DHCR Can Withhold Certain Records from Landlord Under Law Enforcement Exception

The DHCR's Tenant Protection Unit (TPU) sued landlord LLC entities of 38 buildings containing more than 2,500 rent-stabilized apartments, along with individuals who were connected with the landlord entities. The TPU claimed that landlord violated the Rent Stabilization Law and Code and, among other things, charged illegal key fees to tenants. After the court denied landlord's request to dismiss the case (see LVT #30748), the parties engaged in discovery. The DHCR refused to produce some records that it deemed privileged, and landlord asked the court to compel the DHCR to produce documents and to produce certain deposition witnesses with relevant information.

The court ruled against landlord. Generally, the rules of discovery are broad and the State of New York or its agencies are treated in the same manner as a private citizen. But law enforcement proceedings are an exception. The court reviewed the records in question and found that they were properly deemed privileged. And, documents shared with third-party agencies didn't waive attorney-client privilege because the common interest and/or law enforcement privilege applied. The third-party agencies involved also compiled documents and conducted tenant interviews in anticipation of their own lawsuit against landlord. The court directed the parties to appear for a compliance conference in November 2023.

DHCR v. Zara Realty Holding Corp.: Index No. 450245/2019, 2023 NY Slip Op 33593(U)(Sup. Ct. NY; 10/6/23; Edwards, J)