DHCR Properly Found That Apartment Was Properly Vacancy-Deregulated

Tenant complained to the DHCR of rent overcharge. The DRA ruled against tenant, finding that her rent wasn't subject to rent stabilization. The DHCR denied  tenant's appeal, finding that the DRA had reviewed records going back before the four-year based date and determined that the legal rent had gone over the vacancy deregulation threshold before tenant moved in. The DHCR also found tenant's claim of rent fraud to have no merit. Pre-base date rent increases between 1984 and 1994 were insufficient proof of a fraudulent scheme to deregulate. Landlord also had submitted proof to support a 2008 rent increase for individual apartment improvements (IAIs).

Tenant then filed an Article 78 court appeal of the DHCR's decision. The court ruled against tenant, finding that the DHCR's decision was not arbitrary or capricious. Based on the Court of Appeals decision in Regina Metro. LLC v. DHCR (2020), if tenant claimed that the DHCR should have looked back more than four years when deciding her overcharge claim, she had to prove the existence of a fraudulent scheme to deregulate the apartment. Since tenant's complaint was filed before HSTPA took effect on June 14, 2019, she couldn't rely on the expanded lookback period and more liberalized, non-fraud based reasons for looking back beyond the otherwise applicable four-year limitations period. The DHCR rationally determined that none of the rent increases imposed between 1984 and 2008, when tenant moved in, were in excess of legally permitted increases, and weren't fraudulent. 

Tsegai v. DHCR: Index No. 452263/2022, 2023 NY Slip Op 30687(U)(Sup. Ct. NY; 3/7/23; Kelley, J.)