IN RE: 245 SULLIVAN AVE (2026)

DECISION & ORDER

In a proceeding pursuant to CPLR article 78 to review a determination of a Deputy Commissioner of the New York State Division of Housing and Community Renewal dated June 27, 2023, which denied a petition for administrative review and affirmed a determination of a Rent Administrator dated December 9, 2022, denying the petitioner's application for an exemption from rent stabilization based upon substantial rehabilitation of an apartment building, the petitioner appeals from a judgment of the Supreme Court, Kings County (Richard Velasquez, J.), dated October 8, 2024. The judgment denied the petition and, in effect, dismissed the proceeding.

ORDERED that the judgment is affirmed, with costs.

The petitioner is the owner of an apartment building located in Brooklyn. The petitioner submitted an application to the New York State Division of Housing and Community Renewal (hereinafter DHCR) seeking an exemption from rent stabilization on the ground that the building had been substantially rehabilitated. In a determination dated December 9, 2022, a Rent Administrator of DHCR denied the petitioner's application. Thereafter, the petitioner filed a petition for administrative review of the Rent Administrator's determination. In a determination dated June 27, 2023, a Deputy Commissioner of DHCR affirmed the determination of the Rent Administrator and denied the petitioner's application. Thereafter, the petitioner commenced this proceeding pursuant to CPLR article 78 to review the Deputy Commissioner's determination. In a judgment dated October 8, 2024, the Supreme Court denied the petition and, in effect, dismissed the proceeding. The petitioner appeals.

“ ‘Judicial review of an administrative determination is generally limited to whether the determination was made in violation of lawful procedure, was affected by an error of law, or was arbitrary and capricious or an abuse of discretion’ ” (Matter of East Riv. Group, LLC v New York State Div. of Hous. & Community Renewal, 244 AD3d 851, 852, quoting Matter of Teore v State of New York Div. of Hous. & Community Renewal, 234 AD3d 860, 861; see CPLR 7803[3]). An action is arbitrary and capricious when it is taken without sound basis in reason or regard to the facts (see Matter of 88–05 171, LLC v New York State Div. of Hous. & Community Renewal, 230 AD3d 679, 680; Matter of CHT Place, LLC v New York State Div. of Hous. & Community Renewal, 219 AD3d 486, 487). If the court finds that the determination is supported by a rational basis, it must sustain the determination even if the court concludes that it would have reached a different result than the one reached by the agency (see Matter of East Riv. Group, LLC v New York State Div. of Hous. & Community Renewal, 244 AD3d at 852). Moreover, an agency's interpretation of the statutes and regulations that it administers is entitled to deference and must be upheld if reasonable (see Matter of CHT Place, LLC v New York State Div. of Hous. & Community Renewal, 219 AD3d at 488; Matter of Ellis v Division of Hous. & Community Renewal of State of N.Y., 45 AD3d 594, 595).

Here, contrary to the petitioner's contention, DHCR's determination that the subject building had not been substantially rehabilitated within the meaning of Rent Stabilization Code (9 NYCRR) § 2520.11(e) and DHCR Operational Bulletin No. 95–2 was rationally based on the record and not arbitrary and capricious (see Matter of 139 Devoe Mgt., LLC v New York State Div. of Hous. & Community Renewal, 250 AD3d 917; Matter of Pavia v New York State Div. of Hous. & Community Renewal, 22 AD3d 393; cf. Matter of Clark v New York State Div. of Hous. & Community Renewal, 193 AD3d 726, 727).

Contrary to the petitioner's further contention, DHCR did not improperly deviate from its precedent (see Matter of LL 410 E. 78th St. LLC v Division of Hous. & Community Renewal, 44 NY3d 232, 241–242; Matter of Sydney Leasing, L.P. v New York State Div. of Hous. & Community Renewal, 185 AD3d 942, 944).

Finally, the record demonstrates that the petitioner was afforded an “ ‘opportunity to be heard in a meaningful manner at a meaningful time’ ” required as a matter of due process (Portofino Realty Corp v New York State Div. of Hous. & Community Renewal, 193 AD3d 773, 777, quoting Matter of Kaur v New York State Urban Dev. Corp., 15 NY3d 235, 260; see Matter of RSL 53–55 E. 95th LLC v New York State Div. of Hous. & Community Renewal, 137 AD3d 572, 573).

BRATHWAITE NELSON, J.P., WOOTEN, LOVE and MCCORMACK, JJ., concur.