Insufficient Proof of Prior Vacancy Deregulation

Tenant complained that landlord didn't offer him a rent-stabilized renewal lease. The DRA ruled for tenant and ordered landlord to renew the lease. Landlord appealed and claimed that the apartment wasn’t rent stabilized because prior tenant’s last lease provided for a rent of $2,075 per month in 2003.

The DHCR ruled against landlord, finding that it couldn’t investigate the 2003 rent because the claimed deregulation occurred years before the base date in this case. Landlord then filed an Article 78 court appeal, claiming that the DHCR’s decision was unreasonable. The DHCR took the case back for reconsideration. Landlord then argued that, since the apartment was vacant or temporarily exempt from 1991 to 2003, landlord was entitled to charge the first tenant thereafter a negotiated rent greater than the high-rent deregulation threshold. Landlord also argued that the four-year rule didn’t apply to a determination of rent regulation status, and that any failure to file an exit registration wasn’t a bar to deregulation.

The DHCR again ruled against landlord. Rent Stabilization Code Section 2520.11(r) exempts from rent stabilization apartments that became or become vacant on or after June 19, 1997, but before June 24, 2011, with a monthly legal regulated rent of $2,000 or more. In Gordon v. 305 Riverside Corp., the Appellate Division held that such rent, even in excess of the deregulation threshold, wouldn’t result in deregulation. And while landlord claimed that prior tenant’s 2003 rent was $2,075, the rent was registered for that tenant in 2005 as $1,000. The DHCR rejected landlord’s unsupported claim that prior tenant paid additional rent beyond $1,000 in cash. Landlord charged the complaining tenant $1,000 per month in May 2009. And, while the 2014 Rent Stabilization Code amendments would allow the DHCR to look at rent history prior to 2003 to file gaps, there was no need to apply this new regulation in this case since the case law prior to 2014 compels a result different from landlord’s claims.

285 Madison Realty LLC: DHCR Adm. Rev. Docket No. DS410004RP (2/24/17) [4-pg. doc.]