DHCR Must Make More Effort to Determine Tenants' Income

(Decision submitted by James R. Marino of the Manhattan law firm of Kucker & Bruh, LLP, attorneys for the landlord.) Landlord applied for high-rent/high- income deregulation of tenants' rent-stabilized apartment. Tenants claimed that their total annual household income was less than $175,000 annually for one or both of the prior two years. The DHCR sought verification of tenants' income from the Department of Taxation and Finance (DTF). DTF said that it couldn't locate tenants' returns in its files. The DRA and DHCR ruled against landlord and dismissed its application because it couldn't verify tenants' income. Landlord challenged the DHCR's decision in court. The court ruled for landlord. Tenants gave the DHCR only a conclusory statement that their income was below the deregulation threshold. Since DTF couldn't confirm the amount, it was irrational to deny landlord's application without further effort to document tenants' income. Landlord is entitled to have its application considered on the merits. The DHCR should either make more effort to get confirmation from DTF, or it should get complete certified copies of the tax returns from tenants.

Zimak Co. v. DHCR: Index No. 100613/03 (Sup. Ct. NY 5/13/04; Cahn, J)