Greichel v Division of Hous. & Community Renewal
Annotate this CaseDecided on October 28, 2005
Supreme Court, New York County
Lubov Shmidt Greichel, Petitioner, For a Judgment Under Article 78 of the Civil Practice and Rules
against
Division of Housing and Community Renewal, Respondent.
100366/05
Marilyn Shafer, J.
Background
Petitioner Libov Shmidt Greichel ("Mrs. Greichel") and Jakov Greishel ("Mr. Greichel") were married on June 26, 2000. Mr. Greichel lived at 444 Neptune Avenue, Apartment 11-0, Brooklyn, New York 11224 ("the subject apartment") for many years until his death in August 2003. The subject apartment is located in a housing development owned by Trump Village Section 3, Inc. ("Trump Village"). Following his death, Mrs. Greichel applied to succeed her husband's lease by letter dated October 8, 2003. By letter dated January 9, 2004, Trump Village denied Mrs. Greichel's request for succession because she "did not co-occupy the Apartment for the requisite two year period and was not listed as a resident on the Tenant's income affidavits" (January 9, 2004 Letter, para. 3). Mrs. Greichel filed an administrative appeal to the respondent New York State Division of Housing and Community Renewal ("DHCR") on February 6, 2004. Trump Village did not submit any opposition. On October 4, 2004, the DHCR issued an Order Denying Appeal, which affirmed the denial of succession rights to Mrs. Greichel ("DHCR Order"). Mrs. Greichel then commenced the instant Article 78 proceeding to challenge the determination of the DHCR Order as arbitrary and capricious and contrary to the facts and evidence presented. Mrs. Greichel also alleges that Trump Village failed to timely issue its decision which should result in vacatur of its denial. DHCR cross-moves to dismiss the petition.
Mitchell-Lama Housing
Trump Village is a limited profit housing company organized under Article II of New York State's Private Housing Finance Law ("PHFL"), also know as the Mitchell-Lama Law, and supervised by the DHCR. The Mitchell-Lama Law was enacted by the State legislature to encourage private industry to build affordable housing for low and moderate income tenants. As a Mitchell-Lama company, housing companies like Trump Village receive a municipal real property tax exemption, and low interest government financing, including a State financed low-interest mortgage loan. In exchange, they agree to limit their return on their investment, resulting in below market rents, and the buildings are subjected to governmental supervision in their operations. Consistent with its purpose, the Mitchell-Lama Law restricts admission to these [*2]developments to tenants with moderate income and mandates that rental surcharges be imposed on tenants when their income exceeds statutory limits. To ensure compliance with the income eligibility requirements, the tenant is required to annually fill out and submit the "Occupant's Certification of Income," also referred to as the annual income affidavit (9 (C) NYCRR 1727-1.3). Further, the housing company must be notified within 90 calendar days of any additions to or deletions from the tenant's family who resides in the housing accommodation (9 (C) NYCRR 1727-2.5(a)). It is undisputed that Mr. Greichel failed to include Mrs. Greichel's name on the income affidavits.
Succession Rights
Following the Court of Appeals decision in Braschi v Stahl Associates, 74 AD2d 201 (1st Dept 1980), the DHCR promulgated succession regulations applicable to various types of State regulated housing, including the Mitchell-Lama developments. The regulations applicable to Mrs. Greichel's application are contained in 9 ( C ) NYCRR 1727-8.3 (a) , which provides, in relevant part, that " if the tenant has permanently vacated the housing accommodation, any member of such tenant's family, who has resided with the tenant in the housing accommodation as a primary residence for a period of not less than two years, has been listed on the income affidavit and/or Notice of Change to Tenant's Family as required under section 1727-3.6 of this Part, may request to be named as a tenant on the lease "
The DHCR's sole basis for denying Mrs. Greichel's application is the absence of her name from Mr. Greichel's income affidavits for 2000 and 2001, which DHCR alleges is a condition precedent to Mrs. Greichel's application for succession. This Court disagrees. The purpose of section 1727-3.6, which governs the filing of income affidavits, is to ensure that the tenants residing in the development are moderate income individuals and families. Compliance with this filing is critical towards ensuring that the development is achieving its goal of providing affordable housing to the population for whom it was built. Why a tenant would not list all the members of his household on the affidavit is an inquiry with varied possibilities: perhaps the tenant is deliberately shielding additional income to avoid the surcharge; perhaps the tenant is unaware of another course of income, however small the amount; or perhaps a tenant may have missed reading that part of the "Occupants' Annual Affidavit of Family Income" form, that instructs, in 9 point font size, "List all members of household currently residing in apartment regardless of earning status " [sic]. The reasons for the omission are irrelevant conjecture. But while the Court is concerned by the fact that Mrs. Greichel was not listed as an occupant on Mr. Greichel's income affidavits, the DHCR has failed to establish that its absence alone is dispositive on the issue of residency for succession purposes. What is dispositive is whether the applicant can make a showing, under the totality of circumstances, that she lived with the deceased tenant as a family unit for the relevant period (see e.g. Greene Avenue Associates v Reape, 182 Misc 2d 379 [Civ Ct 1999]). Absence from the income certificate or notice of change form should provide some proof as to the residency issue, but ought to be considered together with other factors, as provided in 9 ( C ) NYCRR 1727-8.2 (a), which provides that "proof of such residency shall be the listing of such person on the annual income affidavit and/or the Notice of Change to Tenant's Family as set forth in section 1727-3.6 of this Part, together with other evidence such as certified copies of tax returns, voting records, motor vehicle registration and driver's license, school registration, bank accounts, employment records, insurance policies, and/or other pertinent documentation or facts" (emphasis added).
The cases cited by the DHCR involve factually different scenarios, such as the [*3]applicability of federal regulations to Section 8 housing (see Evans v Franco, 93 NY2d 823 [1999]), or applicants who cannot prove family membership (see Gee v DHCR, 276 AD2d 444 [1st Dept 2000]), or applicants without sufficient documentation to prove residency (see Johnson v DHCR, 213 AD2d 345 [1st Dept 1995]). None of those cases clearly support the extreme proposition expounded by DHCR that the absence of an applicant's name from the income affidavits alone renders succession an impossibility.
Evidence Presented
In support of her proof of residency in the subject apartment, Mrs. Greichel submitted her marriage certificate dated June 26, 2000; federal and state income tax returns for the years 2000, 2001 and 2002; her driver's license issued July 24, 2002; the Social Security Administration's statement of estimated benefits dated July 28, 2003; the Bell Atlantic Company's telephone bills issued to Mrs. Greichel dated February 28, 2000; a statement from Apple Bank verifying Mr. and Mrs. Greichel's joint checking account opened on October 20, 1999; and Mr. Greichel's death certificate. All of these documents identify the subject apartment as Mrs. Greichel's address.
In reviewing an administrative determination, the Court must determine if the agency's determination had a rational basis, or if it was arbitrary and capricious (CPLR 7803; Matter of Pell v Board of Education, 34 NY2d 222 [1974]). DHCR's failure to consider the documentary evidence submitted by Mrs. Greichel in rendering its denial was arbitrary and capricious. DHCR's failure to conduct a hearing for Mrs. Greichel to produce witnesses attesting to her residency was arbitrary and capricious. DHCR's denial based on a record that was devoid of any evidence from Trump Village, including the absence of Mr. Greichel's actual income affidavits, lacks a rational basis.
Conclusion
Accordingly, it is
Ordered that the petition is granted to the extent that the DHCR Order Denying Appeal is vacated; and it is further
Ordered this matter is remanded to the DHCR to conduct a full evidentiary hearing to determine, based on the totality of the evidence presented, whether or not Mrs. Greichel resided in the subject apartment for the applicable period to qualify for succession rights; and it is further
Ordered that DHCR's cross-motion to dismiss the petition is denied.
This reflects the decision and order of this Court.
Date: ________________________________________________
J.S.C.
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