DHCR Properly Rejected Landlord's Comparability Data

Facts: Tenant complained that the first stabilized rent for his apartment was greater than the fair market rent. His monthly rent was over $2,500. The prior rent-controlled tenant last paid $840. Landlord submitted comparability data with its answer to tenant's complaint, showing the rents of other C-line apartments like tenant's and rents of H-line apartments. Still, the DHCR ruled for tenant and reduced the first stabilized rent to $1,200. The DHCR found that landlord didn't submit proof of the rents for all of the C-line apartments; the H-line apartments weren't comparable since they had only four, rather than five, rooms. Landlord didn't submit proof of the rents for all of the H-line apartments and landlord didn't comply with the proof of service requirements showing proper rent registration of apartments claimed to be comparable. Landlord appealed. The court ruled for landlord, finding the DHCR's decision to be unreasonable. The DHCR then appealed. Court: Landlord loses. It was within the DHCR's discretion to decide whether to accept or reject landlord's leases as truly comparable. The DHCR's rejection of the two H-line apartments as not being comparable to tenant's C-line apartment was appropriate. The DHCR wasn't required to accept landlord's self-serving claim that no other C-line apartment was comparable. In addition, the DHCR's refusal to accept landlord's proof of service of the RR-1 form was proper because the form only contained tenant's initials, rather than a full signature. This requirement was rational since it minimized the opportunity for forgery and fraud. Finally, the DHCR had a rational reason for requiring proof of service of the RR-1 and DC-2 forms. Under the Rent Stabilization Code, comparable rents are ìlegal regulated rents.

Parcel 242 Realty v. DHCR: NYLJ, p. 26, col. 6(5/8/95) (App. Div. 1 Dept.; Murphy, PJ, Sullivan, Ellerin, Williams, Mazzerelli, JJ)