Landlord Proved Proper Vacancy Deregulation of Apartment in 2005

Tenant complained of rent overcharge and claimed that landlord fraudulently deregulated his apartment. The DRA ruled against tenant and found that the apartment had been properly deregulated before tenant moved in.

Tenant appealed and lost. Tenant argued that the DRA didn't investigate the fraudulent and improper deregulation of the apartment. The DHCR disagreed. Landlord submitted sufficient proof that it spent $57,170 on individual apartment improvements (IAIs). The proof included before-and-after photographs, as well as sworn statements from the flooring, plumbing, and electric contractors who did the work. Performance of, and payment for, the IAIs was sufficient to raise the $692 apartment rent in 2005 above the high-rent vacancy deregulation threshold. Landlord's proof supported the IAIs done 12 years before tenant filed his complaint and eight years before the base date that applied at the time that the complaint was filed.

The Housing Stability and Tenant Protection Act of 2019 (HSTPA) didn't change the outcome of the DRA's decision since the DRA already had reviewed rental events occurring 14 years earlier. And, under HSTPA, apartments that were legally deregulated before June 14, 2019, remain deregulated.

Contrary to tenant's claim, the DRA did consider the case of Grimm v. DHCR in making its finding that there was no fraudulent scheme to deregulate the apartment. The fact that the apartment was registered as deregulated in 2005 but that tenant received a rent-stabilized lease in 2019, 2016, and 2017, didn't create a discrepancy amounting to fraud. Rent stabilization status can't be created by agreement or by error. The unit was properly deregulated in 2005 and properly registered as PE over five years before tenant moved into the apartment.

Schwartzman: DHCR Adm. Rev. Docket No. GQ110075RT (1/6/20) [4-pg. doc.]