DHCR Increases Rent-Controlled Tenant's Rent Based on Unique and Peculiar Circumstances

Landlord asked the DHCR for a ruling on an apartment's rent regulatory status and, if needed, the legal rent. The DRA found that the apartment was subject to the rent control law with a maximum base rent (MBR) of $140.75 and a maximum collectible rent (MCR) of $77.40. 

The landlord appealed, and won in part.  Section 2202.7 of the NYC Rent and Eviction Regulations permits the DHCR to grant an appropriate rent increase based on "unique and peculiar circumstances." The MBR and MCR reported by the DRA in this case were set by the Office of Rent Control in 1972. In response to landlord's prior inquiry, that office mistakenly advised the landlord in 1998 that tenant's apartment was exempt from rent control. In light of landlord's good faith effort to determine the apartment's rent and since the parties operated outside of the regulatory system for decades, the DHCR is authorized to establish the MCR and MBR using an appropriate method based on the equities involved.

So the DHCR deemed an MBR rent increase as if landlord had applied for one in 2017. The DHCR set the apartment's MBR and MCR at $1,136.56 effective Jan. 31, 2018. These rent amounts would remain at that level until landlord successfully entered the MBR system. Any future rent adjustments shall be set forth in agency orders.

Gordon: DHCR Adm. Rev. Docket No. GN420019RO (4/7/23)[5-pg. document]