Case Reopened for DHCR to Consider Pre-Base Date Proof of Preferential Rent

Rent-stabilized tenant complained of rent overcharge after landlord discontinued a preferential rent charged to tenant. The DRA ruled against tenant, finding that tenant's base date lease included a legal regulated rent of $1,804 and a preferential rent of $1,419, that individual apartment improvements (IAIs) performed more than four years before tenant filed complaint couldn't be examined, and that tenant's lease rider permitted discontinuation of the preferential rent.

Tenant appealed, and the case was reopened. The DRA should have investigated the pre-base date rent history because there was a preferential rent, pursuant to Rent Stabilization Code Sections 2526.1(a)(2)(viii) and 2521.2.  Since landlord was claiming both a legal regulated rent and a preferential rent in tenant's 2005 vacancy lease, the DRA should now request copies of both that lease and the last lease of prior tenant to determine the legality of tenant's preferential rent. The Rent Stabilization Law doesn't preclude this review. However, contrary to tenant's additional claim, the DHCR found no fraudulent scheme to deregulate the apartment. Tenant didn't raise this claim before the DRA and a pre-base date rent increase alone wasn't an indication of fraud. In this case, there was no attempt to deregulate the apartment and no J-51 tax abatement to consider. 

Fitzsimmons: DHCR Adm. Rev. Docket No. FQ210015RT (3/7/18) [6-pg. doc.]