Deregulated Base Date Rent Was Reliable

Tenant complained of rent overcharge. The DRA ruled against tenant. On the Jan. 13, 2008, base rent date, the legal regulated rent for the apartment was $2,000 per month. So when tenant moved into the apartment in December 2010 at a monthly rent of $2,300, the apartment was no longer subject to rent stabilization.

Tenant appealed and lost. Tenant claimed that the last registered rent for the apartment was filed in 2006 and reported an actual rent of $597 per month. Tenant argued that the rent should have remained frozen at that amount. The base date lease with prior tenant also prevented prior tenant from discussing how the lease was negotiated and threatened damages if prior tenant violated that clause. Based on that unusual lease clause, the DRA looked back more than four years and found that the base date rent was reliable. When a vacancy increase and the 1/40th cost of individual apartment improvements was added to the last regulated rent of $780, tenant's vacancy rent was $2,182. Since this rent was more than $2,000, landlord wasn't limited to $2,182 and properly charged tenant a market rent of $2,300. And since the DRA did a rent review that went beyond the four years in order to determine the reliabiity of the base date rent, any non-registration and the base date lease clause didn't matter. Since the DRA found that the base date rent was reliable, it wasn't authorized to use a base rent other than the $2,000.

Berman: DHCR Adm. Rev. Docket No. CS410010RT (3/10/15) [3-pg. doc.]