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Are DHCR's New Regulations Unconstitutional?

BY David Feuerstein
May 02, 2014

On Feb. 24, 2014, the Rent Stabilization Association, Community Housing Improvement Program, and certain property owners filed a lawsuit in the New York State Supreme Court challenging the constitutionality of the numerous amendments that the Division of Housing and Community Renewal (DHCR) promulgated to the Rent Stabilization Code (RSC) and Tenant Protection Regulations (TPR) on Jan. 8, 2014. In particular, the lawsuit challenges: 1) the creation and codification of the Tenant Protection Unit (TPU), an entity that is supposed to “proactively” enforce the rent-stabilization laws and regulations; and 2) various other amendments to the RSC and TPR (collectively, the “Regulations”) on the grounds that the newly enacted amendments conflict with the rent-stabilization laws codified by the New York City Council in 1969 and New York State Legislature in 1974 and/or constitute a violation of the separation of powers doctrine.

The 'Four-Year Rule'

DHCR's amendments to the “Four-Year Rule” (i.e., the four-year statute of limitations on actions concerning the overpayment of rent) provide an excellent example of how the plaintiffs claim that the amendments offend their constitutional rights. Indeed, the rent=stabilization laws make clear that: 1) owners of rent regulated properties (“Rent Regulated Owners) do not have to maintain records that are more than four years old; and 2) in the event there is an overcharge proceeding, neither the tenant nor DHCR is able to examine the rental histories, or challenge the validity of legal rents of properly filed rent registrations, beyond the statutory four-year period.

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