Landlord Can't Seek DHCR Ruling on Rent Regulatory Status of Vacant Apartment

Tenants who moved into an apartment in June 2014 filed a DHCR service reduction complaint in 2017. The DRA ruled for tenants in 2018. Landlord filed a PAR of that order, claiming that the apartment was unregulated. The DHCR ruled against landlord but advised landlord that it could start an "AD" proceeding for a DHCR administrative determination of the apartment's regulatory status.

Landlord then filed the AD application in 2019, claiming that the unit was lawfully deregulated on June 1, 2011, when the legal regulated rent exceeded the $2,000 deregulation threshold then in effect. The DRA requested additional information, seeking the current tenant's name along with a fully executed copy of the current lease. Landlord answered that the apartment was vacant. A copy of the DRA's request, mailed to the last known tenant, was returned to the DHCR by the U.S. Post Office and marked "return to sender vacant unable to forward." In 2021, the DRA terminated the AD proceeding because the apartment was vacant.

Landlord appealed and lost. Landlord argued that the order terminating the proceeding violated its due process and property rights. In response, the DHCR advised landlord to retain its rental history records and be prepared to submit them in the event that the rent was challenged by a tenant of the apartment. The DHCR stated that, unless the amount of the rent charged was challenged, it wasn't required to issue an order concerning the legality of the rent charged. Without a tenant in possession, the matter of the apartment's regulatory status wasn't "ripe" for a determination because "there lacked a justiciable controversy."  The DHCR also said that, "in the absence of an actual controversy with a tenant, any potential injury to the owner is speculative." The DHCR also noted that the PAR order in the service reduction case "was not a directive or a requirement that the owner file an AD application, but merely advised the owner that they 'may' file for an AD proceeding to determine the regulatory status."

157 Broadway Associates LLC: DHCR Adm. Rev. Docket No. JS410002RO (11/10/22)[4-pg. document]