DHCR's Application of HSTPA Abolishment of Luxury Deregulation Provisions Was Rational

Landlord applied to the DHCR on May 29, 2018, for a ruling that tenant's rent-stabilized apartment was subject to high-rent/high-income deregulation.  On Nov. 13, 2019, the DRA denied landlord's application because while landlord's application was pending, HSTPA amended the rent stabilization law effective June 14, 2019, to eliminate deregulation of rent-stabilized apartments. Landlord appealed, claiming that the DHCR improperly applied repeal of the luxury deregulation provisions found in HSTPA to this case. The DHCR ruled against landlord, who then filed an Article 78 court appeal of DHCR's decision.

The court ruled against landlord. The fact that the DHCR didn't adhere to the timeline set forth in the former Rent Stabilization Law provisions when processing landlord's 2018 application didn't prove that the DHCR's delay in issuing a deregulation order was intentional or caused by the DHCR's negligence or willful delay. The DHCR also pointed out that, in this case, the tenant's lease expired after June 14, 2019. So even if the DHCR had processed landlord's application before HSTPA changed the law, the unit couldn't have been deregulated because deregulation couldn't occur until after the effective date of the HSTPA amendments. As a result, the DHCR's decision that it couldn't authorize deregulation of tenant's apartment was rational. And the DHCR didn't apply HSTPA retroactively. HSTPA set forth a definitive effective date for abolishing high-rent vacancy and high-income deregulation, and noted that any unit lawfully deregulated prior to June 14, 2019, would remain deregulated. 

Riverside Syndicate, Inc. v. DHCR: Index No. 160089/2022, 2023 NY Slip Op 30714(U)(Sup. Ct. NY; 3/9/23; Kraus, J)