Explanatory Addenda to 2018 Deregulation Order Points to Unit's Continued Rent Stabilization

Landlord applied for high-income rent deregulation of tenant's rent-stabilized apartment in 2018. Tenants had admitted in their 2018 Income Certification Form (ICF) that their total annual household income was more than $200,000 in both 2016 and 2017. Their $2,700 legal regulated rent also was over the rent deregulation threshold. The DRA ruled for landlord in October 2018.

Later, in September 2019, the DRA sent landlord an Explanatory Addenda (EA) based on provisions of the Housing Stability and Tenant Protection Act of 2019 (HSTPA). HSTPA repealed high-rent/high-income apartment deregulation effective June 14, 2019. So, if the lease in effect in October 2018 when the DRA's deregulation order was issued expired before June 14, 2019, tenant's apartment was deregulated. But if the lease in effect in October 2018 expired on or after June 14, 2019, tenant's apartment remained rent stabilized pursuant to HSTPA.

Landlord appealed the Explanatory Addenda and lost. The DHCR rejected landlord's claim that there was deliberate or negligent delay in the DRA's disposition of landlord's 2018 LD application, which was filed on May 10, 2018, sent to tenants on Sept. 5, 2018, and decided by the DRA on Oct. 17, 2018.  Landlord's further claim that the EA impermissibly reregulated the apartment was misplaced. The EA wasn't based on any new findings or determinations by the DHCR and didn't change the DRA's order, but merely informed the parties of the applicability of HSTPA and clarified the effect of the DRA's order on apartment deregulation. And the DRA's order specifically conditioned deregulation upon "the expiration of the existing lease." The apartment wasn't immediately deregulated when the DRA order was issued. HSTPA specified that "if an apartment remains rent regulated on or after June 14, 2019, then that apartment is no longer subject to the statutory provisions of high-rent/high income deregulation."

350 CPW Associates, LLC: DHCR Adm. Rev. Docket No. HV4100250RO (8/6/20) [7-pg. doc.]