No Deregulation Where Renewal Lease Still in Effect After HSTPA Enacted

LVT Number: #30939

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 2017. On Sept. 7, 2018, the DRA ruled for landlord based on tenant's admission that his annual household income was above $200,000 in both 2015 and 2016. A year later, on Sept. 20, 2019, the DRA issued an Explanatory Addenda (EA) "to explain" the impact of HSTPA on its 2018 deregulation order. The DRA now said that if tenant had a renewal lease in effect on June 14, 2019, while awaiting deregulation under the Sept.

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 2017. On Sept. 7, 2018, the DRA ruled for landlord based on tenant's admission that his annual household income was above $200,000 in both 2015 and 2016. A year later, on Sept. 20, 2019, the DRA issued an Explanatory Addenda (EA) "to explain" the impact of HSTPA on its 2018 deregulation order. The DRA now said that if tenant had a renewal lease in effect on June 14, 2019, while awaiting deregulation under the Sept. 7, 2018, ruling after that lease expired, there would now be no deregulation when the renewal lease expired because HSTPA abolished high-rent/high-income deregulation prospectively after June 14, 2019.

Landlord appealed and lost. Landlord argued that the DRA improperly amended its 2018 deregulation order. The apartment wasn't deregulated by operation of law before HSTPA was enacted on June 14, 2019. And it didn't matter that landlord's 2017 application was determined based on the tenant's income in 2015 and 2016--that is, events that occurred before HSTPA was enacted. The DHCR also rejected landlord's claim that the DRA negligently and deliberately delayed processing of its "LD" application. There was no unreasonable delay in processing of landlord's 2017 application. Therefore, tenant's apartment would not be deregulated.

Belnord Partners LLC: DHCR Adm. Rev. Docket No. HV410289RO (7/20/20) [6-pg. doc.]

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