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Ask Sam: My building went co-op, but it's all still rentals. Should we be rent stabilized?

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Dear Sam:  I'm a renter in a building that converted to a co-op years before I moved in. However, the building is for all intents and purposes a rental, as the sponsor just rents out all the apartments instead of selling them. Is there any chance we could be rent-regulated? 

If your building has been functioning as a rental building for years, then it should be subject to the laws and regulations that come along with it, says Sam Himmelstein, a lawyer who represents residential and commercial tenants and tenant associations. On top of that, your landlord may well have taken the building co-op to quietly take it out of rent-stabilization.

"When a building goes co-op or condo and a rent-stabilized tenant moves out, it’s instantly de-regulated," Himmelstein explains. As such, these kinds of conversions have been a popular method for building owners hoping to skirt stabilization, particularly in the 80s and 90s, before there were more available options for taking an apartment market-rate.

Unsurprisingly, both the Attorney General and the DHCR have taken a stance against this, arguing that buildings being rented out on a for-profit basis should be subject to stabilization just like any other rental building. "A co-op is supposed to function as a co-op, meaning that apartments are made available for purchase, those purchases are actually taking place, and individuals own apartments in the building," adds Himmelstein's colleague Bill Gribben. When none of that is happening, the law favors returning the building to rental status (and rent regulation along with it).

One thing to note: the cases that tend to be successful on this front are in buildings that haven't had an apartment purchased in years (often a decade or more). "It has to be a prolonged period of time," says  Kevin McConnell, another attorney at the firm.

 If you suspect this is the case with your building, you've got a few options. The first is to file with the DCHR for what's known as an Administrative Determination, asking them to determine the status of your building and whether it should be rent-stabilized. You could also hire an attorney to bring a case against your building to dissolve the co-op, and take the case either to the Attorney General or the State Supreme Court. 


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Sam Himmelstein, Esq., represents NYC tenants and tenant associations in disputes over evictions, rent increases, rental conversions, rent stabilization law, lease buyouts and many other issues. He is a partner at Himmelstein, McConnell, Gribben, Donoghue & Joseph in Manhattan.  To submit a question for this column, click here. To ask about a legal consultation, email Sam or call (212) 349-3000.

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