2024 NY Slip Op 06377
The New York Court of Appeals held that the Housing Stability and Tenant Protection Act of 2019 (HSTPA), which repealed luxury deregulation, applied prospectively to apartments where the existing leases had not expired before the effective date of the repeal, even if deregulation orders had been issued prior to the repeal.
Summary
The case involved a dispute over the application of the HSTPA to apartments that had previously received luxury deregulation orders under prior law but whose leases had not yet expired when the HSTPA took effect. The landlord argued that because deregulation orders were issued before the HSTPA’s effective date, the apartments should be exempt from rent stabilization. However, DHCR argued, and the Court of Appeals agreed, that the HSTPA’s repeal of luxury deregulation applied to apartments where the lease expiration fell after the effective date of the repeal, thus those apartments remained rent stabilized. The Court reasoned that the deregulation was not complete until the lease expired.
Facts
The landlord owned apartment buildings in Manhattan that had obtained luxury deregulation orders prior to the passage of the HSTPA. However, the tenants’ leases in those apartments extended beyond the June 14, 2019 effective date of the HSTPA, which repealed luxury deregulation. DHCR issued an addenda stating apartments would only deregulate if their leases expired before the HSTPA’s effective date. The landlord sued, arguing that this constituted an improper retroactive application of the HSTPA and that the delay in processing the application should have entitled the landlord to deregulation before the repeal. The Supreme Court and Appellate Division sided with DHCR.
Procedural History
The landlord commenced a proceeding in Supreme Court seeking to reinstate a deregulation order and annul DHCR’s addenda. The Supreme Court dismissed the proceeding, and the Appellate Division affirmed. The New York Court of Appeals granted leave to appeal from the portion of the Appellate Division’s order affirming the dismissal of the proceeding.
Issue(s)
1. Whether DHCR properly interpreted the HSTPA as prospectively repealing luxury deregulation for apartments where the lease had not yet expired when the HSTPA took effect.
2. Whether DHCR’s alleged delay in adjudicating the landlord’s luxury deregulation applications justified the application of pre-HSTPA law.
Holding
1. Yes, because the HSTPA’s repeal of luxury deregulation applied to any unit where the lease had not expired before the HSTPA’s effective date.
2. No, because the landlord did not demonstrate willful or negligent delay by DHCR, nor did the statutory timeframes for processing the application compel a different result.
Court’s Reasoning
The Court of Appeals focused on statutory interpretation, finding that the HSTPA repealed the statutory basis for luxury deregulation. The Court determined that the language of the HSTPA unambiguously indicated that deregulation would cease and the apartments needed to be deregulated before the act became effective, which was not the case for the landlord’s properties. The Court emphasized that the HSTPA explicitly stated that