DHCR Decision That Apartment Had Been Deregulated Upheld by Appeals Court

Tenant complained to the DHCR of improper deregulation of his apartment and rent overcharge. The DHCR ruled against tenant, finding that the apartment had been vacancy deregulated more than six years before the base rent date. Tenant filed an Article 78 court appeal, claiming that the DHCR's decision was arbitrary and unreasonable.

The court and appeals court ruled against tenant and upheld the DHCR's ruling. The DHCR's decision didn't fail to consider the entire rental history to determine whether the unit was rent stabilized. To the extent that the registration history, showed unexplained rent increases before tenant moved in, the tenant identified no proof of illegal increases or improper preferential rents provided to previous tenants. The record before the DHCR also showed that 10 years before tenant filed his complaint, landlord performed individual apartment improvements (IAIs) and that the unit then became deregulated due to high-rent vacancy. Landlord timely filed a registration statement claiming to have performed sufficient IAIs to reach the vacancy deregulation threshold, and tenant admitted that work was being done when she visited the unit before renting. Tenant otherwise presented no proof that IAI work wasn't done. Landlord was required to maintain records for only four years after 2008, yet produced two types of proof that the DHCR had requested. The DHCR also wasn't required in 2008 to request additional proof of cost and payment based on tenant's claim of identify of interest between landlord and the super who performed the IAIs, although affidavits from the super and landlord's accountant were submitted. The DHCR also rationally determined that there was no indicia of a fraudulent scheme to deregulate the apartment. 

Matter of Tsegai v. DHCR: Index No. 452263/22, App. No. 2468, Case No. 2023-01808, 2024 NY Slip Op 03153, 228 A.D.3d 476 (App. Div. 1 Dept.; 6/11/24; Manzanet-Daniels, JP, Singh, Mendez, Rodriguez, Pitt-Burke, JJ)