Addition of Fifth and Sixth Apartments After 1974 Made Building Subject to Rent Stabilization

Tenant asked the DHCR for a ruling on her regulatory status, claiming that she was subject to rent stabilization. The DRA ruled for tenant and set her legal regulated rent at $1,190. The DRA found that: (a) the building was built before 1974; (b) although the legal permissible use of the building was four dwellings and two stores as early as 1920, the building currently contained at least six individual dwelling units; (c) the building apparently became subject to rent stabilization on May 3, 2013, since two HPD violations were issued on that date for the two additional apartments constructed in the building; (d) the addition of the two new apartments by 2013 increased the total number of apartments in the building to six; and (e) the legal regulated rent was set by by documenting the first rent charged for the lease term beginning July 1, 2014, and applying all applicable rent guideline board increases. The DRA directed landlord to offer tenant a rent-stabilized renewal lease.

Landlord and tenant both appealed. Both contested the DRA's calculation of the apartment's legal regulated rent. The DHCR agreed with landlord that this administrative proceeding had been based only on tenant's claim concerning her regulatory status. So, the DRA wasn't authorized to determine the legal rent and possible rent overcharge in this proceeding and that portion of the ruling was stricken. Otherwise, the DRA's ruling was correct. Landlord and tenant each contested the assigned May 3, 2013, base date. But the DRA reasonably relied on available HPD documentation indicating that as a correct base date. It was also well established by case law that the addition of a sixth housing accommodation to a building before 1974 made the entire building subject to rent stabilization regardless of the date the addition took place.

Jupiter I LLC/Sanchez: DHCR Adm. Rev. Docket Nos. JQ210025RO, JQ210007RT, JQ210012RO, JP210041RT (1/12/24)[2 6-pg. documents]