Daughter Gets Apartment of Tenants Who Retained Rent-Controlled Status After Transfer

The daughter of deceased tenants sought succession rights to their apartment in a DHCR application. The daughter claimed that the unit was rent controlled. Tenants had moved from one apartment to another in the same building, and landlord argued that tenants didn't maintain their rent-controlled status when they moved.

The DHCR ruled against the daughter, who filed an Article 78 court appeal resulting in remand to the DHCR for further consideration. The DHCR then ruled for the daughter, finding that tenants' surrender of their first apartment hadn't been entirely voluntary. Landlord filed an Article 78 court appeal of the DHCR's second decision, and the case was again sent back to the DHCR for "further fact-finding and determination" beyond the record originally before the DRA. The DHCR issued a final order in 2024, affirming that the daughter had succession rights.

Landlord filed another Article 78 appeal and lost. The DHCR rationally ruled that tenants' decision to transfer apartments wasn't wholly voluntary. Landlord initiated the transfer and benefitted from it. New York's highest court had ruled in Capone v. Weaver (1959) that such a transfer wasn't wholly voluntary. The court also found that the DHCR was permitted to consider facts and evidence not before the DRA that related to the transfer since 9 NYCRR 2529.6 provided that "proceedings remanded back to the DHCR following an Article 78 may be reconsidered at the discretion of the commissioner, without being remanded to the rent administrator." The DHCR acted within its discretion to conduct a new factual inquiry as directed by the lower courts. An evidentiary hearing wasn't required.

559 W. 156 BCR LLC v. DHCR: Index No. 157604/2024, 2025 NY Slip Op 30797(U)(Sup. Ct. NY; 3/11/25; Frank, J)