BSA overturned on Queens vested rights case

Buildings made initial error in not issuing building permit. In 2003, Hamida Realty sought plan approval from the Department of Buildings for two, three-family homes on two adjacent lots that would share a foundation and a common wall. Buildings approved the plans, but Hamida waited over a year to apply for permits. When it applied, Buildings granted the permit for one building, but held the second permit, erroneously requiring Hamida to submit a site safety plan for the second building. Despite holding only one permit, Hamida started work on both buildings. Three weeks later, Hamida pointed out Buildings’ error and Buildings waived the requirement. Hamida, however, never finalized the second permit, and work continued illegally.

A month later, City Council down-zoned Hamida’s lots as part of a larger rezoning of Jamaica Hills, Queens, making both buildings non-conforming. Despite the downzoning, construction continued. Buildings then issued a permit for the second building despite the down-zoning. Four months after the down-zoning, Buildings issued a stop-work order on both buildings.

Hamida appealed to BSA, arguing that, with both buildings over 85 percent constructed, it had a common law vested right to complete construction. Hamida claimed that since the structures were substantially the same, Buildings’ error in not issuing the second permit at the start of the process was arbitrary, and BSA should treat the permits as if Buildings issued both on the same date.

BSA denied Hamida’s request in part, allowing work to continue only on the building with a valid permit. Ruling that a valid permit was a fundamental requirement of vesting, BSA emphasized that Hamida could have brought the error to Buildings’ attention immediately. Instead, it waited, failed to file for a final permit once Buildings waived the error, and continued work without a permit. 3 CityLand 155 (Nov. 15, 2006).

Hamida filed an article 78 petition, arguing that BSA’s decision should be given no deference because interpretations of the common law should be left to the courts. It further argued that its rights had vested since it had incurred substantial costs, construction was 85 percent complete, and the second permit should be considered valid from the day Buildings made the clerical error.

Justice Joseph P. Dorsa agreed and ordered Buildings to issue the second permit effective the same date as the first building’s permit. Justice Dorsa found that without Buildings original error, Hamida would have held a valid permit and the work would have vested.

Zara Realty Holding Corp. v. Srinivasan, 2007 N.Y. Slip Op. 50969(U) (Qns.Cty.Sup.Ct. May 2, 2007) (Dorsa, J.).

CITYLAND Comment: Before the final decision on the article 78 petition, Hamida sold the buildings to Zara Realty Holding Corp.

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