Landlord Proved Vacancy Deregulation of Apartment in 2010

Tenant complained to the DHCR of improper apartment deregulation and rent overcharge. The DRA ruled against tenant after reviewing landlord's documentation of individual apartment improvements (IAIs) and conducting an inspection of the unit.

Tenant appealed and lost. The DHCR noted that, when the IAIs were done while the apartment was vacant in 2010, landlord was entitled to a 1/40th rent increase and had submitted proof consistent with DHCR Policy Statement 90-10. At that time, there was no requirement that IAIs be performed by a licensed contractor or that work permits be obtained. The DHCR inspector's verification of work done in the unit supported landlord's claim that it paid $38,000 in cash for the IAIs. Landlord's contractor also submitted a sworn statement describing the work done. And, while the four-year lookback period applied to the pre-HSTPA case, even under the extended review period required for pending matters under HSTPA, no overcharge was found. A longevity increase applied in 2010, contemporaneous apartment registrations confirmed that the prior tenant lived in the unit from 2000 and 2010, and that rent increases during that time were lawful. Since the apartment was deregulated prior to June 14, 2019, it remained deregulated under HSTPA. The lack of a DHCR deregulation rider in tenant's vacancy lease didn't prove fraud, and the absence of the rider didn't render the apartment rent stabilized. 

Sierra v. DHCR: Index No. 152525/2020, 2020 NY Slip Op 34056(U)(Sup. Ct. NY; 12/10/20; Edmead, J)