Income of Remaining Co-Tenant Was Below Deregulation Threshold

Landlord applied for high-rent/high-income deregulation of tenant’s rent-controlled apartment in 2006, after serving an Income Certification Form (ICF) on April 27, 2006. The DHCR ruled against landlord. The tenant, who had lived in the apartment since 1955, moved to an assisted living facility in March 2005 and died there in November 2006. Tenant’s wife became the successor tenant when tenant died. In 2004 and 2005, tenants filed joint federal and state income tax returns indicating adjusted gross incomes of $200,831 in 2004 and $228,823 in 2005. But the DHCR excluded the income of tenant husband from the annual calculation of income for both years because of tenant’s move out of the apartment. The DHCR found that tenant wasn't an occupant of the apartment at the time the ICF was served. Landlord filed an Article 78 appeal against the DHCR, claiming that the DHCR improperly dismissed landlord’s high-rent/high-income deregulation application.

The court ruled against landlord, who appealed and lost. Landlord claimed that the tenant’s income should have been included in evaluation of whether tenant’s household income exceeded the deregulation threshold. But the DHCR rationally apportioned the income of tenant, who no longer occupied the apartment when the ICF was served, and his remaining spouse, to determine that the household income was below the $200,000 deregulation threshold during 2004 and 2005. 

Brookford, LLC v. DHCR: 36 NYS3d 39, 2016 NY Slip Op 05734 (App. Div. 1 Dept.; 8/4/16; Sweeny, JP, Saxe, Moskowitz, Gische, Webber, JJ)