Tenant Apportioned Income of Husband in Nursing Home

Landlord applied in 2006 for high-rent/high-income deregulation of tenant's rent-controlled apartment. The DHCR ruled against landlord. Tenant had apportioned the income reported on joint tax returns filed by her and her husband for 2004 and 2005, based on her claim that her husband moved permanently to a nursing home in March 2005. Based on that apportionment, tenant listed her total annual household income as below the income deregulation threshold in effect. The DHCR ruled for tenant and dismissed landlord's petition. Landlord filed an Article 78 petition, claiming that the DHCR's decision was arbitrary and unreasonable.

The court ruled against landlord, who appealed further. The Appellate Division granted the DHCR's request to take the case back for further review. The DHCR again ruled against landlord, who again filed an Article 78 appeal. The court and appeals court ruled against landlord, finding that the DHCR properly excluded the income of tenant's husband from the total annual household income for the years in question. 

Landlord then appealed to New York's highest court, which ruled against landlord. The court found that the DHCR properly excluded the husband's income from the calculation of total annual household income because he didn't occupy the apartment when landlord sent tenant the Income Certification Form in early 2006. One judge dissented, finding that the court strained to reach a "fair" result by allowing tenant to manipulate the tax filing verification process to decrease their stated income below the statutory threshold. In this case, the DHCR looked beyond the adjusted gross income reported on tenant's state income tax returns to examine extrinsic, confidential tax information provided by tenant. It wasn't entitled to do so.

Brookford, LLC v. DHCR: 2018 NY Slip Op 04381, 2018 WL 2974438 (Ct. App. NY; 6/14/18; DiFiore, CJ, Feinman, Rivera, Stein, Fahey, WIlson, Garcia [dissenting], JJ