Landlord Acquired Building in Foreclosure Sale

Rent-stabilized tenant complained of a rent overcharge. The DRA ruled for tenant and found an overcharge, using its default formula. Landlord appealed, claiming that it bought the building during a foreclosure proceeding and therefore wasn't required to produce a full rent history. The DHCR ruled for landlord. Landlord showed that a mortgage lending bank sued prior landlord for foreclosure in January 2009. Landlord then acquired the mortgage, note, and other loan documents by the bank in order to own the building by deed in lieu of foreclosure. Landlord therefore was exempt from proving rents going back to the base date. The case was sent back to the DRA to determine if there was any overcharge.

BNH IV, LLC: DHCR Adm. Rev. Docket No. YH61007RO (5/19/11) [2-pg. doc.]