Richard Ntiru et al. v. WV Preservation Partners, LLC, et al.
Attorneys and Parties
Brief Summary
Mitchell-Lama housing conversion and eligibility for the insider purchase price under an Affordability Plan, including whether a tenant’s family member qualifies as a Bona Fide Mitchell-Lama Tenant (BFMLT) via succession under 9 NYCRR subpart 1727-8 [regulation granting qualifying family members the right to be named on the lease/stock where they lived with the tenant as their primary residence for the requisite period immediately prior to the tenant’s permanent vacatur].
The Supreme Court granted defendants’ motion for summary judgment and dismissed the complaint.
The grant of summary judgment to defendants was reversed and the motion was denied.
Defendants failed to make a prima facie showing that plaintiff Marion Ntiru was not a BFMLT entitled to the insider price. The record contained material factual disputes—especially conflicting statements by defendants about whether named tenant Richard Ntiru had permanently vacated as of the Affordability Plan Effective Date—and defendants’ argument that Marion was ineligible absent a formal succession application was rejected because the plan required only that she 'would qualify' for succession.
Background
The building was developed under the Mitchell-Lama program. Under a July 17, 2018 Affordability Plan, the sponsor proposed withdrawing from Mitchell-Lama and partially converting to a cooperative, offering existing tenants an insider purchase price if they were bona fide Mitchell-Lama tenants in occupancy pursuant to a 'New Lease' when the Attorney General accepted the offering plan. The plan defined a BFMLT to include the named tenant in continuous primary-residence occupancy for the prior 12 months as of the plan’s effective date (July 31, 2018), or certain immediate family members who resided with the named tenant as their primary residence and then continuously occupied the unit and would qualify for succession under DHCR (Division of Housing and Community Renewal) regulations. The sponsor was to provide each BFMLT with a replacement 'New Lease' on or after the effective date. Richard Ntiru was the named tenant; his daughter, Marion, lived in the apartment. After defendants rejected their attempt to purchase at the insider price, plaintiffs sued for a declaration that Richard or Marion could purchase at the insider price and for mandatory relief to consummate the purchase.
Lower Court Decision
The Supreme Court granted defendants summary judgment, dismissing the complaint on the ground that neither Richard nor Marion qualified as BFMLTs entitled to the insider price.
Appellate Division Reversal
Reversing on the law, the Appellate Division held defendants did not establish entitlement to judgment as a matter of law. The court noted that the trial court had discretion regarding statements of material fact under 22 NYCRR 202.8-g(c) [rule permitting trial courts to deem uncontroverted statements of material fact admitted on summary judgment but applied with discretion], and properly declined to deem defendants’ assertions admitted. On the merits, defendants failed to prove that Richard remained in occupancy as of the effective date, that Marion lacked continuous primary-residence occupancy, or that she would not qualify for succession under 9 NYCRR subpart 1727-8. Defendants’ own moving papers contained conflicting statements about whether Richard had vacated and was living in Uganda as of the effective date, creating triable issues. Further, Marion was not required to have filed a formal DHCR succession application because the Affordability Plan required only that she 'would qualify' for succession as of the effective date.
Legal Significance
The decision underscores that, in Mitchell-Lama conversions, sponsors bear the prima facie burden on summary judgment to negate BFMLT eligibility and insider-price entitlement. It clarifies that an Affordability Plan’s 'would qualify' succession standard can be satisfied without a formal DHCR application, and that factual disputes about vacatur and primary residence—especially where the sponsor’s submissions conflict—preclude summary judgment. It also confirms trial court discretion in applying 22 NYCRR 202.8-g(c).
In Mitchell-Lama-to-cooperative conversions, insider-price eligibility tied to BFMLT status and succession often turns on fact-intensive questions of vacatur and continuous primary residence; sponsors cannot prevail on summary judgment where their own proofs conflict or where the plan requires only that a family member 'would qualify' for succession rather than having formally applied.