Landlord's 2019 Deregulation Applications Dismissed Based on HSTPA

Landlord applied separately for high-rent/high-income deregulation of 10 apartments in one building in May 2019. The DRA dismissed those applications in August 2019 based on provisions of HSTPA that repealed deregulation of rent-stabilized and rent-controlled apartments effective June 14, 2019. Landlord appealed each decision, the DHCR consolidated the cases, and ruled against landlord. Landlord argued that the DHCR retroactively applied HSTPA to improperly dismiss the 2019 filing period "LD" applications, and that this was an unconstitutional taking and denial of due process.

The DHCR disagreed. HSTPA took effect immediately on June 14, 2019, and clarified that units that had been lawfully deregulated prior to the law's effective date remained deregulated. But no deregulation orders had been issued for any of the 10 units in question as of HSTPA's effective date, when the law changed to bar the DHCR from ruling to deregulate any apartments. Also, as of June 14, 2019, at least seven of the 10 tenants involved had renewal leases that expired after June 14, 2019. Prior to HSTPA, Rent Stabilization Law Section 26-504.3 conditioned high-rent/high-income deregulation on the expiration of an existing lease. That condition existed when landlord filed its 2019 cycle applications, and several courts had issued decisions interpreting HSTPA as the DHCR did on this point.

Landlord's constitutional claims also failed. There was no "delay" causing a denial in due process since its LD applications were filed just a month before HSTPA took effect. New York's highest court also had noted in the 2020 Regina case that HSTPA Part "D" was "entirely forward-looking" and not retroactive. The DHCR also pointed out that a recent federal court decision in CHIP v. City of New York dismissed landlord's constitutional takings claims against HSTPA. No party has a vested right to any remedy under the RSL and no vested right in the continuation of a particular provision of the law or any DHCR policy or procedure. 

Editor's note: This decision is one of many similar decisions by the DHCR that dismissed LD applications filed in 2019.

BLDG Management Co., Inc.: DHCR Adm. Rev. Docket Nos. HU410034RO et al. (1/11/21) [6-pg. doc.]