Court Finds DHCR Negligent for Not Timely Processing 2016 Deregulation Application
LVT Number: #33018
In May 2016, landlord timely applied to the DHCR for high-rent/high-income deregulation of tenant's rent-stabilized apartment. The DRA ruled against landlord in November 2019, and dismissed the application because, effective June 14, 2019, HSTPA amendments to the RSL abolished luxury deregulation.
Landlord appealed, and the DHCR denied its PAR. Landlord then filed an Article 78 court appeal, claiming that the DHCR improperly relied on a retroactive application of HSTPA amendments to the rent stabilization law after ignoring the law's requirements for processing its application. Landlord argued that, if the DHCR had acted within the deadlines set forth by former RSL Section 26-504.3(c), it would have decided the matter long before HSTPA went into effect. Landlord pointed out that, after it filed its timely application, the DRA was required to notify tenant within 20 days and request a response within 60 days. But landlord heard nothing from the DRA until it denied the application more than three years later. The DHCR admitted that it waited a year and a half to serve the required notice on the tenant.
The court ruled for landlord. The DHCR had never issued a deregulation order or any order on the merits in this case before HSTPA was enacted. The court found that the DHCR "negligently" failed to issue a decision in the more than three years that passed between the initial deregulation petition was filed and the effective date of HSTPA. The DHCR blatantly ignored statutory deadlines for notifying tenant and processing landlord's application. The court found that the DHCR's actions in this case "are the definition of irrational and negligence."
The court sent the case back to the DHCR, finding that landlord was entitled to a review of its application and a decision on the merits under the statutory scheme in effect when tenant's time to respond to the application expired in 2016.
225 Central Park North LLC v. DHCR: Index No. 155440/2023, 2023 NY Slip Op 34472(U)(Sup. Ct. NY; 12/20/23; Bluth, J)