Explanatory Addendum to 2018 Deregulation Order Was Valid

Landlord applied for high-rent/high-income deregulation of tenants' rent-stabilized apartment in 2010. The DRA didn't issue a deregulation order for landlord until February 2018, based on the DRA's finding that tenants' admission that their total annual income exceeded $175,000 in 2008 and 2009. In September 2020, the DRA issued an Explanatory Addendum (EA), which clarified that the apartment would be deregulated only after the renewal lease in effect when the deregulation order was issued expired. Since that renewal lease expired after June 14, 2019, when the HSTPA provisions ending deregulation became effective, tenants' apartment couldn't be deregulated.

Landlord appealed the EA and lost, then filed an Article 78 petition claiming that the EA was arbitrary and unreasonable. The court ruled against landlord. High-income deregulation orders became effective on the date an apartment's lease expired, not on the date that the deregulation order was issued. Because the lease for the apartment in effect when the deregulation order was issued didn't expire until July 31, 2019, the February 2018 deregulation order didn't effect a deregulation before HSTPA went into effect. 

W. 79th LLC v. DHCR: Index No. 158833/2020, 2021 NY Slip Op 31709(U)(Sup. Ct. NY; 5/19/21; Edmead, J)