Deregulation Order Nullified by Explanatory Addenda

Landlord filed a high-rent/high-income deregulation application with the DHCR for tenant's rent-stabilized apartment in 2015. The DRA ruled for landlord in June 2018, finding that tenant's rent was $2,500 or more per month and that tenant's household income was $200,000 or more during both 2013 and 2014. Tenant filed a timely PAR in 2018, and argued that her daughter's income should not have been considered because the daughter didn't live in the apartment as her primary residence as of January 2015.

While tenant's PAR was pending, the DRA later issued an Explanatory Addenda (EA) on Sept. 20, 2019. The EA stated that, under HSTPA changes to the rent stabilization law, if tenant's lease in effect on the date the RA's deregulation order was issued expired before June 14, 2019, the apartment was deregulated. Otherwise, if the rent-stabilized lease in effect when the RA's order was issued expired on or after June 14, 2019, then tenant's apartment remains subject to rent stabilization.

Landlord filed a PAR of the EA. The DHCR consolidated the two cases, ruled for tenant, and ruled against landlord. When the RA's deregulation order was issued on June 15, 2018, tenant's existing lease had commenced on May 1, 2018, and was set to expire on April 30, 2020. The DHCR found that HSTPA precluded the agency from determining that the apartment was high-income rent deregulated when tenant's lease expired, since there were no longer any rent laws or regulations that would permit the deregulation. The EA wasn't a superseding order; it merely explained the effect of the law to the facts presented in this case. 

Goldsmith/Pickus/Lichter Real Estate Number One LLC: DHCR Adm. Rev. Docket Nos. GS410026RT, HV410253RO (2/6/20) [5-pg. doc.]