DHCR Must Go Back More Than Four Years to Calculate Legal Rent in Pre-HSTPA Case

Rent-stabilized tenant applied to the DHCR for a calculation of the legal regulated rent for his apartment. The DRA ruled in 2020 that the legal rent was $1,161.90 per month at the expiration of the most recent renewal lease on June 30, 2019. The DHCR denied tenant's PAR, which claimed that the DRA improperly limited review of his claim to a four-year lookback period and didn't review questions he had raised about the MCI increase. The DHCR noted that, because the case was started before enactment of the HSTPA on June 14, 2019, and because there was no substantial indicia of a fraudulent scheme to deregulate the apartment, examination of rental history was limited to the four-year period before tenant filed his complaint. The DHCR ruled that tenant couldn't collaterally attack the MCI rent increase in this proceeding. Tenant then filed an Article 78 court appeal of the DHCR's decision, which was denied. He went on to appeal further, and the Second Department ruled in tenant's favor.

The court found that the DHCR's limit of rent history review to four years starting in December 2010 was arbitrary and capricious. Although New York's highest court has ruled that overcharge calculation provisions in RSL Section 26-516(h) can't be applied retroactively, in this case tenant sought a calculation of the legal regulated rent and not damages for prior overcharges. So, application of RSL Section 26-516(h) wouldn't have the same problematic retroactive effect as found by New York's highest court in Regina Metro. Corp. LLC v. DHCR (2020). The DHCR should have considered tenant's submissions indicating that the apartment contained three rooms, not four, which he claimed had resulted in an excessive MCI rent increase and therefore an incorrect legal regulated rent.

The court sent the case back to the DHCR for a new ruling to determine the apartment's legal rent.

Syllman v. DHCR: App. No. 2022=01424, Index No. 703447/21, 2024 NY Slip Op 06568 (App. Div. 2 Dept.; 12/24/24; Connolly, JP, Christopher, Genovesi, Warhit, JJ)