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Court Voids Denial of Permit Renewal For Failure to Adhere to Administrative Precedent

A determination of the New York City Board of Standards and Appeals (BSA) to deny a permit renewal was reversed by the Appellate Division as arbitrary, capricious and without a rational basis. In Matter of Menachem Realty Inc. v Srinivasan the court found the denial of a permit renewal to complete construction, after a site had been rezoned, was inconsistent with prior determinations of the BSA.

Petitioner had a permit to construct a six story building but upon audit by the Department of Buildings (DOB) a number of objections to the construction were noted and a notice was sent to Petitioner by DOB. Thereafter, the property was rezoned and the DOB revoked the permit for failure to address two of its objections. Petitioner applied for an extension of the permit in order to complete construction. Before the BSA hearing was held, the DOB restored the permit on the grounds that the objections had been cured. However, upon hearing the application of Petitioner the BSA found that the permit was not valid on the effective date of the rezoning and therefore it could not issue a renewal.

The court found the BSA ruling was inconsistent with previous findings and that the lower court was correct in holding “the BSA’s determination was arbitrary and capricious because it treated similarly-situated parties in a nonuniform manner.” The court went on to note: “the BSA failed to adhere to its own precedent and to properly distinguish its prior determinations in which it had found that permits were valid on essentially the same facts…”.