Posted by: Patricia Salkin | February 5, 2019

NY Appellate Court Holds Purchaser was Required to Exhaust all Available Administrative Remedies Prior to Bringing Article 78 Proceeding Challenging Alleged Violations

This post was authored by Matthew Loeser, Esq.


Petitioner purchased the subject property, a three-story apartment building located in St. Albans, at a foreclosure sale. In January 2016, the petitioner filed a property registration form with the respondent, New York City Department of Housing Preservation and Development, sued herein as NYC Department of Housing Preservation and Development (“HPD”). In February 2016, approximately one year after the petitioner purchased the property, HPD selected the property for participation in the Alternative Enforcement Program (“AEP”), a program designed to alleviate emergency conditions in distressed buildings by compelling compliance with the requirements of the New York City Housing Maintenance Code. The petitioner commenced this proceeding pursuant to CPLR article 78, to set aside certain fines, penalties, violations, and repair assessments generated by HPD, and to compel HPD to remove the subject property from the AEP. The Supreme Court granted those branches of the petition.

On appeal , the court found that the petitioner failed to timely pursue an available administrative remedy prior to seeking judicial intervention. While the petitioner argued that some of the violations and charges predated its acquisition of title and that its entry into possession was delayed due to obstruction by the prior owner, some of the violations and charges occurred after the petitioner purchased the building. Additionally, since HPD recorded its expenses in its building charge report that was publicly available online, and since the list of open violations was also available publicly online, the petitioner was on notice of the violations and charges on the property at the time it purchased the property. The court further found that the petitioner also could have filed its registration statement with HPD when it acquired the building, instead of waiting until it obtained possession, and could have timely objected to charges imposed after it acquired the building on the basis that it did not have access to the building. As such, the court held that petitioner did not exhaust available administrative remedies and failed to establish that an exception to the exhaustion of administrative remedies rule was applicable. Accordingly, the Supreme Court’s holding was reversed.

Bennett v. Zoning Board of Appeals of Village of Sagaponack, 170 A.D.3d 716 (2 Dept. 2019)

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