Court Orders DHCR to Permit Lease Renewal Without Discounted Rent Provision

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $338 with interest. The DRA found that tenant's legal rent was $1,425 for the two-year lease term commencing Dec. 1, 2015. Landlord appealed and lost, then filed an Article 78 court appeal. The court vacated the DHCR's PAR decision and sent the case back for recalculation of the legal regulated rent. The court found that landlord could offer tenant the lease renewal without the discounted rent provision. The DHCR had ruled that the discounted rent was a preferential rent and reduced the legal rent upon lease renewal. Upon remand, the DHCR found that the legal regulated rent for the subject renewal lease term was $1,584. Despite the court's ruling, the DHCR noted that its policy and practice was to not allow on-time rent payment discounts and to consider them preferential rents. The DHCR also noted that, under the Housing Stability and Tenant Protection Act, there were limits on late fees and on termination of preferential rents.

Zara Realty Holding Corp.: DHCR Adm. Rev. Docket No. HR110001RP (9/12/19) [3-pg. doc.]