Default Procedure Properly Applied

Tenant complained of a rent overcharge. Landlord was unable to submit a full rent history. The DRA made a finding of rent overcharge and calculated tenant's rent using a standard formula established under its default procedure. Landlord appealed, claiming that the default procedure was unfair. The DHCR dismissed landlord's PAR. Since 1985, the DHCR has used the lowest registered rent for an apartment with the same number of rooms in the building as one of the criteria for establishing a rent under default procedures. Previously, the DHCR had looked only at rents in the same line of apartments. The change in the procedure was justified because it gives the DHCR a larger survey of comparably-sized apartments. The use of just one line of apartments increases the possibility that the apartment selected was one for which landlord has charged an illegal rent, especially if the line contains few apartments. Also, in some cases there may not be a full line of apartments. And use of all same-sized apartments in the building saves the DHCR from relying on landlord's designation of a line where landlord has failed to maintain complete rent records. Landlord itself had claimed in other cases that its former employees falsified rent records.

[Pan Am Equities: DHCR Adm. Rev. Dckt. No. DJ 410377-RO (11/16/92)]. 6-page document.