DHCR's Explanatory Addenda Affirmed HSTPA's Elimination of Deregulation of Apartment

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 2019. Landlord pointed out that tenant admitted in response to the Income Certification Form (ICF) issued that year that her total annual household income was more than $200,000 for the years 2017 and 2018. The DRA ruled for landlord on June 12, 2019. The deregulation order stated that the apartment would be deregulated upon expiration of the lease in effect on the date the order was issued.

On Sept. 6, 2019, the DRA sent landlord and Explanatory Addenda (EA) to the deregulation order which explained that, if the lease in effect on June 12, 2019, expired after June 14, 2019, there would be no deregulation since the HSTPA had eliminated high-rent/high-income deregulation effective June 14, 2019.

Landlord appealed and lost. Landlord claimed that the EA was arbitrary and unreasonable, that the DHCR had no authority to issue the EA, and that tenant hadn't appealed the deregulation order. Landlord also argued that the HSTPA provisions were unconstitutional and that the decision of New York's highest court in Regina Metro. Co., LLC v. DHCR should be applied to prohibit the revocation of the apartment's lawful deregulation by prior DHCR order.

The DHCR rejected landlord's claims. The Regina decision applied only to certain rent overcharge provisions of the HSTPA. And the June 12, 2019, deregulation order didn't state that the apartment was immediately deregulated. Instead, deregulation was conditioned upon expiration of the existing lease. Since that lease expired on March 31, 2020, HSTPA precluded deregulation. And the DHCR had no authority to rule on landlord's constitutional law claims.

525 West End Corp.: DHCR Adm. Rev. Docket No. HV410272RO (10/5/20) [7-pg. doc.]