DHCR Upholds Rent Paid at Time of Foreclosure Sale

Landlord asked the DHCR to determine the legal rent of tenant's apartment after purchasing the building in a foreclosure sale. Landlord acknowledged receiving a rent ledger listing tenant's monthly rent as $250. But landlord claimed that this information was unreliable because it received no leases or other rent history documentation and the DHCR's rent registration records didn't list tenant as the named tenant for 2004 through 2006. Landlord also claimed that several tenants took it upon themselves to occupy various apartments while the building was in foreclosure. The DHCR ruled against landlord, upheld the $250 rent, and found that tenant had lived in the apartment since 1991.

Landlord filed an Article 78 court appeal, claiming that the DHCR's decision was arbitrary and unreasonable. Landlord argued that the DHCR didn't fairly process landlord's application or require sufficient documentation from tenant. Landlord also claimed that the DHCR should have set a fair rent for tenant's apartment.

The court ruled against landlord. Landlord submitted no records to the DHCR that indicated that the legal rent was more than $250. The DHCR made no mistake in not setting an "equitable" rent since landlord did receive rent records in the foreclosure sale. The DHCR's decision was reasonable based on the available facts.

Clarendon Properties v. DHCR: Index No. 8898/2012, NYLJ No. 1202620313050 (Sup. Ct. Kings; 9/13/13; Lewis, J)