DHCR Sets Rent for New SRO Tenant at $234 per Month

Landlord asked the DHCR to determine the legal rent for tenant's SRO unit after a court ruled that tenant was a rent-stabilized permanent tenant. Tenant had checked into the SRO building in August 2015, paid a daily rate of $39, and then asked for a lease for the hotel-stabilized unit. The DRA applied the regulatory default formula to establish the legal rent but didn't use the lowest comparable registered rent method. The DRA instead used the average rent of the comparable rent-stabilized units in the building at the time tenant moved in. The DRA set tenant's rent at $340.52 per month, which was the average legal rent for rent-stabilized comparable units in the building. Tenant appealed, claiming that this rent was too high. The DHCR ruled for tenant. The default method chosen by the DRA was appropriate, but some of the rent data used by the DRA was inaccurate or unreliable. The DHCR adjusted tenant's monthly legal rent to $233.96 based on the average of reliable rent-stabilized rents in the building.

Ouattara: DHCR Adm. Rev. Docket No. FQ410008RT (7/20/18) [8-pg. doc.]