Apartment Rented in 1998 After Period of Temporary Exemption Was Rent Stabilized

Tenant complained to the DHCR in 2016 that her apartment had been improperly deregulated and that she was overcharged. The DRA ruled for tenant and found that the unit was subject to rent stabilization. Landlord appealed and lost. Landlord argued that the apartment was temporarily exempt from rent stabilization between 1982 and 1998 while the building super lived there, that landlord was entitled to set a first rent of $2,000 in 1998, and that the unit was lawfully deregulated through high-rent vacancy in either 1998 or 1999. The DHCR noted that, to determine the apartment's regulatory status, the DRA correctly looked past the four-year lookback period applicable to rent overcharge claims. And the apartment didn't become vacancy deregulated after the extended period of temporary exemption under RSC Section 2526.1(a)(3)(iii), as it was in effect before 2014. When landlord set a "first rent" for the apartment after the super moved out in 1998, the RSC required that the rent be stabilized. As ruled by an appeals court in 2021, regardless of whether the first rent was set before or after the 2014 RSC amendments, when a once temporarily exempt apartment returns to the marketplace, it resumes its rent-stabilized status because it was the status it had before the temporary exemption. 

18 W. 88 Realty/SM 18W88 LLC: DHCR Adm. Rev. Docket No. JN410033RO (8/4/21)[9-pg. document]