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CHIP Newsletter Highlights Adam Leitman Bailey, P.C. victory overturning DHCR (Division of Housing & Community Renewal)

DHCR Can’t Reconsider PAR Filed 21 Months Late 

In 2009, an owner filed a petition for the high-rent, highincome deregulation of an Upper West Side apartment, alleging that the tenant’s income exceeded $175,000 during each of the preceding two years; that the legal regulated rent (LRR) was equal to or greater than $2,000 per month; and that the tenant had failed to return the Income Certification Form (ICF). After the tenant failed to respond to multiple followup requests for information, in September 2013 a rent administrator (RA) of the NYS Division of Housing and Community Renewal (DHCR) issued an order deregulating the apartment. Notwithstanding the 35-day deadline under RSC §2529.2 to file a petition for administrative review (PAR), the tenant filed hers in August 2015, arguing “that her income did not exceed the threshold for deregulation and that due to depression she was unable to complete activities of daily life,” including timely returning the ICF and filing the PAR.

After the deputy commissioner (DC) denied the PAR as untimely in 2016, the tenant filed an Article 78 petition to challenge this result. Three months later, the Manhattan Supreme Court (Engoron, J.) granted DHCR’s motion to remand the case to the RA for reconsideration. Three years later, in May 2019, the RA issued a new order “finding the tenant’s household income did not meet the deregulation threshold” and therefore re-regulating the unit. Now the owner filed a PAR, which the DC denied on the basis that Justice Engoron’s order had given the agency license to forgive the tenant’s lengthy delays in returning the ICF and in filing her PAR. The owner filed an Article 78 appeal.

In a withering decision, the Supreme Court (Nervo, J.) scolded DHCR for filing an impermissibly long brief, and for “erroneously appl[ying] the doctrine of law of the case by finding that Justice [Engoron’s] order… amounted to a decision on the merits regarding the acceptance of the tenant’s untimely PAR,” when it “did no such thing.” Since the agency had arbitrarily and capriciously disregarded binding precedent strictly construing the 35-day PAR deadline, the court vacated the 2019 order and re-instated the 2016 order, effectively re-deregulating the apartment [Tremada West End Ave. LLC v. DHCR: Index No. 161200/20, 2021 N.Y. Slip Op. 32204(U) (Sup. Ct., New York, Justice Nervo, 11/8/21)]. Note: The tenant and DHCR have both filed notices of appeal to the Appellate Division, First Department.

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