DHCR Must Reconsider Deregulation of Tenant's Apartment

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 2011. The DRA ruled for landlord in 2018. The DRA had asked both tenant and the Dept. of Taxation and Finance (DTF) for income verification. Despite numerous requests, tenant failed to supply the requested information. In 2014, DTF said that it couldn't make a tax match for tenant for either relevant tax year.

Tenant appealed to the DHCR and lost. The court then denied tenant's Article 78 appeal of the DHCR's decision. Following that, tenant sought renewal and reargument from the court. Tenant then presented for the first time a June 2019 sworn statement from DTF staff, which said that DTF's prior statement that it couldn't locate tenant's income verification information for 2009 and 2010 was inaccurate. Tenant had in fact filed a 2009 tax return, showing that her annual household income was less than $175,000. The court denied tenant's request to send the case back for further consideration.

Tenant appealed and won. Sending the case back to the DHCR for submission of a complete record, further fact finding, and a new ruling was needed for the DHCR to render substantial justice to the parties. One judge dissented from the appeal panel's ruling, finding that the DHCR's determination that tenant defaulted in responding to repeated requests for information needed to verify household income was rational. 

Zelig v. DHCR: App No. 12443-12443A, 2020 NY Slip Op 07736 (App. Div. 1 Dept.; Webber, JP, Gonzalez, Scarpulla, Shulman [dissenting], JJ)