First Tenant After Base Date Vacancy Was Rent Stabilized

On March 31, 2011, tenant complained to the DHCR of rent overcharge and claimed that his apartment was improperly deregulated. Tenant moved into the apartment in April 2007 at a stated monthly rent of $2,000 and a reduced rent of $1,700. Tenant claimed that the $2,000 rent amount was illusory. The apartment had been registered with the DHCR as exempt until 2002 because it was owner- or employee-occupied. It was then registered as rent stabilized to another tenant at $1,480 from April 1, 2002, until March 31, 2004. But new landlord amended the rent registration in late 2006 to reflect that the tenant who paid $1,480 actually lived in a different apartment and that the subject apartment had been vacant for more than four years when complaining tenant moved in. The DRA and DHCR ruled that tenant's initial legal registered rent was $1,700 but found no rent overcharge.

Tenant then filed an Article 78 court appeal and lost. Under former Rent Stabilization Code Section 2526.1(a)(3)(iii), when an apartment is vacant on the base rent date, the legal rent is the first rent agreed upon by the landlord and the first rent-stabilized tenant taking occupancy after the vacancy. Tenant claimed that this provision shouldn't apply because new landlord tried to treat tenant as an unregulated tenant. But, under the terms of the lease, the parties agreed to an actual rent of $1,700, which is a lawful stabilized rent. There also was no evidence in this case of any scheme to defraud the tenant.

Cipolla v. DHCR: 153 A.D.3d 920, 2017 NY Slip Op 06364 (App. Div. 2 Dept.; 8/30/17; Dillon, JP, Hinds-Radix, LaSalle, Connolly, JJ)