DHCR Applied Regina Ruling to Overcharge Claim for Apartment in J-51 Building

Tenant complained to the DHCR of rent overcharge and improper deregulation of her apartment. The DRA ruled for tenant and set the lawful stabilized rent at $1,963.81 per month as of March 1, 2022. Tenant appealed and lost. Tenant argued that landlord engaged in a fraudulent scheme to deregulate the apartment, which invalidated the base date rent. The DHCR found that the DRA properly set the base date rent at $1,655 under the Court of Appeals' 2020 ruling in Regina Metro. LLC v. DHCR. This was the lease rent in effect on the four-year base date. There was no fraud related to landlord's deregulation of the apartment while receiving J-51 tax benefits prior to the Regina ruling because landlord relied on the DHCR's interpretation of the law prior to the 2009 court ruling. Landlord also promptly notified tenant in November 2020 that the apartment was rent stabilized. The DHCR found that rent increases collected after that point were lawful. The DHCR also found no colorable claim of fraud under the facts of the case. 

Washington: DHCR Adm. Rev. Docket No. KX410027RT (4/26/23)[5-pg. document]