DRA Used Wrong MCR to Calculate Rent

Tenant filed a fair market rent appeal. The DRA ruled for tenant. Landlord appealed, claiming that the DRA used the wrong maximum collectible rent (MCR) to calculate the fair market rent. The DHCR ruled for landlord. The DRA should have used the 1990 MCR, rather than the 1989 MCR. Special Guideline 21 was in effect when tenant moved into the apartment in August 1990, and it provided for a special guideline that was the greater of 45 percent above the MCR last charged to tenant of the unit or 25 percent above the 1988-89 MBR as it existed or would have existed. DHCR records indicated that landlord was eligible to collect the 1990 MBR increases for the apartment on Jan. 1, 1990, but that the 1990-91 MBR Order of Eligibility wasn't issued until after the prior rent-controlled tenant had moved out in May 1990. So landlord could collect the 1990 MCR effective Jan. 1, 1990 when the rent-controlled tenant was still in the apartment. The 1990 MCR must be considered the last MCR charged to the rent-controlled tenant. So the DRA must use the 1990 MCR to calculate the fair market rent.

Koppel's Realty Corp.: DHCR Adm. Rev. Dckt. No. ML410063RO (2/11/00) [4-pg. doc.]