DHCR Denies Comparative Hardship Applications Filed by Individual Co-op Unit Owners

In two similar cases, the DHCR addressed applications by individual shareholder-tenants who sought comparative hardship rent increases for rent-stabilized apartments that each individual held in their respective cooperative buildings.

In Rosen, the DRA denied the application in 2010 because it wasn't filed by the managing agent on behalf of the cooperative corporation and all proprietary lessees, including the co-op conversion sponsor. On appeal, the owner of the unsold shares of the rent-stabilized apartment in question argued that it made no sense for management to file the application because the co-op board gained no benefit from filing the hardship application on his behalf. 

The DHCR pointed out that RSC Section 2522.4(b) permitted owners to collect a comparative hardship rent increase if the owner hadn't been able to maintain the same average annual net income in a current three-year period when compared with the average annual net income during a three-year base period. But, in a cooperatively owned building, the DHCR required such application to be filed by a managing agent on behalf of the co-op corporation and all proprietary lessees with financial information submitted for the entire building. Here, the application wasn't filed by the managing agent and was incorrectly based on data related to only one apartment. The application failed to include relevant financial information including building-wide operating expenses incurred by the co-op corporation.

In Doukas, a similar result was reached under ETPA Section 2502.4(c) in connection with a New Rochelle apartment. Again, the application was denied in 2006 because it wasn't filed by the co-op corporation's managing agent and because it was incorrectly filed on a DHCR comparative hardship form for NYC buildings instead of the applicable ETPA form. Under the ETPR, the comparison period was five years rather than three years. 

Doukas: DHCR Adm. Rev. Docket No. UJ910057RO (1/10/23)[2-pg. document]; Rosen: DHCR Adm. Rev. Docket No. YL110029RO (1/10/23)[2-pg. document]