Landlord Can Collect Court-Approved Rent Hikes for RGBOs 41 and 42 Retroactively

(Decision submitted by Tony Subraj, Vice President of Zara Realty, who represented the owner.)

Rent-stabilized tenant complained of rent overcharge. He claimed that, beginning in May 2014, landlord was seeking to retroactively collect the minimum dollar increases rather than the rent guidelines percentage increases that applied to his December 2008 renewal lease under RGBO No. 40. The minimum dollar increases had been the subject of a court challenge until New York's highest court ruled that the minimum dollar increases were legal. The DRA ruled for tenant, finding that landlord waited too long to collect the minimum dollar increases approved in 2011 in the case of Casado v. Markus. Landlord appealed to the DHCR and lost. The DHCR found that prior landlord and landlord took no action to apply the Casado decision to tenant's rent for three years. Landlord therefore had waived the right to collect the minimum dollar increases from tenant, even if unintentional.

Landlord then filed an Article 78 court appeal and won. There was no proof that prior landlord voluntarily and intentionally waived its right to seek rent increases under RGB Orders 40 and 41 following the Casado court ruling.  Neither the Court nor the Rent Guidelines Board imposed a deadline for seeking retroactive rent increases resulting from the Court’s decision. And, after Casado, the DHCR didn’t issue any rule or notice that would put landlords on notice of a limited time period to seek retroactive rent increases resulting from the Court’s decision. 

Parsons Manor LLC v. DHCR: Index No. 3640/2015 (Sup. Ct. Queens; 9/14/15; Raffaele, J) [7-pg. doc.]