885 Park Avenue, Brooklyn. Image credit: GoogleMaps

Bedford-Stuyvesant developer converted commercial building into residential apartments. 885 Park Avenue Brooklyn LLC owned a commercial building located in the Bedford-Stuyvesant neighborhood of Brooklyn that had been used solely for commercial purposes. Beginning in 1999, 885 Park converted the building into 23 new residential units. The conversion was completed in 2003. In 2011, Daniel Goddard signed a one-year market-rate lease with 885 Park.

In 2012, Goddard’s lease expired but he did not move out, and 885 Park brought a holdover summary proceeding to eject Goddard from the apartment. Goddard argued that the building was rent-stabilized and he was protected under the Rent Stabilization Law. In response 885 Park argued that the building was exempt from the rent law due to the substantial rehabilitation between 1999 and 2003 that converted the commercial building to residential uses. The Civil Court ruled in favor of the 885 Park and awarded possession of the apartment and $10,590. Goddard appealed.

The Appellate Division, First Department, affirmed the eviction. The Rent Stabilization Law exempts buildings that were “substantially rehabilitated” as residential units after 1974. The First Department found that, beginning in 1999, the building had been converted from a purely commercial space into a residential building. The conversion from commercial to residential was a substantial rehabilitation and exempted the building from rent stabilization.

885 Park Avenue Brooklyn, LLC v. Goddard, 53 N.Y.S.3d 794 (App. Term 2nd Dep’t 2017).