Effect of 'buyouts' on 'substantial rehab' status

[mkraft]

Under the RSL, an 80% vacancy rate in a building is interpreted as qualifying the building for 'substantial rehabilitation' status based on “a presumption that the building was substantially or seriously deteriorated.”

That finding allows all units renovated under the 'substantial rehab' to be removed from rent regulation.

It's been suggested to me that when the 80% vacancy level has been obtained largely or exclusively through 'buyouts,' the landlord can't make a valid claim to having the building qualify for 'substantial rehab' status. If that's accurate, rent regulation would be maintained in the building, irrespective of whatever renovation work the landlord did according to his 'substantial rehab' scenario.

Since I haven't seen any mention of that limitation in the RS Code sections dealing with 'substantial rehab,' does anyone know whether other relevant rent regulations and/or case law support rejection of 'substantial rehab' status when vacancies have been created through 'buyouts'?

Thanks.