Rent Reduction Order Prevents Deregulation

Landlord applied in 2006 for high-rent/high-income deregulation of tenant's rent-stabilized apartment. Tenant admitted in her answer that her annual household income was above $175,000 in 2004 and 2005. However, in 2008, the DRA ruled against landlord because tenant's rent had been reduced to less than $2,000 per month since the time that landlord sent the Income Certification Form (ICF) to tenant in April 2006. Landlord appealed, the DHCR reopened the case, and the DRA deregulated the apartment based on tenant's admission of high income. Tenant then appealed, claiming that the apartment didn't qualify for high-rent/high-income deregulation.
The DHCR ruled for tenant. Tenant's apartment was subject to deregulation if the legal rent was $2,000 or more per month in April 2006, when the ICF was delivered. But in a separate proceeding where tenants complained of a reduction in building-wide services, a rent reduction had been ordered in 2008. Under the rent reduction order, tenant's rent was reduced from $2,135 to $1,987 effective as of March 1, 2006. Therefore, the rent reduction was in effect at the time the ICF was served and tenant's apartment was ineligible for high-rent/high-income deregulation.

322 West 57th Street: DHCR Adm. Rev. Docket No. XB410017RT (5/13/09) [4-pg. doc.]