Apartment Retained by Prior Owner as Tenant Was Subject to Rent Stabilization

Landlord asked the DHCR in March 2017 for a ruling on an apartment's rent regulation status and monthly legal rent. Landlord said it bought the building from tenant in 2010. Tenant lived in the apartment before and after the building sale. The tenant/prior owner didn't register the apartment between 1984 and 1989, and then listed the unit as "temporarily exempt" from 1990 to 2010. Landlord argued that the apartment shouldn't be rent stabilized because the parties didn't intend to create a rent-stabilized tenancy under their contract of sale. Landlord also said the rent should be $2,900 per month based on another apartment with a similar layout.

In response to landlord's application, tenant claimed that they contracted for him to remain in the apartment at $1,000 per month for five years and then to remain rent stabilized. Tenant also agreed to act as the building super for as long as he remained in occupancy. The DRA ruled against landlord, finding that the building was built before 1974, had at least six apartments, and that tenant was entitled to a rent-stabilized lease after the initial five-year agreement period with landlord.

Landlord appealed and lost. Tenant's status as the building super didn't create an exemption from rent stabilization because tenant paid rent. Landlord also had registered the apartment as rent stabilized between 2011 and 2016, but subsequently registered it incorrectly as temporarily exempt. The legal rent remained $1,000 per month until 2015 and was then subject to applicable rent guideline increases. 

178 Freeman LLC: DHCR Adm. Rev. Docket No. IO210044RO (11/18/22)[3-pg. document]