Default Formula Improperly Applied

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant, using the DHCR's default formula because landlord submitted no base date lease. The DRA ordered landlord to refund $98,715, including interest and triple damages, minus $7,000 previously refunded. Landlord appealed and the case was sent back to the DRA for reconsideration. Landlord showed that the apartment was vacant on the base rent date since this was after prior tenant vacated and before complaining tenant moved in. The default formula doesn't apply to situations where the apartment is vacant on the base date. The rent instead should be calculated based on Rent Stabilization Code Section 2526.1(a)(3)(iii), which permits the DHCR to consider a pre-base date rent. So the DRA must recalculate the base rent and conduct any further processing that is appropriate. Tenant's rent will remain at the level set by the DRA pending a new ruling, but the overcharge refund is stayed.

2315 Walton LLC: DHCR Adm. Rev. Docket No. EU610070RO (6/2/17) [4-pg. doc.]