Landlord & Tenant Law

In landlord’s article 78 proceeding challenging DHCR’s interpretation of the Housing Stability and Tenant Protection Act (HSTPA), landlord appealed from Supreme Court’s affirmance of Supreme Court’s dismissal of the proceeding. The Court of Appeals affirmed, holding that DHCR’s interpretation of the statute with regard to luxury deregulation had a rational basis.
In 2019, the state legislature enacted the HSTPA, which ended luxury deregulation for rent-stabilized apartments. A cleanup bill provided that the act would take effect immediately, but that any unit that was lawfully deregulated prior to June 14, 2019 would remain deregulated. Landlord in this case owned apartment buildings that obtained luxury deregulation orders before the HSPA for tenants with leases that expired after the statute took effect. DHCR concluded that the apartments did not become deregulated because the leases did not expire until after the HSTPA became effective. Landlord challenged the interpretation, but lost at Supreme Court and the Appellate Division.

In affirming, the Court of Appeals held that even though DHCR was statutorily mandated to issue an order of deregulation before enactment of the HSTPA, the order did not immediately deregulate the apartment, because even under prior law, the apartment did not become deregulated until the expiration of the lease in effect when the deregulation order was issued. The court also rejected landlord’s argument that the apartments would have been deregulated before enactment of HSTPA but for DHCR’s negligent delay in processing landlord’s application for luxury deregulation. The court declined to infer willfulness or negligence from lengthy processing times.