G. Hotels and Single-Room Occupancy Buildings (SROs) Hotels and Single-Room Occupancy Buildings (SROs)

• Jurisdiction: New York

G. Hotels and Single-Room Occupancy Buildings (SROs)⁶³⁰

Prior to the Omnibus Housing Act of 1983 ("OHA"), apartment rent stabilization, known simply as "Rent Stabilization," and hotel rent stabilization, known as "Hotel Stabilization," existed as parallel but similar systems, independent of one another. OHA merged the two systems, abolished the statutory authority of the trade organizations that administered them, called for one rent stabilization for both systems, and placed the administration of the new system under the New York State Division of Housing and Community Renewal.

An SRO tenancy is defined as "the occupancy by one or two persons of a single room, or of two or more rooms, which are joined together, separated from all other rooms within an apartment in a multiple dwelling, so that the occupant or occupants thereof reside separately and independently of the other occupant or occupants of the same apartment."⁶³¹ While it has been estimated that there were as many as 200,000 SRO apartments in New York City following the World War II,⁶³² this number dropped to 35,227 by 2002,⁶³³ and the construction of new SRO units has been prohibited.⁶³⁴

Despite the typically transient use made of SRO hotel units,⁶³⁵ SRO apartments constitute multiple dwellings and must be maintained in a habitable manner.⁶³⁶ While the issue had not always been free from doubt,⁶³⁷ it is now settled that stabilization protection extends to housing accommodations located in class B multiple dwellings, including hotels and single-room occupancy buildings,⁶³⁸ if various criteria are met. SRO apartments will also qualify for stabilization coverage if the rent charged was $350 or less per month or $88 or less per week as of May 31, 1968, and if occupied by a permanent tenant.⁶³⁹ The burden of proving the base date rent is on the building owners and is one that can prove difficult to meet.⁶⁴⁰ In determining whether an occupant qualifies as a permanent tenant, the relevant inquiry is not whether the occupant has paid rent to the hotel owner, or even whether a landlord-tenant relationship exists between the occupant and the owner; rather, the issue turns solely on whether the occupant has had "six months or more of continuous residence in a particular hotel building"⁶⁴¹ or has requested a lease of six months' duration or more or has been residing in the building pursuant to a lease of six months or longer.⁶⁴² However, payment of "rent," in whatever form, will establish the tenant's case.⁶⁴³ While a hotel owner may charge a market rental until permanent tenancy status attaches, the owner is limited to the legal regulated rent thereafter.⁶⁴⁴ Stabilization coverage has also been extended to a semi-enclosed cubicle in a lodging house dormitory where it was shown that the respondent's "period of occupancy [was] accompanied by sufficient indicia of 'permanency' such that the space occupied may be characterized as a home, residence or dwelling unit for rent stabilization purposes."⁶⁴⁵ Pleading status as a "permanent tenant" is sufficient to assert entitlement to Hotel Stabilization status. However, some courts have held that a person must be a legal occupant of an SRO unit, with some evidence of either an express or implied landlord-tenant relationship, to qualify as a permanent tenant.⁶⁴⁶

Of the features that distinguish statutory SRO tenants from their counterparts in rent-stabilized apartment buildings, perhaps the most prominent is that SRO tenancies are typically created by oral agreement, rather than a written rental agreement.

Although an SRO landlord is required to grant a lease at a tenant's request, the tenant is not bound to execute the lease.⁶⁴⁷ Thus, SRO tenants are able to avoid being bound by many unfavorable standard lease provisions, such as counterclaim and jury-waiver provisions. Statutory SRO tenancies are also distinguished by the fact that the rent-regulatory status attaches to the building, rather than the individual tenant, so that landlords are not able to relocate a tenant to...