Court Upholds DHCR Ruling That Apartment Wasn't Vacancy Deregulated

Tenant complained to the DHCR of rent overcharge and improper deregulation of his apartment. The DRA ruled against tenant, finding that the unit had been vacancy deregulated and the base date rent was $2,500. Tenant appealed and won. The DHCR found that tenant was rent stabilized. A prior tenant had signed a 15-year lease in 1993 at $1,500 per month, although his monthly rent eventually was increased to $4,000. Prior tenant lived in the unit on the base rent date and paid $2,500 per month at that time. Landlord had failed to explain any of prior tenant's rent increases or to show that the apartment had been properly deregulated. Landlord then filed an Article 78 court petition, claiming that the DHCR's decision was arbitrary and unreasonable.

The court ruled against landlord, finding the DHCR's final decision rational. Landlord didn't dispute information concerning the alleged 15-year lease to the prior tenant while before the DHCR. And the amount of rent charged does not, by itself, entitle landlord to seek deregulation of an apartment. Where an apartment was never properly treated by any owner as rent stabilized, it couldn't have been removed from rent stabilization based on high-rent vacancy deregulation. Landlord never showed that there was a rent-stabilized lease for the apartment, that the unit was properly registered as rent stabilized, or that it took appropriate steps to deregulate the apartment. 

Chelsea Hotel Owner LLC v. DHCR: Index No. 160643/2022, 2023 NY Slip Op 31889(U)(Sup. Ct. NY; 6/5/23; Bluth, J)