Initial Rent Set by Court

Tenant filed a fair market rent appeal challenging the first stabilized rent of her apartment. Landlord claimed that the first stabilized rent had already been decided in a court case. Tenant argued that only the DHCR had the authority to decide the fair market rent. The DRA ruled for tenant and landlord appealed. Landlord explained that tenant was an occupant of prior rent-controlled tenant's apartment claiming pass-on rights. Landlord claimed she was a licensee or squatter and sued to evict tenant. In a settlement of the case, they agreed that landlord would accept her as tenant and tenant would accept a rent-stabilized lease at a monthly rent of $1,000. The DHCR ruled for landlord. The courts and the DHCR have the authority to determine lawful stabilized rents. In this case, the court ruled that the initial $1,000 rent was lawful as the result of a bargain. There was a possibility that tenant could have been evicted as a squatter. This court-ordered settlement was reached before tenant's fair market rent appeal was decided. It was a binding determination of the first stabilized rent of tenant's apartment.

76 W. 86th St. Corp.: DHCR Adm. Rev. Dckt. No. IA410076RO (9/20/96) [3-page document]