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Forcing Landlord to Rebuild Rent-Controlled Building Is Taking
Description Appeals court reversed lower courtís decisions to force rent-controlled building owner in New York to rebuild building ruined by fire. Cost of rebuilding was millions more than the market value of the building once rebuilt. Forcing rebuilding to benefit citizens eligible for rent control is unconstitutional taking without compensation.
Topic Constitutional Law
Key Words Takings, Just Compensation, Rent Controls
C A S E   S U M M A R Y
Facts An apartment building in New York was left uninhabitable by a serious fire. Some apartments were owned by residents, some were subject to rent controls, and others were rented at market rates. The majority owner of the building refused to rebuild the building, contending it would cost over $4 million to make it habitable again, while the value of the building, once habitable, would be less than $2 million. Various tenants sued the landlord/owner to force reconstruction. Trial court and the first appeals court ordered the owner to rebuild the building. Owner appealed.
Decision Reversed. "Under the Takings Clause of the Fifth Amendment ..., the government may not compel a small class of people to pay for public benefits whose costs should be shared by the public as a whole." In this case, the public are citizens eligible for rent-controlled apartments. "Compelling appellants.... to spend over $4 million to create $1 million of value certainly denies the owner any reasonable return on his investment."
Citation Bernard v. Scharf, 1998 WL 345479 (1998 N.Y. Slip Op. 06555, Sup. Ct., App. Div., N.Y.)
or
675 N. Y. S. 2d 64 (Sup. Ct., App. Div., N. Y., 1998)

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