DHCR Should've Directed Renewal Lease Offer at Guidelines in Effect When Lease Should've Been Offered

Rent-stabilized tenant filed a lease violation complaint with the DHCR, claiming that landlord offered tenant a renewal lease dated Jan. 11, 2021, that didn't include tenant's wife's name and failed to deduct a $72 utility allowance from the legal regulated rent. In response, landlord offered an amended renewal lease offering to add the wife's name but still failing to deduct the utility allowance from the legal rent.

The DRA ruled for tenant, but the tenant filed a PAR, claiming that the DRA incorrectly found that the facts of the case didn't support retroactivity of the rent increase under the required renewal lease offer at a prior, lower, rent guideline. This effectively determined that landlord could offer tenant a renewal lease with rent set at a higher level not permitted under the Rent Guidelines Board Order in place at the time tenant should've been offered a lease. The DHCR denied tenant's PAR. Tenant then filed an Article 78 court appeal, arguing that the DHCR's decision was based on an error of law.

The court ruled for tenant. As the DHCR admitted, the facts didn't support its ruling that retroactivity to a prior guideline was contrary to RSC Section 2523.5(c)(1). Under the Rent Stabilization Code, when a landlord fails to offer a timely renewal lease, the guidelines rate applicable can be no greater than the rate in effect on the commencement date of the lease for which a timely offer should've been made. To this extent, and to this extent only, the DHCR's PAR order was "affected by an error of law." 

Livermen v. Pascal: Index No. 451213/2023, 2024 NY Slip Op 33094(U)(Sup. Ct. NY; 9/4/24; Ally, J)