Apartment Was Properly Vacancy Deregulated in 2013

(Decision submitted by attorney Mary D. Milone of the Manhattan law firm of Borah Goldstein Altschuler Nahins & Goidel, P.C., attorneys for the landlord.)

Tenant complained of rent overcharge. Landlord argued that the apartment was deregulated when tenant moved in. The DRA ruled for tenant, finding that, when tenant moved in on Feb. 1, 2015, her monthly rent was $1,750. Prior tenant had last paid $2,188 per month under a lease with a preferential rent that commenced on May 1, 2013, and that rent was subject to a 5 percent vacancy increase. But the fact that landlord charged only $1,750 waived any right it had to a higher rent.

Landlord appealed and won. Landlord claimed that prior tenant's last rent was subject to a vacancy increase of 18.25 percent. Applying that increase yielded a new rent above the vacancy deregulation threshold in effect in 2015. So the DHCR had no jurisdiction over the apartment. The DHCR agreed. The Rent Stabilization Law (RSL) was amended in 2015 to provide that a vacancy allowance of only 5 percent applied when the prior lease offered a preferential rent and commenced less than two years before the next vacancy. But the law limiting the vacancy increase to 5 percent didn't take effect until 2015, which was after the complaining tenant moved into the apartment. So tenant's legal vacancy increase was 18.25 percent, resulting in a legal rent that was over the $2,500 deregulation threshold. The DRA incorrectly applied the 2015 amendment to the RSL retroactively.

Owl Creek Properties, LLC: DHCR Adm. Rev. Docket No. HX610001RK (12/3/20) [2-pg. doc.]