Tenant's Household Income Exceeded Deregulation Threshold

Landlord filed a high-rent/high-income deregulation application for tenant's rent-stabilized apartment in 2004. Landlord claimed that the legal regulated rent for the apartment was $2,000 or more per month and requested verification of the annual household income for 2002 and 2003 to establish whether it exceeded $175,000 for each year. Tenant initially stated that an additional apartment occupant lived there as his primary residence but later claimed he did not, and didn't submit any income verification information for the occupant. Landlord in response argued that the occupant did primarily reside in the apartment. The DRA ruled against landlord, finding that tenant's income was below the deregulation threshold and that the roommate was "not an occupant of the apartment for Luxury Decontrol purposes."

Landlord appealed and won. The DHCR reopened the case and considered the roommate's income after seeking a tax match with DTF. Tenant tried unsuccessfully to get a court order barring the DHCR from doing so. The DRA and later the DHCR found that, although the occupant had moved out for a while due to difficulties in his relationship with tenant, the relevant date for determining whether the occupant lived in the apartment for purposes of luxury decontrol was March 16, 2004, the date that the income certification form was served. It didn't matter where the occupant lived in 2002.

Tenant then appealed, claiming that the DHCR's decision was arbitrary and unreasonable. The court ruled against tenant. The DHCR's decision was reasonable, and tenant's household income exceeded the deregulation threshold.

Power v. DHCR: 40 Misc.3d 1201(A), 2012 NY Slip Op 50995(U) (Sup. Ct. NY; 6/13/13; Kern, J)