DHCR Uses Default Method to Calculate Base Date Rent

Tenant complained of rent overcharge in 2012. Tenant moved into his apartment in May 2011 under a one-year, unregulated lease at $1,400 per month. No DHCR rent registrations were filed between 1984 and 2009. In 2011, landlord registered the apartment as exempt. In 2013, landlord filed an amended registration for 2010 also indicating that the apartment was exempt. Landlord claimed that it bought the building vacant in 2007 and performed individual apartment improvements that raised the legal rent for the apartment to over $2,000 per month. Landlord failed to submit additional rent history documentation requested by the DHCR. The DRA ruled for tenant and ordered landlord to refund $11,500, including triple damages. Tenant’s initial rent was reduced to $1,189, using the DHCR’s second default method.

Landlord appealed and lost. Landlord failed to produce the September 2008 base date lease and rental history for the apartment. Landlord’s claim that the apartment was owner occupied before Nov. 15, 2007, and thereby exempt from rent stabilization was irrelevant to the apartment’s status on the base date. If owner occupied at one time, that created only a temporary exemption. If the apartment was vacant or temporarily exempt on the base date, the DRA may examine the rental history of the apartment prior to the base date to determine the legal regulated rent. Landlord submitted no documentation and the DHCR wouldn’t consider any additional leases submitted for the first time on appeal. The DRA also properly imposed triple damages.

Zackmaxie, LLC: DHCR Adm. Rev. Docket No. DT210053RO (11/3/15) [6-pg. doc.]