Rutland Plaza Tenant Association, et al., Petitioners, v. LP (2026)

Recitation, as required by CPLR § 2219(a), of the papers considered in the review of the motions of Respondents Division of Housing Community and Renewal, Community Development of Long Island, and the New York State Housing Finance Agency to dismiss and/or for summary judgment (mot. seqs. #2-4): NYSCEF 167-226.

Upon the foregoing cited papers, the Decision/Order is as follows:

Petitioners, an unincorporated tenant association, and 44 individual tenants, commenced the instant Housing Part (HP) enforcement proceeding pursuant to § 27-2115(h)(1) of the Housing Maintenance Code (HMC) by order to show cause dated May 22, 2026. The Petition seeks "to correct hazardous conditions, restore essential services, and bring the subject premises into compliance with the Housing Maintenance Code" in the subject 438-unit rental five-building complex, a state-assisted limited profit corporation organized under Article II of the Private Housing Finance Law, often referred to as the Mitchell-Lama Law.

As is typical in HP proceedings, Petitioners sued the titled owner and the managing agent, each of which is statutorily designated as a responsible party (see HMC § 27-2004(a)(45); Dept of Hous Preserv & Dev v. Livingston, 169 Misc 2d 660 [App Term, 2d Dept, 2d &11th Jud Dists 1996]). More unorthodox was Petitioners' decision to name as owner-respondents the Division of Housing and Community Renewal ("DHCR"), the agency charged with supervising state-assisted Mitchell Lama projects, the New York State Housing Finance Agency (HFA), a public benefit corporation providing financing through tax exempt bonds, and Community Development of Long Island (CDLI), the administrator of a project-based Section 8 subsidy at the premises.

DHCR, HFA, and CDLI, (collectively Movants or Respondents) have each moved to dismiss or for summary judgment, arguing they do not fall within the definition of an owner under the HMC, and are therefore not properly sued in this HP proceeding.

The HMC authorizes the Department of Housing Preservation and Development (HPD) or a lawful occupant of a residential dwelling to commence an enforcement proceeding against any owner of a residential dwelling to obtain an order to correct conditions that constitute Code violations (see HMC § 27-2115[h][1]). Pursuant to HMC § 27-2004(a)(45), an owner includes:

"[T]he owner or owners of the freehold of the premises or lesser estate therein, a mortgagee or vendee in possession, assignee of rents, receiver, executor, trustee, lessee, agent, or any other person, firm or corporation, directly or indirectly in control of a dwelling."

In defining owner broadly, the City Council afforded lawful occupants, HPD, and the courts with the flexibility to hold accountable any responsible party, regardless of whether they are the titled owner or listed as the managing agent on the building's annual property registration. Thus, an officer, member, employee, or other stakeholder of a corporation, LLC, or partnership exercising operational control or ultimate decision-making authority with respect to building maintenance cannot escape liability merely by virtue of opaque corporate structures or an inaccurate HPD registration (see Leung v Zi Chang Realty Corp., 74 Misc 126 [App Term, 1st Dept 2022]; Dept of Hous Preserv & Dev v. Livingston, 169 Misc 2d 660 [App Term, 2d Dept, 2d &11th Jud Dists 1996]; Hous & Dev Admin v Johan Realty, 93 Misc 2d 698 [App Term, 1st Dept 1978]).

It is not difficult to conceive of other individuals whose conduct will place them within the ambit of the HMC, whose purpose is remedial in nature and should be construed as broadly as possible to achieve its purpose of preserving adequate housing (see Dept of Hous Preserv & Dev v 1515 St. Johns Place, 81 Misc 3d 140 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2024; Park-Lex Assoc v Schad, 2026 NY Slip Op 51568 [App Term, 1st Dept 2026]). For instance, a family member managing a property for an incapacitated relative, whether by power of attorney or informally, or the administrator or executor of an estate, are persons that often exercise sufficient dominion over a dwelling to be named as owner-respondents.

Conversely, in Greenpoint Bank v John, 256 AD2d 548 [2d Dept 1998], the Appellate Division held that an out of possession mortgagee in a foreclosure action is not properly classified as an owner under Multiple Dwelling Law (MDL), which like the HMC, includes any party in direct or indirect control of a dwelling (see MDL §§ 4[44]). While a mortgagee can voluntarily undertake emergency repairs upon reasonable notice to the occupants (see RPAPL 1307) or seek the appointment of a receiver to preserve their collateral (see RPAPL 1325), absent an affirmative exercise of such rights, they cannot be compelled to fulfill the owner's obligation to maintain the premises "in good repair" (MDL § 78[41]; Greenpoint Bank v John at 548).

With respect to the movants, there is no dispute that they have no ownership interest in the premises or any contractual or legal right to effectuate repairs or physical improvements. Although the Respondents engage in administrative oversight over the complex, primarily of a financial nature, to equate this regulatory function with the exercise of operational control would be to stretch the statutory definition of owner in the HMC beyond its "natural and ordinary meaning" (49 Bleeker, Inc. v Gatien, 157 AD3d 619 [1st Dept 2018]).

Nor will the court accept Petitioners' invitation to retain jurisdiction over Respondents as nominal, non-owner parties based on Civil Court Act (CCA) § 110(d), which allows the court to "join any other person or city department as a party in order to effectuate proper housing maintenance standards and to promote the public interest." The statute contemplates joinder by motion after commencement. It is not a license to name non-owner parties without leave of court.

Even assuming the failure to obtain permission to join Respondents could be overlooked in the exercise of discretion pursuant to CPLR 2001 (but see Crook v E. I. du Pont de Nemours & Co. [1996]), it is not warranted in this instance. CCA § 110(d) expressly authorizes the joinder of only "city department[s]" without reference to state entities, an omission that compels the inference that the legislature did not contemplate the joinder of state agencies such as movant DHCR (see Holder v Jacob, 231 AD3d 78 [1st Dept 2024]).¹

While HFA and CDLI are not governmental actors and therefore may plausibly fall within the definition of persons susceptible to joinder under CCA § 110(d) (see Gen Constr Law § 37), Petitioners fail to demonstrate how Respondents' presence in this lawsuit, in which they have no direct oversight over the housing conditions at issue, will effectuate housing standards or promote the public interest (cf. Dhansingh v Hager, 2026 NY Slip Op 31108 [Civ Ct, Kings County 2026] [joinder of the city-agency Department of Buildings (DOB) was appropriate in an HP seeking correction of an elevator violation issued by DOB).

Accordingly, as the movants are not owners as defined by the HMC, they were not properly named and the motions are granted. The Petition is dismissed as against DHCR, CDLI and HFA. The clerk is directed to enter judgments of dismissal.

The remaining parties are to appear on October 28, 2026, at 930am for a status conference. This is the decision and order of the court.

Dated: October 18, 2026

Brooklyn, New York

HON. LOGAN J. SCHIFF, J.H.C.

FOOTNOTES

1.   To the extent DHCR may be responsible for approving certain repairs-related expenditures at the premises, Petitioners may seek limited discovery of the relevant documentation upon a showing of ample need via subpoena, a disclosure mechanism they have already utilized (see NYSCEF 210).

Logan J. Schiff, J.