DHCR Improperly Reverified Tenant's Income

Facts: Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 1998. Tenant's rent was over $3,900 per month. The Department of Taxation and Finance (DTF) verified that tenant's household income for 1996 and 1997 was over $175,000 for each year. The DHCR sent both sides a notice of proposed deregulation and gave each side the chance to comment. Tenant said that she had filed amended tax returns and that her income was below the deregulation threshold. The DRA asked DTF to reverify tenant's income. For one year, tenant's income was now less than $175,000. The DHCR ruled against landlord, and landlord appealed. The court ruled against landlord. Landlord then appealed to the Court of Appeals. Court: Landlord wins. It was irrational for the DHCR to permit reverification of tenant's income after DTF already verified it. Tenant never challenged the accuracy or validity of the original verification but simply noted that an amended tax return would support her claim that the apartment shouldn't be deregulated. Tenant didn't explain why she filed an amended return. The case was sent back to the DHCR to issue a deregulation order.

Classic Realty LLC v. DHCR: NYLJ, 3/31/04, p. 19, col. 5 (Ct. App. NY; Ciparick, JP, Kaye, Smith, Rosenblatt, Graffeo, Read, Smith, JJ)