DHCR's Explanatory Addenda Allowed Deregulated Tenant's Rent-Stabilized Status to Continue

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 2018 since it disputed tenant's Income Certification Form (ICF) statement that his annual household income was below the deregulation threshold for both 2016 and 2017. The DRA ruled for landlord on Oct. 19, 2018, based on tenant's admission that his total household income was above $200,000 for both 2016 and 2017. Tenant's monthly rent of $2,700 per month also was above the deregulation threshold.

Later, on Sept. 6, 2019, the DRA sent landlord an Explanatory Addenda (EA) to its order, pointing out that the order stated that the apartment was deregulated "upon the expiration of the existing lease." The EA further explained that the DRA's deregulation order was made contingent upon the expiration of the lease in effect on the date the DRA's deregulation order was issued. In addition, HSTPA was enacted on June 14, 2019, and provided that any unit lawfully deregulated prior to June 14, 2019, would remain deregulated. The EA further noted that, if a rent-stabilized lease should have been in effect on the date the DRA's deregulation order was issued, the apartment remains subject to the Rent Stabilization Law and, pursuant to HSTPA, isn't deregulated. Here, tenant's renewal lease expired after June 14, 2019.

Landlord appealed the EA and lost. Among other things, landlord argued that the April 2020 court decision in Regina Metropolitan v. DHCR prohibited the retroactive application of HSTPA to landlord's 2018 "LD" petition. The DHCR ruled against landlord. The EA merely clarified the DRA's order and was not, as landlord argued, an improper superseding order. And the DRA's order specifically conditioned deregulation upon the expiration of an existing lease, and didn't say the apartment was immediately deregulated.

So, since HSTPA repealed high-rent/high-income deregulation prospectively, the EA correctly applied HSTPA to now prevent deregulation of tenant's apartment. The EA didn't change the terms of the Oct. 19, 2018, order, which conditioned deregulation on the expiration of a current lease. And the Regina court decision concerning retroactive application of HSTPA amendments applied only to certain rent overcharge provisions.

160 East 84th Street Associates, LLC: DHCR Adm. Rev. Docket No. HV410255RO (7/24/20) [7-pg. doc.]