HSTPA Supersedes Prior Settlement Agreement That Phased Out Tenant's Preferential Rent

Rent-stabilized tenant filed a lease violation complaint with the DHCR in April 2022. His renewal lease commencing May 1, 2021, had listed a legal regulated rent (LRR) of $1,644.07 per month and a preferential rent (PR) of $861.01 per month. His next renewal lease, offered for a term beginning May 1, 2022, listed only the LRR as $1,668.73. Tenant claimed that his monthly PR of $861.01 should be permanent in light of rent stabilization law amendments enacted under HSTPA effective June 14, 2019. Landlord argued that the parties had reached a so-ordered settlement agreement in housing court in 2010. In that agreement, tenant initially paid a PR of $550 starting May 1, 2010. The PR was then subject to annual guideline increases plus $200 incremental increases until it reached the LRR. Once the LRR and PR had reached the same amount, the tenant would pay the legal regulated rent. The DRA agreed with landlord and dismissed tenant's complaint.

Tenant appealed and won. The DHCR found that HSTPA superseded the prior settlement between landlord and tenant. A court decision in another case had reached the same result in 2022. And, even if HSTPA didn't supersede the parties' prior settlement, The PR of $861.01 hadn't reached the level of the LRR and therefore landlord couldn't yet charge the LRR under the terms of the parties' stipulation. Landlord must offer tenant a rent-stabilized renewal lease that includes the PR of $861.01 plus applicable guideline increases. The LRR may also be preserved and increased in future renewal leases but not charged to tenant. 

Ameruso: DHCR Adm. Rev. Docket No. KV410041RT (1/23/23)[2-pg. document]