Deregulation Not Barred by Unusual Spike in Income

Landlord applied for high-rent/high-income deregulation of tenants' apartment in 2008 after tenants admitted on the Income Certification Form (ICF) that their total annual household income was more than $175,000 in each of the two prior years. The DRA ruled for landlord based on tenants' admission.
Tenants, who were husband and wife, appealed and lost. Tenants claimed that during 2007, the husband lost his job and received a payout from his employer that represented benefits and payment for unused vacation time that weren't attributable to 2007. They argued that, although they didn't challenge the employer's classification of the payout or seek amendment of tax returns, this unusual payout didn't really constitute 2007 income. However, on both the ICF and answer to landlord's application, tenants indicated that their adjusted gross household income was over $175,000 for both 2006 and 2007, and this was how the payout was classified on their tax return. Tenants claimed that New York's highest court had ruled in a prior case that the DHCR must independently evaluate tenants' explanation. But that case involved tenant's explanation of amended tax returns that lowered the household income below the deregulation threshold. Here, no change was made to tenants' return.

Brodie: DHCR Adm. Rev. Docket No. XC410042RT (9/15/09) [11-pg. doc.]