Comparable Rents Used to Set Base Date Rent After Temporary Exemption

Tenant complained of rent overcharge in 2014. Landlord claimed that the apartment was vacancy-deregulated before tenant moved in. The DRA ruled for tenant and found she was rent stabilized. Landlord appealed and lost. Landlord argued that the DHCR should have bridged the gap as directed by 2014 amendments to the Rent Stabilization Code. The DHCR clarified that the base date rent must be set pursuant to the RSC as it was in effect on the May 2010 base date. The apartment was temporarily exempt from rent stabilization on the base date. So the legal rent was the next rent set when tenant moved in. But, since tenant was treated as deregulated, the base date rent couldn't be established and the DHCR must determine the rent utilizing RSC Section 2522.6 as it was in effect on the base date. So, the base date rent should be set using the average rent of comparable stabilized apartments. Using this method, the base date rent was $1,775. After applying all lawful rent increases to subsequent leases, the total overcharge collected was $77,331, including triple damages and interest.

1159 Dean LLC: DHCR Adm. Rev. Docket No. IO210048RO (12/7/20) [5-pg. doc.]