Fire-Damaged Building Converted to Professional Use

(Opinion letter submitted by Hadassah S. Kwestel, of the Hewlett, N.Y., law firm of Pennisi Daniels & Norelli, LLP, attorneys for the landlord.) Rents in landlord's building were reduced to $1.00 per month by a rent reduction order after a fire in the building forced tenants to move out. Landlord asked the DHCR if a rent restoration application was necessary in the following circumstances. One apartment in the building was now rented as a professional space. Another apartment had now been divided into two new apartments. In an opinion letter, the DHCR stated that rent restoration applications weren't needed in these instances, assuming the prior rent-stabilized tenants hadn't returned. A professional unit was temporarily exempt from rent stabilization for as long as it wasn't rented as a residential unit. And since the two new apartments didn't exist before the fire, rent restoration didn't apply. Landlord was entitled to collect first rents for these apartments.

DHCR Opin. Ltr. by Charles Goldstein (3/19/01) [3-pg. doc.]