DHCR Set MCR for Rent-Controlled Tenant at Actual Rent Paid in 2019

Tenant asked the DHCR to determine her apartment's legal rent after the Housing Court ruled that tenant was a rent-controlled successor tenant. The DRA ruled that the Maximum Collectible Rent (MCR) for the apartment in 2019 was $1,524 per month.

Tenant appealed and lost. Tenant claimed that the apartment's legal rent should be either the rent paid for comparable units when her apartment was first rented as rent controlled in 1965, or the rent charged to the tenant in 1985 under a lease where landlord recognized her as a successor tenant. Instead the DRA had set the MCR at the actual rent charged as of April 2018.

The DHCR found that the DRA properly set the MCI by considering the equities. Courts had ruled in prior cases that the DHCR could establish an appropriate present-day rent at the actual rent willingly paid by a tenant occupying a rent-controlled unit that had been the subject of a good-faith dispute as to its rent-regulatory status. The use of $1,524 as a present-day monthly rent also was more favorable to the tenant than updating the $650 rent charged under tenant's 1985 vacancy lease. In addition, there were no other rent-controlled apartments in the small building involved and a comparability study of rents of other regulated apartments in the surrounding area wouldn't be useful to establish an appropriate present-day maximum rent for this apartment. 

Sobel: DHCR Adm. Rev. Docket No. JO120002RT (4/14/23)[5-pg. document]