Default Formula Applied to Calculate Legal Rent

Tenant complained of rent overcharge. The DRA ruled for tenant and set the monthly legal regulated rent at $710, using the DHCR’s default formula. Landlord appealed and lost. Landlord had submitted a base date lease to the DRA. But it wasn’t credible. The lease wasn’t signed by either party and didn’t indicate that it was rent stabilized. The lease also didn’t include a rent stabilization rider explaining to the tenant how the rent was calculated. Rent Stabilization Code Section 2526.1(g) permits the use of the DHCR’s default formula to calculate the base date rent where either the rent charged on the base date can’t be determined, a full rental history from the base date isn’t provided, or the base date rent is the product of a fraudulent scheme to deregulate the apartment. Since landlord failed to provide a full rent history, the DRA properly set the base rent as the complaining tenant’s initial rent minus a vacancy increase. This produced a lower rent than the other two default options, which were the lowest stabilized rent for the same sized apartment in the same building or the last rent paid by the prior tenant. 

Santiago Realty LLC: DHCR Adm. Rev. Docket No. CN110008RO (3/3/15) [4-pg. doc.]