DHCR Sets Rents for Apartments Based on Unique Circumstances

Landlord rented two apartments, one above the other, to tenant for a combined rent of $550 per month. Landlord later sought to increase tenant’s rent, and tenant complained of rent overcharge. Tenant also claimed fraud. Landlord claimed that the two apartments were combined and that combined rent should be $2,090 per month based on the average market rent. Landlord also claimed that one of the units previously was rent controlled and that it was entitled to set an initial legal regulated rent. The DRA found that there were two apartments and set the rent for each at $647 per month. Both sides appealed and lost. Based on the unusual circumstances, the DRA reasonably set the legal rent for each apartment at an amount equal to the lowest rent in 2003 of a comparable apartment in the building. There was no proof of a fraudulent scheme to deregulate apartments. The issues in this case concerned whether the apartments constituted one or two units, and the rent regulatory status of a tenant that landlord claimed had been an employee. 

Berlin/M&E Christopher LLC: DHCR Adm. Rev. Docket Nos. BW410004RT, BW410006RO (3/25/15) [5-pg. doc.]