I.

Rachel Crespin owns 323 East 53rd Street, a four-story apartment building in Manhattan. Petitioner George Rizzo resides in a rent-controlled unit comprising the third floor of the building. He lives alone in an apartment of some 1200 square feet which, as of the original certificate of occupancy, contained six rooms. Crespin resides in a unit comprising the second story; she and her husband had been the building's first rent-controlled tenants. The fourth-floor apartment was rent- controlled until its occupant, Elaine Bloedow, died in early January 2002, an event of significance in this litigation. The remaining unit is unregulated.

Crespin bought the building in 1981. In 1996, she filed applications for certificates of partial eviction of Rizzo and Bloedow, explaining that she had been losing money on the property for years. In her application, she relied on New York City Rent and Eviction Regulations (9 NYCRR) § 2204.7, which prescribes when the Rent Administrator may authorize subdivision of an under-occupied, rent-controlled apartment and order partial eviction of its tenant. Crespin sought to evict Rizzo and Bloedow from the front portions of their units, leaving them with considerably smaller apartments, in order to create a new duplex unit from the vacated front rooms.

The New York City Rent and Rehabilitation Law and its implementing regulations require the City's rent agency to issue an order granting a certificate of eviction or partial eviction when "[t]he landlord seeks in good faith to recover possession of a housing accommodation for the immediate purpose of substantially altering or remodeling it" (NY City Administrative Code § 26-408 [b] [3]; NY City Rent and Eviction Regulations [9 NYCRR] § 2204.7). Such a certificate, however, may be granted only if two conditions are met: the agency must determine, first, that the housing accommodation in question is under-occupied and contains six or more rooms, excluding bathrooms and kitchen (NY City Rent and Eviction Regulations [9 NYCRR] § 2204.7 [a]), and, second, that, without recourse to eviction, "there is no reasonable possibility that the landlord can make a net annual return of eight and one-half per centum of the assessed value of the subject property" (NY City Administrative Code § 26-408 [b] [5] [a]; see also NY City Rent and Eviction Regulations [9 NYCRR] § 2204.4 [g] [1]).

Following an audit of Crespin's income and expenses for the "test year" 1996, an inspection of Rizzo's apartment, a fact- finding hearing in 1999 and a detailed, May 26, 2000 report by an Administrative Law Judge, DHCR granted Crespin's application, on September 18, 2000, and ordered Rizzo and Bloedow to surrender the front halves of their apartments. The agency also ordered Crespin to reduce Rizzo's rent from $673.64 to a maximum of $301.55. With regard to the relevant year, 1996, DHCR's District Rent Administrator noted that the Administrative Law Judge had found no reasonable possibility that Crespin could make a net annual return of 8.5% of the assessed valuation of the property, without recourse to eviction.[1] The Rent Administrator further found that there was no probative evidence of bad faith on Crespin's part; that Rizzo's apartment originally contained six rooms and that a wall had been taken down in the interim; and that it was under-occupied within the meaning of New York City Rent and Eviction Regulations (9 NYCRR) § 2204.7 (a).

Rizzo and Bloedow filed Petitions for Administrative Review. On January 2, 2002, the DHCR Deputy Commissioner denied them. Then, apparently the very next day, Bloedow died, and her apartment became deregulated.

In March 2002, Rizzo commenced this article 78 proceeding, seeking reversal and remittal to DHCR.[2] Supreme Court noted that Bloedow's death had resulted in decontrol of her apartment and held that "the impact of the recent deregulation of Bloedow's apartment must be considered by the DHCR in determining the owner's ability to meet the 8 1/2% return requirements of the Sound Housing Act." It vacated DHCR's determination, ordered that the evidence of Bloedow's death and its impact be presented to the agency and remitted the application for reprocessing.[3]

DHCR appealed and, by a divided court, the Appellate Division reversed, concluding that the trial court's consideration of evidence not contained in the administrative record exceeded the scope of permissible judicial review. Rizzo appeals as of right (CPLR 5601 [a]), and we now affirm.

II.

In reviewing orders of the DHCR, courts are limited to the factual record before the agency when its determination was rendered. As a rule, the court may not consider evidence concerning events that took place after the agency made its determination. This follows from a fundamental principle of article 78 review, that "[j]udicial review of administrative determinations is confined to the facts and record adduced before the agency" ( Matter of Yarbough v Franco, , 95 NY2d 342, 347 2000] [internal quotation marks and citation omitted]). That, of course, is merely another way of saying that an appellate court is bound by the record. In short, "judicial review of an administrative determination is limited to the grounds invoked by the agency" ( Matter of Aronsky v Board of Educ., Community School Dist. No. 22, , 75 NY2d 997, 1000 [1990]; see generally Matter of Montauk Improv., Inc. v Proccacino, , 41 NY2d 913 [1977]).

Rizzo relies on New York City Administrative Code § 26- 411 (a) (2), which carves out a narrow exception to the general rule: "If application is made to the court by either party for leave to introduce additional evidence which was either offered and not admitted or which could not reasonably have been offered or included in such proceedings before the city rent agency, and the court determines that such evidence should be admitted, the court shall order the evidence to be presented to the city rent agency."

This language, however, should not be interpreted as permitting a court to engage in, or order, a de novo review based on events that took place after the agency made its determination. As the Appellate Division noted, "the admission of subsequent events which occurred after the final agency order would defeat finality and could subject an otherwise final order to endless recurring review" (16 AD3d 72, 78). We agree with DHCR that it could not have been the intent of the Legislature to subject the agency's rulings to the prospect of such endless review, based on submissions by tenants or by landlords as to post-determination events.

We therefore hold that in judicial review of a rent agency decision made pursuant to New York City Administrative Code § 26-408 (b) (3) or New York City Rent and Eviction Regulations (9 NYCRR) § 2204.7, the "additional evidence" that may be admitted under § 26-411 (a) (2) is limited to facts that arose before the agency made its determination. When, as here, DHCR determines that a landlord's application for a certificate of eviction should be granted because, at the time of the application, there was no reasonable possibility that the landlord could make an 8.5% net annual return, a reviewing court may admit additional evidence only if the evidence is relevant to that time-specific determination.

DHCR's inquiry was whether Crespin could make an 8.5% net annual return in the test year 1996. Bloedow's death in 2002 was irrelevant to the DHCR's determination and should not have been considered by Supreme Court. By ordering that the evidence of Bloedow's death be presented to the DHCR, the court exceeded the permissible scope of its review.

III.

Petitioner and our dissenting colleague cite McMurray v New York State Div. of Housing & Community Renewal, , 72 NY2d 1022 (1988) in support of the claim that Supreme Court correctly remitted the matter to the agency for de novo review. McMurray is not on point. It concerned a different provision of the Rent and Rehabilitation Law (NY City Administrative Code § 26-408 [b] [1]), the legislative history of which distinguishes it from New York City Administrative Code § 26-408 (b) (5) (a), the provision that is crucial here.

New York City Administrative Code § 26-408 (b) (1), the subject of McMurray, makes tenancy for less than 20 years a condition precedent of evicting the tenant of a rent-controlled apartment that the landlord requires for personal use and occupancy. This Court held that "a tenant in possession who accumulates the requisite 20 years of occupancy before the validity of a certificate of eviction is finally determined by the courts is protected from eviction," even when the tenant reaches the 20-year milestone after the certificate of eviction is issued (72 2 1022, 1024).

The provision in McMurray was construed in the tenant's favor because the legislative history of that provision, a 1984 amendment, shows a clear intent to protect elderly, long-term and disabled tenants from eviction merely for the sake of an owner's personal use and occupancy, irrespective of the timing of the landlord's application for a certificate of eviction. For example, the 1984 amendment was expressly made applicable " to any tenant in possession at or after the time it [took] effect," regardless of whether the landlord's application occurred before the act took effect (L 1984, ch 234, § 4) (emphasis added). We held in McMurray that the Legislature intended the § 26-408 (b) (1) protection to apply whenever a tenant in possession reaches the 20-year milestone. We are unpersuaded, however, that by enacting New York City Administrative Code § 26-408 (b) (5) (a), the Legislature intended to give a tenant -- or, in another case, a landlord -- the right to have ongoing de novo review of whether the landlord can make an 8.5% net annual return for as long as the tenant is in possession.

IV.

We further agree with the Appellate Division that DHCR's determination was supported by substantial evidence and was not arbitrary or capricious.

Accordingly, the order of the Appellate Division should be affirmed, with costs. Matter of Rizzo v Div. of Housing and Community Renewal No. 166 CIPARICK, J. (dissenting):

Because the Sound Housing Act of 1974 and City Rent Control Laws bestow the New York State Division of Housing and Community Renewal ("DHCR"), as well as the courts, with discretion to effectuate its goal of avoiding unwarranted evictions and preserving affordable housing, I respectfully dissent.

This case involves the interplay of the Sound Housing Act and the introduction of new evidence under NY City Administrative Code § 26-411 (a)(2). "It is fundamental that a court, in interpreting a statute, should attempt to effectuate the intent of the Legislature" ( Patrolmen's Benevolent Assn. of the City of New York v City of New York, , 41 NY2d 205, 208 [1976]). The starting point is always to look to the language itself and "[w]here the language of a statute is clear and unambiguous, courts must give effect to its plain meaning" ( Matter of Tall Trees Constr. Corp. v Zoning Bd. of Appeals of the Town of Huntington, , 97 NY2d 86, 91 [2001]).

Looking at the plain language of the statutes, I conclude that Supreme Court did not exceed the permissible scope of its review (majority op at 7) but acted reasonably in interpreting these statutes to authorize it to remit the matter to DHCR when, as here, new evidence arose which tangibly called into question the justification for evicting petitioner from over half of his apartment. The Sound Housing Act as codified in NY City Administrative Code § 26-408 (b)(5) is unambiguous in its requirement that in order to evict a rent controlled tenant for alteration or demolition purposes the agency must find that "there is no reasonable possibility that the landlord can make a net annual return of eight and one-half per centum of the assessed value of the subject property" (emphasis added). It is further provided that where a party attempts to introduce new evidence which the court finds admissible, the new evidence must then be remitted to DHCR (NY City Administrative Code § 26-411 [a][2]).[4]

Clearly, the new evidence of the death of the only other rent controlled tenant, Elaine Bloedow, was unavailable earlier, as she died on or about the day the DHCR Commissioner issued its final order in January 2002, but before the execution of a certificate of eviction. Equally as obvious is that Bloedow's death materially changed the potential income of the building as the apartment became immediately deregulated. Thus, Supreme Court's remittal to the DHCR for consideration of what implications the deregulation of Bloedow's apartment has on the building's financial return fits squarely under the statute. It was an abuse of discretion on the part of DHCR not to accept the remittal from Supreme Court.

Regardless, the majority wishes to narrow the breadth of the statute by limiting for consideration evidence of only events that occurred prior to DHCR's final order (majority op at 7). However, nothing in the language of the statute or its legislative history limits the introduction of evidence based on when it arose. Instead, it explicitly contemplates the late introduction of evidence -- after the agency has acted -- by requiring the court, during its review, to refer any new relevant evidence to the agency. Thus, under the plain language of the statute, Supreme Court acted properly and within its discretion by ordering the new evidence to be presented to DHCR.

Assuming arguendo that the plain language was not so clear, the remedial nature of the statute and the legislative history of the Sound Housing Act require DHCR to consider this change in circumstances. When faced with the application of a remedial statute, we must give it liberal construction to carry out the reform intended and to spread its beneficial results as widely as possible ( see Post v 120 E. End Ave. Corp., , 62 NY2d 19, 24 [1984]). "[S]ince rent-control laws are remedial in nature and designed to promote the public good, their provisions should be interpreted broadly to effectuate their purposes" ( Braschi v Stahl Assoc. Co., , 74 NY2d 201, 208 [1989][citations omitted]).

"It is fundamental that in construing the words of a statute the legislative intent is the great and controlling principle" ( >,74 NY2d at 207 [internal quotations omitted]). The purpose of the Sound Housing Act as proffered by its sponsors is to "prohibit[] the eviction of tenants from rent controlled housing for demolition or alteration unless there is no reasonable possibility of the landlord making a fair return without eviction for the purposes of demolition or alteration" (Sponsor's Mem, Bill Jacket, L 1974, ch 1022). In explaining the need for the Sound Housing Act, the sponsors made reference to the fact that "[h]ousing of the type being lost can no longer be built in this city" and "[e]ven subsidized housing comes in at rentals far beyond the means of working people of moderate means" (Sponsor's Mem, Bill Jacket, L 1974, ch 1022). The memorandum further noted that "[t]he housing being destroyed also houses many of the City's elderly people whose only income is a social security check" ( id. at 2). The Office of the Mayor of New York in support of this bill stated that:

"Indiscriminate demolition has had a debilitating affect on entire neighborhoods in the City. Long term residents are displaced and the stability of communities are threatened. The underlying assumption in this bill is that tenants shall not be evicted if the building is physically sound or economically viable" (Letter from The City of New York Office of the Mayor, May 3, 1974, Bill Jacket, L 1974, ch 1022).

The legislative history and the underlying rationale behind New York City's rent regulatory framework are forthright in their intent to prevent unwarranted evictions and to preserve affordable housing yet the majority's decision subjects the tenant to eviction from most of his apartment despite the appearance that the building is now economically sound. In fact, petitioner's situation is illustrative of exactly what the rent regulatory laws aim to protect. Rizzo is 84 years old and has lived in the apartment for 45 years. The record reflects that he uses the apartment both to live and to work as an artist, and there is no indication that he is anything but a good tenant. To partially evict Rizzo, leaves him with under 500 square feet of space for living and working and deprives him of more than half the apartment.

Now while I concede that it is likely that NY City Administrative Code § 26-408 (b)(3) and (5) using the 1996 test year would permit the alteration of the apartment by the landlord for an increase in its net annual return, it is undisputed that the situation here has changed dramatically since Bloedow's death.[6]

Bloedow lived on the fourth floor. Upon her death, the apartment she had occupied was deregulated and the landlord became free to charge the substantially higher market rent.[7] If this scenario increases the landlord's return beyond 8 1/2 %, which it likely will, there would be no need or legal basis to resort to the drastic measure of evicting Rizzo. There is nothing in the statute or our precedent that mandates eviction of a rent controlled tenant based on an obsolete snapshot computation of the building's finances. Instead, the statute calls for eviction only when there is "no reasonable possibility" that the landlord could not obtain the 8 1/2% return. Under the circumstances, the proper action is to do exactly what Supreme Court did -- remit the matter to DHCR to consider this new evidence pursuant to NY City Administrative Code § 26-411 (a)(2) and reconsider the landlord's application for a certificate of eviction.

"Statutes are ordinarily interpreted so as to avoid objectionable consequences and to prevent hardship or injustice" ( Braschi, 74 NY2d at 208). Thus the Sound Housing Act should be liberally construed to prevent unsubstantiated evictions. To effectuate this goal, DHCR has the power to revisit the issue of economic viability when the circumstances drastically change under NY City Administrative Code § 26-411 (a)(2). Despite the clear legislative goals and the inherent power of both DHCR and the courts to revisit the issue of whether the eviction is justified economically, the majority chooses to disregard the equitable and remedial nature of the statute and read into the statute a bright-line rule setting an arbitrary time frame when new evidence may be considered post final agency determination.

What the majority misconstrues is that remedial laws do not always fit squarely into a bright-line rule. By the majority's own account, had the rent controlled tenant died one day prior to the issuance of the DHCR order, rather than on or about the day of its issuance, remittal would then be appropriate and the agency would have been compelled to consider the new evidence. This arbitrary cut off date does nothing to enforce the rent control laws but instead undermines them by allowing another rent controlled unit to be removed from the market. Instead, due to the drastic nature of an eviction, albeit a partial eviction, the interests of the public would be better served if the court and the agency maintained and exercised its power to revisit the need for the eviction at all times prior to the actual execution of the warrant.

Indeed, our prior holdings also dictate a different result than that reached by the majority. In Matter of McMurray v New York Div. of Hous. & Community Renewal (72 2 1022 [1988]), DHCR issued a certificate of eviction against a rent control tenant after the landlord sought possession for its own use under NY City Administrative Code § 26-408 (b)(1). After the administrative proceedings and issuance of the certificate of eviction the tenant sought judicial review. During this time, the tenant became subject to the "20 year rule" which prohibits a rent controlled tenant's eviction by the landlord for its own personal use where the tenant has resided in the apartment for over 20 years ( see NY City Administrative Code § 26-408 [b][1]). The Court held that "a tenant in possession who accumulates the requisite 20 years of occupancy before the validity of a certificate of eviction is finally determined by the courts is protected from eviction" ( McMurray, 72 NY2d at 1024).

Despite the finality of DHCR's issuance of a certificate of eviction, the McMurray Court found that the significant change of circumstances should be considered. Likewise, the circumstances in this instance have changed drastically since DHCR's final order. If these changes were considered, the outcome of the application before DHCR would likely be affected as the landlord has already accomplished her goal of increasing the potential return having recouped the other rent controlled apartment. Thus, to subject petitioner to an eviction without considering this significant change offends the spirt of the remedial rent control laws.

While, of course, the need for finality in administrative determinations generally is a noble goal, drawing an arbitrary line does not serve a rational purpose here as it promotes the eviction of innocent long-term tenants from their homes. The need to preserve the affordable housing stock clearly outweighs DHCR's need for finality in this situation as finality merely alleviates the agency's workload but does nothing to effectuate the goals of the rent regulatory framework ( cf. Matter of Dworman v New York State Div. of Hous. and Community Renewal, , 94 NY2d 359 [1999] [holding that despite the statutory requirement that a tenant respond to an luxury deregulation income request within 60 days, failure to timely comply does not automatically result in vacancy decontrol if tenant has good cause for responding late]).

DHCR's insistence on finality is also contrary to general rent regulatory eviction principles and its other remedial statutes. Under RPAPL § 749 (3), for example, a court has the power to vacate a warrant of eviction at any point prior to its execution for good cause.[8] Although this proceeding has not yet resulted in the issuance of a warrant of eviction, this analysis is demonstrative of the court's power to prevent undue evictions. For example, had a warrant of eviction issued based on a tenant's failure to pay rent arrears, a court could stop the eviction and vacate the judgment for good cause if the tenant paid the arrears after issuance of the warrant ( cf. RPAPL § 753 [4] [providing that if a landlord prevails on a holdover proceeding seeking possession of a residential premises based on a lease violation, the court must give the tenant 10 days to cure the violation before a warrant may issue]). Regardless of the inherent power of the court to stop evictions for good cause, the majority herein chooses to read the rent regulatory laws as offering less protection to the lease abiding tenant than the one who openly violates the terms of the landlord-tenant relationship.

In light of clear legislative intent and a plain language provision obligating the court to refer newly discovered relevant evidence to DHCR and further recognizing the agency's discretion to revisit the need for the tenant's eviction, I cannot reconcile the majority's narrow reading of this inherently flexible remedial statute. As such, I would reverse the Appellate Division and reinstate the order of Supreme Court.