DHCR Must Look Back More Than Four Years

Rent-stabilized tenant complained of rent overcharge in 2013. The base rent date for tenant’s complaint was Dec. 9, 2009. The DRA ruled for tenant, finding some overcharge. Tenant and landlord both appealed. Tenant claimed that her 2007 renewal lease didn’t give notice that she was paying a preferential rent. Landlord claimed that the DRA mistakenly found that tenant paid $1,591 per month under her current renewal lease. The DHCR reopened the case and sent it back to the DRA for further investigation. Generally, the legal regulated rent is the rent charged and collected on the base date. But, under Rent Stabilization Code Section 2521.2, when a preferential rent is at issue, the DRA must pierce the four years to determine whether landlord adequately preserved the higher legal regulated rent. The DRA’s order didn’t look beyond the base date to investigate the validity of the preferential rent. The DRA must look at tenant’s 2007 lease, which was the lease immediately preceding the year when the claimed preferential rent was charged.The DRA must determine whether landlord properly established the higher legal regulated rent stated in the base date lease. 

Morales/Southbridge Partners, LLC: CX210021RT, CV210042RO (4/30/15) [3-pg. doc.]