discuss how this development may apply to your property.

Written by Kara Rakowski, Partner and Co-Chair of Administrative Law Department