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Bryant Avenue Tenants' Assoc. v. Ed Koch

Postby TenantNet » Fri Jun 30, 2006 7:12 am

Bryant Avenue Tenants' Association et al., Appellants, v. Edward I. Koch, as Mayor of the City of New York, et al., Respondents. (And Five Related Actions.)

No. 202

COURT OF APPEALS OF NEW YORK

84 N.Y.2d 960; 644 N.E.2d 1381; 620 N.Y.S.2d 825; 1994 N.Y. LEXIS 4123


October 25, 1994, Argued
December 8, 1994, Decided

PRIOR HISTORY:

Appeal, by permission of the Appellate Division of the Supreme Court in the First Judicial Department, from an order of that Court, entered September 28, 1993, which (1) reversed, on the law and facts to the extent appealed from, orders of the Supreme Court (Elliott Wilk, J.), entered in New York County, inter alia, granting a motion by plaintiffs for a preliminary injunction enjoining defendant 69 Tiemann Owner's Corp. from collecting rent increases attributable to major capital improvements in excess of 6% per year, and denying motions by defendants Hyde Park Associates and Regent's Park Associates to vacate or modify preliminary injunctions previously entered which enjoined them from attempting to collect rent increases attributable to major capital improvements in excess of 6% per year and from merging such rent increases into the permanent rent base, (2) denied the motion by plaintiffs, and (3) granted the motions by defendants. The following question was certified by the Appellate Division: "Was the order of this Court, which reversed the order of the Supreme Court, properly made?"

Bryant Ave. Tenants' Assn. v Koch, 196 AD2d 766, modified.

DISPOSITION: Order modified, without costs, in accordance with the memorandum herein and, as so modified, affirmed. Certified question answered in the negative.

HEADNOTES: Landlord and Tenant - Rent Regulation - Major Capital Improvements - Temporary Retroactive Rent Increases A regulation (9 NYCRR 2522.4 [a] [8]) which permits the collection of temporary retroactive rent increases of up to 6% annually in addition to collection of prospective, permanent rent increases of up to 6% annually for major capital improvements (MCI), thereby authorizing landlords to recoup arrears accumulated during the period of administrative delay which occurs in the processing of applications for MCI rent increases, violates Rent Stabilization Law (Administrative Code of City of NY) § 26-511 (c) (6) because it permits the collection of an aggregate increase in rent in excess of 6% in a single year. Section 26-511 (c) (6) unequivocally places a ceiling on the total increased rental amount that may be collected in a given year, spreading the excess forward, thereby protecting tenants from precipitous rent increases; however, the regulation, by permitting greater collections, violates a primary purpose of the Rent Stabilization Law, i.e., tenant protection. Moreover, the regulation leaves little scope to the statutory directive that collection of any "dollar excess" over 6% is to be spread forward.

Landlord and Tenant - Rent Regulation - Major Capital Improvements - Temporary Retroactive Rent Increases The merger of rent increases attributable to major capital improvements into the base rent of rent-stabilized tenants pursuant to the Rent Stabilization Code (9 NYCRR 2522.4 [a] [8]), and any resulting compounding effect caused by the application of rent guideline increases to the increased base rent are proper under Rent Stabilization Law (Administrative Code of City of NY) § 26-511 (c) and Matter of Ansonia Residents Assn. v New York State Div. of Hous. & Community Renewal (75 NY2d 206). The practice of merging the increase into the base rent was implicitly condoned by Ansonia and is consistent with the intent of the Rent Stabilization Law because it provides owners with an incentive to make improvements by assuring them an adequate return on their investment, including recovery of additional expenses likely to be incurred in maintaining such improvements.

COUNSEL: Andrew Scherer, for appellants.

Iris J. Korman, for respondent DHCR.

Joseph L. Forstadt, for respondents RSA and Katz.

Marcia P. Hirsch, for respondent Hyde Park Associates.

JUDGES: Chief Judge Kaye and Judges Simons, Titone, Bellacosa, Smith, Levine and Ciparick concur in memorandum.

OPINION: [*962] [**1382] [***826] MEMORANDUM:

The order of the Appellate Division should be modified, without costs, in accordance with this memorandum, and, as so modified, affirmed. The certified question should be answered in the negative.

The Division of Housing and Community Renewal's (DHCR) Rent Stabilization Code (9 NYCRR 2522.4 [a] [8]) permits the collection of temporary retroactive rent increases of up to 6% annually in addition to collection of prospective, permanent rent increases of up to 6% annually for major capital improvements (MCIs). This regulation authorizes landlords to recoup arrears accumulated during the period of administrative delay which occurs in the processing of applications for MCI rent increases, from the filing of the landlord's MCI application until the issuance of the order granting the permanent MCI increase. However, because the regulation permits the collection of an aggregate increase in rent in excess of 6% in a single year, we now hold that it violates Rent Stabilization Law (Administrative Code of City of NY) § 26-511 (c) (6).

[*963] Section 26-511 (c) (6) is clear on its face: "[t]he collection of any increase in the stabilized rent for any apartment ... shall not exceed six percent in any year ... with collectability of any dollar excess above said sum to be spread forward in similar increments." Thus the statute unequivocally places a ceiling on the total increased rental amount that may be collected in a given year--spreading the excess forward, thereby protecting tenants from precipitous rent increases. DHCR's regulatory scheme permits collection of up to a 12% increase in a single year, thus exceeding the statutory ceiling. The regulation would thereby violate one of the primary purposes of the Rent Stabilization Law "to protect tenants from eviction as a result of rapidly spiraling rent increases" ( Matter of Ansonia Residents Assn. v New York State Div. of Hous. & Community Renewal, 75 NY2d 206, 216). Moreover, the regulation leaves little, if any, scope to the statutory directive that collection of any "dollar excess" over 6% is to be spread forward (Rent Stabilization Law § 26-511 [c] [6]). Consequently, the regulation cannot be upheld.

In contrast, the merger of MCI rent increases into the base rent of stabilized tenants pursuant to the Rent Stabilization Code (9 NYCRR 2522.4 [a] [8]), and any resulting compounding effect caused by the application of rent guideline increases to the increased base rent, is proper under Rent Stabilization Law § 26-511 (c) and this Court's decision in Matter of Ansonia Residents Assn. v New York State Div. of Hous. & Community Renewal (supra). The practice of merging the increase into the base rent was implicitly condoned by Ansonia and is, in any event, consistent with the intent of the Rent Stabilization Law because it provides owners with an incentive to make improvements by assuring them an adequate return on their investment including recovery of additional expenses likely to be incurred in maintaining such improvements.

Chief Judge Kaye and Judges Simons, Titone, Bellacosa, Smith, Levine and Ciparick concur in memorandum.

Order modified, etc.
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Postby TenantNet » Fri Jun 30, 2006 7:22 am

Bryant Avenue Tenants' Association et al., Respondents, v. Edward I. Koch, as Mayor of the City of New York, et al., Appellants, New York City Rent Stabilization Association, Respondent, et al., Defendants

[NO NUMBER IN ORIGINAL]

Court of Appeals of New York

71 N.Y.2d 856; 522 N.E.2d 1041; 527 N.Y.S.2d 743; 1988 N.Y. LEXIS 193


February 9, 1988, Argued
March 24, 1988, Decided

PRIOR HISTORY: [***1]

Appeals, by permission of the Appellate Division of the Supreme Court in the First Judicial Department, from an order of that court, entered February 9, 1987, which affirmed (1) an order of the Supreme Court (Bruce McM. Wright, J.), entered in New York County, inter alia, joining J.F.I.B. Realty and Lydia Delgado as parties defendants, preventing landlord defendants from collecting major capital improvement rent increases and granting a preliminary injunction against landlord defendants, (2) an order of that Supreme Court (Elliott Wilk, J.), inter alia, denying the motions by defendants the New York City Conciliation and Appeals Board, the Rent Stabilization Association of New York City, and its chairman, to dismiss plaintiffs' complaint for failure to state a cause of action, except insofar as claims for monetary damages against the municipal defendants were dismissed, granting plaintiffs' cross motion for a preliminary injunction against the municipal defendants, and holding the remaining motions for summary judgment in abeyance, and (3) an order of that Supreme Court (Bruce McM. Wright, J.), granting plaintiffs' motion for class action certification. The following question [***2] was certified by the Appellate Division: "Were the orders of the Supreme Court, as affirmed by this Court, properly made?"

Plaintiffs, as low-income, rent-stabilized tenants whose landlords were granted approval for annual base rent increases, payable permanently, in conjunction with financing for major capital improvements under article VIII-A of the Private Housing Finance Law, commenced this action for a declaratory judgment to challenge the validity of section 41 of the Code of the Rent Stabilization Association of New York City, Inc., which provided for rent adjustment by dividing the cash cost of a capital improvement over a 60-month period of amortization, as violative of section YY51-6.0 (c) (6) of the Rent Stabilization Law (Administrative Code of City of New York).

Bryant Ave. Tenants' Assn. v Koch, 127 AD2d 470, affirmed.

DISPOSITION: Order affirmed, etc.

HEADNOTES:
Landlord and Tenant -- Rent Regulation

In an action by low-income, rent-stabilized tenants whose landlords were granted annual base rent increases, payable permanently, in conjunction with financing for major capital improvements under article VIII-A of the Private Housing Finance Law, for a declaratory [***3] judgment challenging the validity of section 41 of the Code of the Rent Stabilization Association of New York City, Inc., an order of the Appellate Division, which affirmed orders, inter alia, denying motions to dismiss the complaint for failure to state a cause of action, granting a preliminary injunction, joining certain entities as parties defendant and granting plaintiffs' motion for class action certification, should be affirmed. The complaint sufficiently states a cause of action under the Civil Rights Act (42 USC § 1983), and the claims were timely asserted. The lower courts properly rejected defendants' argument that the claims arising under the Rent Stabilization Law and the Private Housing Finance Law should be litigated in an article 78 proceeding, since an article 78 proceeding is not the appropriate remedy to attack the validity of the Rent Stabilization Code, a quasi-legislative enactment. Further, there was no abuse of discretion in joining certain parties defendants or in granting class action certification.

COUNSEL: Peter L. Zimroth, Corporation Counsel (Elizabeth I. Freedman and Francis F. Caputo of counsel), for Edward [***4] I. Koch, as Mayor of the City of New York and others, appellants.

Iris J. Korman and Dennis Hasher for Division of Housing and Community Renewal and others, appellants.

Jonathan J. Silbermann and Steven DiJoseph for J.F.I.B. Realty Corp. and another, appellants.

Andrew Scherer, Scott A. Rosenberg and John E. Kirklin for plaintiffs-respondents.

New York City Rent Stabilization Association, respondent, precluded.

Andrea T. Novick and Michael R. Finder for Franz S. Leichter and others, amici curiae.

JUDGES: Chief Judge Wachtler and Judges Simons, Kaye, Alexander, Hancock, Jr., Bellacosa and Dillon * concur in memorandum.



* Designated pursuant to NY Constitution, article VI, § 2.

OPINION: [*858] [**744] OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be affirmed, with costs, and the certified question answered in the affirmative.

The motions of defendants to dismiss the complaint for failure to state a cause of action ( CPLR 3211 [a] [7]) were properly denied. The courts below correctly concluded that the complaint sufficiently pleads a cause of action under the Civil Rights Act (42 USC § 1983). [***5] Because the action was brought within the three-year limitations period of CPLR 214 (5), the claims under section 1983 are timely asserted (423 S. Salina St. v City of Syracuse, 68 NY2d 474, 480).

The courts below also properly rejected defendants' argument that the claims arising under the Rent Stabilization Law and the Private Housing Finance Law should be litigated in an article 78 proceeding [**745] and are thus barred by the four-month period of limitations under CPLR 217. An article 78 proceeding is not the appropriate remedy to attack the validity of the Rent Stabilization Code, which is a quasi-legislative enactment ( Matter of Lakeland Water Dist. v Onondaga County Water Auth., 24 NY2d 400, 408). Plaintiffs maintain that this cause of action is governed by the three-year period of limitations in CPLR 214 (2). We need not decide whether CPLR (2) or 213 (1) applies because the action is timely in either event.

Further, we agree that Supreme Court did not abuse its discretion in ordering the joinder of Lydia Delgado, also known as Katherine Wender, and J.F.I.B. Realty Corp. as parties defendant ( CPLR 1002 [b]). [***6] To the extent that their opposition to the motion was premised on Statute of Limitations grounds, the record fails to support their claim that the action was not commenced against them within three years of its accrual.

[*859] Finally, without detracting from the well-founded rule that where governmental operations are involved, class action relief is ordinarily inappropriate (see, Matter of Martin v Levine, 39 NY2d 72, 75; Matter of Jones v Berman, 37 NY2d 42, 57), we cannot say, in the circumstances presented, that it was an abuse of discretion as a matter of law to permit this class action to proceed against the governmental defendants. If plaintiffs succeed in procuring retroactive awards, the continued presence of these defendants in the action may aid in implementing that relief.
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Postby TenantNet » Fri Jun 30, 2006 7:23 am

Bryant Avenue Tenants' Association, et al., Plaintiff-Respondents, v. Edward I. Koch, etc., et al., Defendants-Appellants. [And Five Related Actions]

47423-47424-47425N

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, FIRST DEPARTMENT

196 A.D.2d 766; 602 N.Y.S.2d 345; 1993 N.Y. App. Div. LEXIS 8797


September 28, 1993, Decided
September 28, 1993, Entered

JUDGES: [***1] Murphy, P.J., Sullivan, Wallach, Asch, Rubin, JJ.

OPINION: [**345] [*766] Orders of the Supreme Court, New York County (Elliott Wilk, J.), entered July 9, 1991, which, inter alia, granted a preliminary injunction enjoining defendant 69 Tiemann's Owner's Corp. from collecting rent increases attributable to Major Capital Improvements in excess of 6% per year and denied motions by defendants Hyde Park Associates and Regents Park Associates to vacate or modify preliminary injunctions previously entered which enjoined them from attempting to collect rent increases attributable to MCIs in excess of 6% per year and from merging MCI rent [**346] increases into the permanent rent base, are reversed, on the law and facts to the extent appealed from, the motion by plaintiffs denied and the motions by defendants granted, without costs or disbursements.

We recognize, as does the dissent, that the award of MCI rent increases which are merged into the stabilized base rent has been upheld by this Court and the Court of Appeals. Thus, we have previously noted, "The question of whether an MCI increase becomes a permanent part of the stabilized base rent has just been determined in the landlord's [***2] favor in Matter of Ansonia Residents Assn. v. New York State Div. of Hous. & Community Renewal (75 NY2d 206, 551 N.E.2d 72, 551 N.Y.S.2d 871)." ( Matter of Ansonia Assocs. v. State Div. of Housing & Community Renewal, 157 AD2d 583, 584).

However, unlike the dissent, we do not find any violation of the Rent Stabilization Law in the award of temporary retroactive rent increases of 6% annually in addition to the prospective MCI increases. As recognized by the dissent, applications by landlords for rent increases based on Major Capital Improvements can take the agency as long as three years to process and approve. It would not only be unfair but would also act against the purposes of the Rent Stabilization Law to disallow earned increases during these periods. Such a policy, in the face of the long delays inherent in this government bureaucracy, would encourage a disinclination by landlords to expend any large sums of money in improving properties.

[*767] Further, the law prohibits increases in excess of 6% per year. However, MCI increases are effective as of the first rent payment occurring 30 days after the filing of the application by the landlord. Thus, the agency, in awarding [***3] temporary retroactive rent increases, is simply allocating, albeit some time in the future, a 6% increase for that period of time immediately after the application, and the tenant, therefore, does not pay in excess of 6% per year.

The Legislature is certainly aware of this practice of the agency in awarding temporary retroactive rent increases, and has not made any changes in the law expressly forbidding such practice. This action of the legislative authority, in not "choosing to amend the statute to provide otherwise, has acquiesced in this construction" ( Matter of Ansonia Residents Assn. v. New York State Div. of Housing & Community Renewal, 75 NY2d 206, 215).



All concur except Wallach and Rubin, JJ. who dissent in a memorandum by Wallach, J. as follows:




DISSENTBY: WALLACH

DISSENT: WALLACH, J. (dissenting)

Under the New York City Rent Stabilization Law ("RSL", Chapter 4 of Title 26, New York City Administrative Code), rent adjustments are established on an area-wide basis by a Rent Guidelines Board ("RGB"), based upon economic conditions, cost of living indices and other factors in the neighborhood in question (§ 26-510). The law further provides for rent increases [***4] on a building-wide basis, to compensate a landlord for major capital improvement ("MCI") expenditures, where appropriate application is filed with the Division of Housing and Community Renewal ("DHCR"), in accordance with that agency's regulatory procedures (§ 26-511; see, DHCR's Rent Stabilization Code, 9 NYCRR § 2522.4[a]).

The RSL permits the DHCR Commissioner to consider landlord applications for "increases in excess of the level of fair rent increase established under this law" (§ 26-51l[c][6]). Collection of any such increase from tenants is to be spread forward in annual increments, but not to exceed 6% of the legal regulated rent in any one year. The regulation (9 NYCRR § 2522.4[a][8]) speaks in terms of adding this annual increment to the legal regulated rent as a "permanent, prospective rent increase". An additional increment of up to 6% may be exacted for any "temporary retroactive portion of such rent increase." The temporary retroactive increase is designed for the landlord's recoupment of arrears [**347] during the period of delay from filing of his MCI application until the issuance of an order by the Commissioner.

[*768] Among the defendants herein [***5] are landlords who sought to collect MCI rent increases amounting to a maximum 6% permanent increase in the legally regulated rent level each year until their costs of the improvements were fully amortized, plus a temporary increase of no more than 6% per year to amortize arrears during the period of agency delay in processing the applications. Plaintiffs, who are affected tenants and tenants' associations, have challenged the regulatory procedure whereby computation of MCI rent increases results in an annual rent increase exceeding the RGB's annually established guidelines for rent adjustments. They further argue that the agency policy of allowing MCI increases to be merged into the permanent rent base means that a maximum 6% increase for the spillover the following year would result in a compounding effect that would actually raise the following year's rent increase to more than a simple 6%. Finally, plaintiffs object to the regulations which allow separate 6% increases for permanent prospective and temporary retroactive recoupments in the same year, arguing that such a double increase is nowhere authorized under the RSL.

The IAS court agreed, and issued preliminary injunctions [***6] against implementation of such procedures. I would modify that ruling, with regard to the permanent, prospective increase, on the ground that the law on this issue has already been settled in this court and in the Court of Appeals.

In Matter of Ansonia Residents Assn. v. New York State Div. of Hous. & Community Renewal (75 NY2d 206, 216), the Court of Appeals upheld the permanence of the MCI-based rent increase because



a rent increase on the basis of a major capital improvement does not represent payment of a finite debt which the tenant owes to the owner, but rather is payment for a service which the tenant continues to receive after the owner has recouped the initial cost of the improvement.




Rather than simply compensating an owner for his investment outlay, § 26-511(c) was designed to create an incentive for such major capital improvements by assuring the owner an adequate return on his investment, to include the continuing expense of maintaining such improvements after recoupment of initial construction costs (id.; Matter of Versailles Realty Co. v. New York State Div. of Hous. & Community Renewal, 76 NY2d 325, 329). In the wake of the Ansonia [***7] ruling, this court has acknowledged that the "question of whether an MCI increase becomes a permanent part of the stabilized base rent has [now] been determined in the landlord's [*769] favor" ( Matter of Ansonia Assocs. v. State Div. of Hous. & Community Renewal, 157 AD2d 583, 584).

To read the statute as limiting a landlord to a 6% ceiling covering a combined MCI recovery and the unrelated rent guidelines adjustment would force the landlord to absorb the lion's share of the cost of such improvements, even though those improvements inure to the permanent benefit of tenants. The rent guidelines and MCI adjustments were established for two completely distinct purposes. Neither one contradicts, nor precludes, the other. That issue would appear no longer open to debate.

As to the issue of "compounding", the statute allows a maximum of 6% in any given year, with the balance to be "spread forward in similar [annual] increments". Does this mean a fixed amount, equal to no more than 6% of the pre-MCI rent for each year of the amortization, or does it allow for each year's 6% increment to be based upon the previous year's adjusted rent? Plaintiffs would read "similar increments" as meaning [***8] something less than 6% in subsequent years, so that the sum of two years' compounded interest would not total more than 12%, the sum of three years not more than 18%, etc. By compounding over a 3-year period, the cumulative increments of 6% each year would total 6% after one year, 12.36% after two years, and 19.1% after three years. By plaintiff's logic, each [**348] year's MCI increment should be calculated as a simple 6% of the pre-MCI rent, until the MCI amortization is satisfied. Otherwise, compounding should limit the second year increase to no more than 5.66%, and the third year to no more than 5.357%, etc.

Bearing in mind the legislative desire to create an incentive for such investment, I do not believe plaintiffs' interpretation could have been the legislative intent of "similar increments". Questions regarding the appropriate calculation of interest accrual should be resolved in light of particular industry practice ( Matter of American Sav. Bank v. Michael, 64 NY2d 397, 405). It need simply be noted that as with RGB adjustments, once any increase becomes part of the permanent rent base, any subsequent annual increase will necessarily have a compounding effect. That [***9] axiom should not invalidate the statutorily fixed ceilings of subsequent increases.

Plaintiffs' final point challenges the right of the DHCR Commissioner to authorize by regulation, in 9 NYCRR § 2522.4(a)(8), the collection of up to 6% in the form of a temporary retroactive increase for arrears, in addition to the permanent, prospective 6% annual increase called for in RSL § 26-511(c)(6). [*770] Defendants' argument is that the tenants have already begun to enjoy the benefits of the improvements, even though there might be considerable delay before the effective date of the compensatory order. Assuming no delay, rent cannot be adjusted to reflect MCI earlier than 30 days after the landlord files his application, but as a practical matter, the processing of such an application can take up to 1-3 years before an order is issued. Simple fairness, defendants argue, dictates a retroactive award, albeit "temporary" (i.e., not effecting a permanent increase in the rent base), to cover that period.

The problem is that by awarding such a "temporary" increase alongside a permanent, prospective increase, the rent is necessarily increased by an arbitrary figure of up to an additional 6% for each [***10] month of delay. Where the statute places a ceiling of 6% on MCI-based increases in a given year, this regulatory scheme could effectively double the height of that ceiling for up to three years. Unlike the earlier issues discussed, no portion of the RSL can be identified that would allow such an additional increment, albeit temporary, by regulation. The statute speaks in terms of spreading the MCI rent increase forward; it is silent on the regulation's novel device of simultaneously reaching backward to recoup arrears. Absent legislative authorization to this effect, the landlord will simply have to look to the permanent nature of his prospective increase in order to make up any losses suffered by reason of the administrative delay.

Accordingly, I would modify the IAS court order to the extent of dismissing plaintiffs' challenges to the prospective aspect of the MCI rent increase (its merging into the rent base, and its compounding of annual increases), and I would otherwise affirm the order upholding plaintiffs' challenge to the regulatory extension of a landlord's right to add to the MCI increase on a temporary basis for recoupment of arrears attributed to administrative delay.

ENTERED: [***11] September 28, 1993
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Postby TenantNet » Fri Jun 30, 2006 7:24 am

Bryant Avenue Tenants' Association et al., Plaintiffs, v. Edward I. Koch, as Mayor of the City of New York, et al., Defendants. Regent's Park Tenant's Association, Respondent; Regent's Park Associates, Appellant. Bryant Avenue Tenants' Association et al., Plaintiffs, v. Edward I. Koch, as Mayor of the City of New York, et al., Defendants. Beverly Abrams et al., Respondents; Hyde Park Associates, Appellant

[NO NUMBER IN ORIGINAL]

Supreme Court of New York, Appellate Division, First Department

131 A.D.2d 318; 516 N.Y.S.2d 211; 1987 N.Y. App. Div. LEXIS 47811

June 9, 1987

JUDGES: [***1]

Concur -- Sandler, J. P., Sullivan, Kassal and Wallach, JJ.

OPINION: [*318] [**212] Eight orders of the Supreme Court, New York County (Elliott Wilk, J.), entered September 23, 1986, which preliminarily enjoined appellant Hyde Park Associates from collecting or attempting to collect from respondents rent increases of [*319] more than 6% a year for major capital improvements, are reversed, on the law, and respondents' motions for preliminary injunctions denied without prejudice to their moving again for such relief upon obtaining jurisdiction over appellant, without costs.

Order of the Supreme Court, New York County (Elliott Wilk, J.), entered November 14, 1986, which, inter alia, preliminarily enjoined appellant Regent's Park Associates from collecting or attempting to collect from respondent's members rent increases of more than 6% a year for major capital improvements, is reversed, on the law, and respondent's motion for a preliminary injunction denied without prejudice to it moving again for such relief upon obtaining jurisdiction over appellant, without costs.

Before us are two appeals. In the first, eight orders are brought up for review granting separate motions [***2] by eight rent-stabilized tenants for a preliminary injunction against their landlord collecting, or attempting to collect by such means as eviction proceedings, rent increases of more than 6% a year awarded by the Department of Housing and Community Renewal for major capital improvements (see, Rent Stabilization Law [Administrative Code of City of New York] § YY51-6.0 [c] [6]). In the second appeal, one order is brought up for review granting a motion by a different group of rent-stabilized [**213] tenants against their own landlord for the same relief. None of the parties to these appeals are parties to the action in which the orders on appeal were entered, although the plaintiffs in the action do appear on the appeal as amici curiae.

This is a class action brought by an association of rent-stabilized tenants against their landlord and various governmental agencies and officials challenging the legality of certain rent increases granted or to be granted by the Department of Housing and Community Renewal for major capital improvements. Plaintiffs tenants were successful in obtaining a preliminary injunction against the collection of such rent increases (Wilk, [***3] J.), and shortly thereafter were also successful in having the action certified as a class action (Wright, J.). The class certification order defines two classes -- a plaintiff class consisting of all rent-stabilized tenants in New York City "whose landlords have obtained or will obtain rent increases based on major capital improvements within the past or may in the future apply for such increases", and a defendant class, consisting of all landlords of rent-stabilized housing in New York City "who have obtained rent increases based on major [*320] capital improvement within the past or who may in future [sic] apply for such increases". The class certification order also provides that notice be given within 90 days of its entry to all members of both the plaintiff and defendant classes advising them of the pendency of the class action and "of the right of class members to exclude themselves from the class action". Proposing a form of notice for the court's approval, the plaintiffs, as class representatives, simultaneously moved for an order extending the preliminary injunction previously granted to them against their landlord to all members of the plaintiff and defendant [***4] classes. This motion was opposed by the governmental defendants on the ground that their appeal from the class certification order automatically stayed implementation of that order pursuant to CPLR 5519 (a). The court (Wright, J.), in an order not in issue on this appeal, held that the appeal had that effect, and denied the motion.

The denial of this motion made by the plaintiffs for classwide relief left other landlords, not named in the action but clearly members of the defendant class, free to collect rent increases for major capital improvements from their own tenants, not named in the action but clearly members of the plaintiff class. Undaunted, these unnamed, unjoined tenants, the respondents on these appeals, took the initiative by themselves seeking the relief denied them when sought for them by the plaintiffs. They did this by separately making motions in this action for injunctive relief against their respective landlords, the appellants on these appeals. The motions were in each instance supported by an affidavit from the particular tenant seeking relief alleging rent increases in excess of what the law permits for major capital improvements. The court (Wilk, J.) [***5] granted these motions on the ground that respondents were no less entitled to injunctive relief against appellants as the named plaintiffs tenants were against the named defendant landlord.

While appellants argue that they and respondents are not similarly situated to the parties named in the action, we find it unnecessary to address that question. Notwithstanding that respondent tenants may be similarly situated to the named plaintiffs tenants and appellants landlords to the named defendant landlord, and that respondents were asking for nothing more in the way of relief against appellants than had already been granted in favor of the plaintiffs against the defendant, the relief sought should not have been granted without first having added appellants and respondents as parties to the action (see, CPLR 1003; see also, CPLR 1012-1013, [*321] 305 [a]). Such joinder was necessary because, although the action was brought as a class action, the order certifying it as [**214] such had not been implemented by the giving of notice to class members as of the time the injunctive relief under review was granted. Nonimplementation of the class certification order meant that [***6] the injunction previously issued in the action affecting the named parties could not affect the parties to these appeals or any other members of the classes defined in the class certification order.

The plaintiffs, as class representatives and amici curiae on appeal, argue that recent events have made these appeals academic. Approximately two months before these appeals were submitted, this court affirmed the class certification order as well as the order granting the injunction in favor of and against the parties named in the action. Plaintiffs argue that these affirmances settle that the injunction is to be given class-wide effect, and that since appellants and respondents are indisputably members of the classes certified, and since the automatic stay of CPLR 5519 is no longer in effect and notice to the classes may now issue, the controversy is moot. We disagree. This mootness argument does not address the provision of the class certification order giving class members the "right" to opt out. While we do not mean to prejudge the effect of this provision, and are mindful that it is not the subject of argument on these appeals, it does not appear that appellants will be [***7] required, against their will, to remain in the action as members of the defendant class. Indeed, in the motion that sought to give the preliminary injunction classwide effect, the plaintiffs, as described by the court (the record on that motion is not before us), also sought an order "binding all plaintiff and defendant class members not to "opt out" with respect to the claims to be litigated against the defendant class". Such relief, which would have apparently been in the nature of a modification of the class certification order, was also denied. Should appellants opt out, as it appears to be their right to do, they will have to be either added as parties to this action or sued in independent actions in order to obtain the jurisdiction necessary to the granting of the injunctive relief sought against them by respondents.
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