By Eileen O’Toole, Esq., Contributing Editor
Owners of buildings subject to rent control and rent stabilization laws continue to wait, at this writing, for the DHCR’s issuance of amended Rent Stabilization Code and related rent control regulations. The anticipated amendments are intended to conform the regulations to HSTPA’s 2019 changes to the rent laws, both within and outside New York City. Meanwhile, HSTPA amendments have been applied in some of the recent court and DHCR decisions of interest.
In Stuyvesant Town-Peter Cooper Vil. Tenants’ Assn v. BPP St. Owner LLC (LVT #32436), the court ruled for building complex tenants who sued the landlord in 2020, claiming that HSTPA’s repeal of vacancy and high-rent/high-income deregulation now barred the landlord from deregulating 6,200 apartments, despite a post-Roberts court settlement of individual tenant claims in 2012 and a 2015 HDC regulatory agreement citing the landlord’s right to deregulate units after June 30, 2020, when J-51 tax benefits expired. While the court’s decision could apply to other buildings where apartments were rent stabilized prior to receiving J-51 tax benefits and continued to be stabilized when HSTPA was enacted on June 14, 2019, it may not apply to buildings where J-51 coverage was the only reason that housing accommodations became rent stabilized in the first place.
In Matter of Ameruso (LVT #32425), the DHCR ruled that HSTPA superseded a prior court settlement between a landlord and tenant that had permitted a phase-out of the tenant’s preferential rent. Separately, a court had reached a similar result in another case. Under HSTPA, the Rent Stabilization Law now required continuation of a preferential rent granted to a tenant, with rent guideline increases upon renewal. The 2010 court-approved phase-out now violated the current law.
In Matter of 647 Prospect LLC (LVT #32433), the DHCR pointed out a 2021 court ruling in Renaissance Equity Holdings LLC v. DHCR, and held that a prior, pre-base date overcharge determination could be applied to determine a new rent overcharge complaint. These decisions extended the logic applied by New York’s highest court in Cintron v. Calogero (2010), which held that the DHCR could refer to a long-ignored rent reduction order to determine a subsequent rent reduction claim.
In several recent decisions, the DHCR ruled on long-pending administrative appeals of hardship applications. These infrequently utilized applications can provide owners with some relief where operating costs exceed rental income. In two cases, the DHCR denied comparative hardship applications filed by individual co-op shareholder owners of rent-stabilized units because the law required such applications to be filed by the building’s managing agent on behalf of the cooperative corporation (see Matter of Doukas, Matter of Rosen, LVT #32427).
In two other cases involving hardship rent increases for rent-controlled tenants in co-op or condo buildings, the DHCR modified increases ruled on by the DRA some time ago to properly reflect the assessed building value and to maintain hardship increases granted by the Rent Administrator to make up for the owners’ long-term disqualification from MBR increase collection while the hardship increases were in place (Matter of Bramante, LVT #32428; Matter of Rosenberg/Savitsky, LVT #32429).
Finally, while NY State’s Emergency Rental Assistance Program (ERAP) closed its doors to new applications on Jan. 20, 2023, courts are still deciding landlord requests to vacate ERAP stays in eviction proceedings. A court lifted the ERAP stay in Townsend Ave. Realty Assoc. LLV. v. Henriquez (LVT #32441), where the program was expected to deny a tenant’s second ERAP application for three months of prospective rent after previously approving a prior application for 12 months of back rent. A Westchester County court lifted an ERAP stay where the Section 8 tenant involved was unlikely to receive funds given the program’s rule that applications from subsidized tenants would be processed only after nonsubsidized tenant applications had been determined (Horizon Realty of Mt. Vernon, LLC v. Dabbs, LVT #32442). In another Mt. Vernon case involving a Section 8 tenant, the court partially lifted the stay in connection with additional rent sought outside the 15-month period that ERAP could cover (EG Mt. Vernon Preserv. LP v. Duncan, LVT #32443). And in a Supreme Court action for a money judgment only, the court pointed out that no stay resulted from the tenant’s ERAP application because the landlord was not seeking eviction (36 & 37 Realty, LLC v. Patel, LVT #32445).
