DHCR Must Reconsider Legal Rent for Apartment Temporarily Exempt on Base Date

Tenant asked the DHCR to determine the rent-regulated status of his apartment. Tenant moved into the apartment on Aug. 1, 2013, under a vacancy lease at $2,750 per month. The vacancy lease didn't say whether the apartment was rent stabilized, but landlord later gave tenant two rent-stabilized renewal leases. The DRA found that the apartment was rent stabilized, reduced tenant's initial rent to $1,754, and ordered landlord to refund a rent overcharge with interest.

Landlord appealed and won, in part. The apartment was temporarily exempt from rent stabilization on the base rent date four years before tenant's complaint was filed. So, the DRA correctly relied on amended Rent Stabilization Code Section 2526.1(a)(3)(iii), issued on Jan. 8, 2014, to determine the legal regulated rent in response to the complaint filed on June 15, 2015. The DRA calculated this rent by applying two-year renewal lease increases to a prior rent-stabilized rent. But the DRA didn't give landlord the chance to submit proof of individual apartment improvements (IAIs) made to the apartment, so the case was reopened and sent back to the DRA for further consideration. And, since tenant claimed that the apartment was rented to tenants unaffiliated to the temporarily exempt tenant, the DRA must also consider whether the apartment reverted to rent stabilization prior to the 2013 base date.

Goodtree Development LLC: DHCR Adm. Rev. Docket No. EW210044RO (6/2/17) [6-pg. doc.]