Tenant Should Have Been Given Renewal Lease Before HSTPA Enacted

Landlord applied in 2016 for high-rent/high-income deregulation of tenant's apartment. The DRA ruled for landlord in April 2019 based on tax verification information from the NYS Dept. of Taxation and Finance (DTF) that tenant's total annual household income was over $200,000 in 2014 and 2015. In September 2019, the DRA sent landlord an Explanatory Addenda (EA) to the deregulation order, which stated that if tenant's lease in effect when the order was issued didn't expire until after June 14, 2019, when HSTPA abolished luxury deregulation, tenant would remain rent stabilized. Tenant appealed the deregulation order, and landlord appealed the EA.

The DHCR combined the two appeals, and ruled for tenant. Tenant's last renewal lease expired on Feb. 28, 2019. But, under Rent Stabilization Code Section 2523.5(a), landlord was required to renew tenant's lease at that time, notwithstanding the pending deregulation application. That renewal lease should've commenced on Feb. 28, 2020, and would've run for at least one year until Feb. 28, 2021. So, under the plain language of HSTPA, such renewal lease would have been in effect on June 14, 2019, when luxury deregulation was prospectively abolished.

Landlord argued that the retroactive provisions of HSTPA violated landlord's due process rights under the Constitution. The DHCR pointed out that the EA wasn't based on any new findings or determinations by the DHCR but merely informed the parties of the applicability of HSTPA and clarified instances already in effect by law that would limit the deregulation order. The EA wasn't a superseding order and didn't revoke the deregulation order. And since a rent-stabilized lease should've been in effect when the DRA's deregulation order was issued, the apartment remained rent stabilized. Contrary to landlord's claim, the April 2020 decision of New York's highest court in Matter of Regina Metropolitan applied only to rent overcharge matters and not to luxury deregulation cases. The apartment wasn't deregulated when the deregulation order was issued and, under HSTPA, any unit lawfully deregulated before June 14, 2019, remained deregulated.

Slater/SP 41 Park LLC: DHCR Adm. Rev. Docket Nos. HQ410033RT, HV410270RO (10/6/20) [8-pg. doc.]