DHCR Can't Investigate Tenant's Businesses in Deregulation Case

Landlord applied for high-rent/high-income deregulation of tenant’s apartment in 2007. The DRA denied landlord’s application because it was incomplete and not refiled by July 2, 2007. Landlord appealed to the DHCR and lost. Landlord then filed an Article 78 petition, and the case was reopened. However, the DRA then denied landlord’s application after finding that tenant’s income was not more than $175,000 in either 2005 or 2006.

Landlord appealed and lost. Landlord claimed fraud and said that tenant was concealing part of her household income. Landlord claimed that two additional people lived in the apartment and that their incomes should have been considered as part of tenant’s household income. Landlord also claimed that tenant and her husband operated businesses out of the apartment and their Hamptons home that generated substantial income. But an apartment qualifies for luxury decontrol only if the relevant total household income is more than $175,000 in both of the two prior tax years. DTF records showed that tenant’s total household income was below the deregulation threshold in 2005. And the DHCR cannot independently investigate tenant’s household income. It has neither the authority nor the resources to do so.

Williamsburg Assets LLC: DHCR Adm. Rev. Docket No. XH410008RO (2/16/10) [7-pg. doc.]