Termination of Landlord's Luxury Deregulation Application Was Lawful

Landlord applied for high-rent/high-income deregulation of tenant's rent-stabilized apartment in 2013. The DRA ruled against landlord in 2020 because the HSTPA had repealed the provisions of the laws and codes providing for issuance of orders authorizing luxury deregulation.

Landlord appealed and lost. Landlord claimed that application of the HSTPA was unconstitutional and violated landlord's due process rights. Landlord also argued that retroactive application of the HSTPA was unconstitutional because it violated due process and the U.S. Constitution's Takings Clause.

But the DHCR noted that, as of June 14, 2019, tenant's apartment was subject to the Rent Stabilization Law and Code, and therefore could no longer be deregulated. HSTPA amendments to the RSL stated that the law was to "take effect immediately." The DHCR also had no authority to determine the constitutional issues raised by landlord. Still, based on cited case law, the DHCR stated that there was a strong presumption of the constitutionality of the rent laws. And landlord had no vested right in the continuation of a particular provision of the RSL or any policy or procedure followed by the DHCR. Finally, the DHCR was unable to verify tenant's 2011 and 2012 household income while the case was pending because the DTF had no returns on file for those tax years. So, even if deregulation was still permitted, the DHCR could not have deregulated tenant's apartment.

400 E 58 Owner LLC: DHCR Adm. Rev. Docket No. IO410022RO (5/5/22)[3-pg. document]