Tenant's Corporate Income Not Considered for Deregulation

Landlord applied for high-rent/high-income deregulation of tenant's apartment in 2007. The DRA ruled against landlord after DTF verified that tenant's household income wasn't more than $175,000 in 2005. Landlord appealed, claiming that tenant was quite wealthy, was the director of two corporations involved in a high-end luxury jewelry business, and that tenant's individual income tax returns probably didn't reflect the corporate income from which tenant could be taking periodic draws.
The DHCR ruled against landlord. Rent Stabilization Code Section 2520.11(s) permits high-rent/high-income deregulation only when DTF records show that tenant's household income is more than $175,000 during each of the two prior calendar years before filing. The DHCR is required to rely on the findings reported by DTF. The DHCR can't look at the amounts of tenant's wealth or assets, and isn't authorized to make its own independent determination of what tenant's income is. Landlord's claims concerning tenant's corporate income also was speculation. And the Rent Stabilization Code doesn't allow for the separate inclusion of corporate income in determining the total income of persons occupying tenant's apartment. The DHCR can look only at the reported federal adjusted gross income as verified on personal New York State income tax returns by DTF.

Prominent Assets LLC: DHCR Adm. Rev. Docket No. WH410034RO (12/22/08) [4-pg. doc.]