Court Refuses to Rule on High-Rent Deregulation Issue

Facts: Rent-stabilized tenants, husband and wife, moved out of their apartment on Dec. 31, 1999, and advised landlord that their daughter would remain. The daughter claimed pass-on rights. During the year 2000, landlord sent tenants an Income Certification Form and filed an application for high-rent/high-income deregulation of tenants' apartment. Landlord then asked a court to issue a ruling, declaring that tenants' income would be included in the calculation of the household income because they lived in the apartment during 1998 and 1999. Landlord claimed that the DHCR's Operational Bulletin 95-3 would require exclusion of tenants' income from the calculation and that the Operational Bulletin was unlawful, so that it made no sense to wait for the DHCR to rule on the deregulation application, rather than go to court. Court: Landlord loses. Landlord must wait until the DHCR rules on its deregulation application. There is no established rule on the issue that landlord claims the DHCR will decide against it. Landlord claimed that the DHCR Operational Bulletin 95-3 requires that who is in the household for income inclusion purposes is determined as of the date the Income Certification Form is sent to tenant. But landlord didn't attach a copy of the Operational Bulletin to its court petition and didn't show any cases where the DHCR applied this so-called rule. In opposing landlord's court action, the DHCR made no reference to the Operational Bulletin, didn't claim that it was required to follow it, and didn't state how it would be applied, if at all.

Katz 737 Corp. v. Shapiro: NYLJ, 12/20/00, p. 29, col. 6 (Sup. Ct. NY; Miller, J)