DHCR Can't Order Deregulation Where Tenants Filed No Tax Returns

Landlord applied for high-rent/high-income deregulation of tenant's apartment in 2014. Tenants answered and claimed that they didn't file income tax returns in 2012 or 2013 because they had no income. The DRA ruled against landlord since the Department of Taxation and Finance (DTF) was unable to make tax matches for either tenant. Landlord appealed and lost. Landlord argued that, based on tenants' rent, luxury assets, and lifestyle, it wasn't credible that they were unemployed and had no income. Landlord said that the DHCR should make further efforts to verify tenants' income. But tenants weren't required to provide an explanation as to why DTF couldn't match their names with tax records. And tenants provided an explanation, stating that they didn't file returns, weren't required to do so, and had no income. The DHCR isn't authorized to make its own independent determination of what a tenant's income is. The DHCR was required by law only to rely on DTF's findings. Asking the DHCR to conduct investigations to independently determine tenants' household income would create an unreasonable administrative hardship and to make income and tax determinations that it wasn't qualified to make.

CF E 86 LLC, SM E 86 LLC, and LSG E 86 LLC: DHCR Adm. Rev. Docket No. FS410044RO (5/8/18) [6-pg. doc.]