Inconsistent Orders Issued on Deregulation Application

Facts: Landlord filed a petition with the DHCR for deregulation of tenant's apartment in 1994 because tenant's rent was over $2,000 per month and landlord claimed tenant's 1992 and 1993 annual household incomes were more than $250,000. The DRA ruled for landlord based on tenant's default. Tenant appealed, claiming that he never received a notice of landlord's petition from the DHCR and that his annual household income was far less than $250,000. The DHCR denied tenant's PAR in 1996, finding that tenant hadn't submitted any answer to the 1994 deregulation petition. Tenant appealed. Before its final ruling on landlord's 1994 deregulation petition, landlord had filed another deregulation petition in 1995. Tenant answered that petition and showed that his annual household incomes for 1993 and 1994 were less than $250,000. So the DHCR denied landlord's 1995 deregulation petition. Tenant claimed that the two orders were unreasonably inconsistent. Court: Tenant wins. The DHCR's ruling on the 1994 deregulation petition was arbitrary and capricious and didn't have a rational basis. The DHCR granted landlord's 1994 deregulation petition without considering the facts, and reached the opposite conclusion on the 1995 deregulation petition when it did consider the facts. These facts were in the DHCR's records before it made its final ruling on the 1994 deregulation petition.

Vahab v. DHCR: NYLJ, p. 26, col. 2 (11/5/97) (Sup. Ct. NY; Gans, J)