DHCR Sets Rent for Permanent Tenant in SRO Building

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 2015, paid a daily rate of $39, and then asked for a lease for the hotel-stabilized unit. The DRA set tenant's rent at $340.52 per month, which was the average legal rent for comparable rent-stabilized units in the building.

Tenant appealed, and the DHCR reduced the monthly rent to $233.96 based on the average of reliable rent-stabilized rents in the building. Tenant then filed an Article 78 court appeal, and the court sent the case back to the DHCR for reconsideration.

The DHCR then ruled for tenant in part, and reduced his monthly rent to $228.61 per month because one unit included in the DHCR's prior calculations wasn't includable because it wasn't comparable to tenant's smaller unit. Otherwise, the DHCR properly calculated tenant's legal rent. The unit was temporarily exempt on the base date and no prior rent-stabilized tenants had occupied it. Rent Stabilization Code Sections 2522.6(b)(2) and (b)(3)(iv) provided a sampling method for determining the legal regulated rent when the legal regulated rent or other facts were in dispute, in doubt, not known, or where the legal regulated rent must be fixed. There were four options for doing the calculations, and the RA correctly used the fourth option since the lowest rent registered in the building wasn't comparable and was inappropriate since that rent was set by agreement between landlord and another tenant where that tenant wasn't required to pay rent for the remainder of his tenancy. Here, tenant's rent was now set using the average of three comparable rooms in the building.

Ouattara: DHCR Adm. Rev. Docket No. FQ410008RT (3/26/21) [3-pg. doc.]