Ministerial-Only Amendment Rule Upheld: DHCR’s Discretion under RSC §2528.3(c)

Introduction

In Matter of LL 410 E. 78th St. LLC v. Division of Housing & Community Renewal (2025 NYSlipOp 01672), the New York Court of Appeals considered whether the Rent Stabilization Code (“RSC”) permits DHCR to limit owner amendments to past registrations for rent-stabilized apartments and, if so, whether those limits are permissible. Petitioner LL 410 East 78th Street LLC sought to withdraw and re-file its 2016 and 2017 registration statements to reflect that Unit 1B had been permanently deregulated in 2002 rather than temporarily exempt as a superintendent’s apartment. DHCR denied the amendment on the ground that only “ministerial” corrections (clerical or typographical errors) are permitted under RSC §2528.3(c). The trial court and Appellate Division affirmed; a sharply divided Court of Appeals granted deference to DHCR’s interpretation and upheld the denial.

Summary of the Judgment

The Court of Appeals, in an opinion by Judge Singas, held that:

DHCR’s interpretation of RSC §2528.3(c) is entitled to substantial deference because it reflects the agency’s expertise in administering the rent stabilization scheme (citing Matter of Murphy v. NYS Div. of Hous. & Comm. Renewal, 21 NY3d 649).
The 2014 amendment to the RSC granted DHCR discretionary authority “to review and regulate” applications to amend prior-year registrations, without defining “propriety” of an amendment.
DHCR rationally exercised that discretion by limiting permissible amendments to ministerial matters—clerical or typographical fixes—and excluding substantive changes that would require reconstructing an apartment’s full regulatory history or its permanent deregulation status.
Denying petitioner's request safeguards tenants from fraud, preserves agency resources, and ensures substantive disputes over rent-stabilization status are litigated through proper adversarial proceedings rather than summary registration amendments.
The petition was arbitrary and capricious? No—the Court found DHCR’s regulation and its application here both reasonable and supported by record and rulemaking history.

Analysis

Precedents Cited

Matter of Murphy (21 NY3d 649 [2013]) – Established that DHCR’s interpretation of its own regulations deserves “considerable deference.”
Andryeyeva (33 NY3d 152 [2019]) – Reinforced that courts defer when an agency has authored and implemented its regulatory scheme, absent irrationality.
Matter of Peckham (12 NY3d 424 [2009]) – Defined “arbitrary and capricious” as without sound basis or regard for the facts.
Matter of Ward (20 NY3d 1042 [2013]) – Held that a rational basis suffices even if an alternative reasonable outcome exists.
Raritan Dev. Corp. v. Silva (91 NY2d 98 [1997]) and Visiting Nurse Serv. (5 NY3d 499 [2005]) – Demonstrated limits on deference when an agency’s reading conflicts with plain text.

Legal Reasoning

Under the Rent Stabilization Law (“RSL”), DHCR must annually register each rent-stabilized apartment but the statute is silent on amendments. In 2014, DHCR adopted RSC §2528.3(c) to fill that gap, authorizing owners to apply to amend prior registrations “to establish the propriety of such amendment.” Neither the RSL nor the RSC defined “propriety,” leaving DHCR broad discretion. The rulemaking record shows DHCR’s concern that unregulated retroactive amendments had “corrupted” the registration database and fostered fraud. Accordingly, DHCR limited permissible amendments to “ministerial issues such as clerical errors, misspellings, or incorrect lease terms,” precluding any application that would remove an apartment from stabilized status or require re-calculation of rental history.

The Court found this limiting principle rational: correcting a superintendent-exemption classification to a permanent deregulation would demand full inquiry into the apartment’s 2002 vacancy decontrol—an intensive legal and factual investigation well beyond ministerial scope. Such substantive inquiries belong in a contested-case format under RSC Part 2527 or a landlord-tenant overcharge/status proceeding, not in streamlined amendment applications.

Impact

This decision cements DHCR’s authority to police amendment applications and ensures that:

Owners may only use the amendment route for clerical fixes, preserving the contemporaneous integrity of the rent-registration database;
Substantive disputes over deregulation, rent history, or legal regulated rent must proceed through adversarial processes with notice to tenants;
DHCR’s resources are conserved by avoiding back-dated, resource-intensive reviews outside of formal adjudications;
Tenants are protected from unilateral landlord rewrites of regulatory history without proper hearing or notice.

Future litigants will face a clear threshold: if an amendment calls for more than a typo fix, DHCR can, and likely will, summarily deny the application and direct owners to pursue hearings or court actions.

Complex Concepts Simplified

Rent-Stabilized Registration: An annual filing by landlords listing each rent-stabilized apartment, its rent, tenants, and exemption status.
Ministerial vs. Substantive Amendment: Ministerial = clerical/typographical correction; Substantive = any change affecting an apartment’s legal rent or stabilized status.
High-Rent Vacancy Decontrol: Former statutory provision allowing permanent removal from rent stabilization when a rent exceeded a threshold upon vacancy (eliminated post-2019 HSTPA).
DHCR Deference: Courts generally uphold an agency’s interpretation of its own unambiguous rule unless it is irrational or conflicts with the rule’s plain text.

Conclusion

Matter of LL 410 E. 78th St. LLC confirms DHCR’s broad discretion under RSC §2528.3(c) to limit amendment applications to ministerial corrections. By upholding this ministerial-only amendment rule, the Court preserved the integrity of the rent-stabilization registration system, protected tenants against retroactive rewrites, and channeled substantive challenges into formal adversarial proceedings. This precedent will guide owners, tenants, and DHCR in delimiting the scope of administrative registration amendments versus contested-case adjudications in the rent-stabilization arena.