Landlord Can Collect Vacancy Increase Despite Rent Reduction Order

Facts: Many years before tenant moved in, the DHCR reduced the apartment's rent to $300 under a buildingwide rent reduction order, effective July 1, 1987. In 1999, the apartment became vacant, and landlord renovated it before renting to tenant. Tenant's rent was $1,300 per month. Tenant later learned about the prior rent reduction order and withheld rent, claiming an overcharge. Landlord then sued to evict tenant for nonpayment of rent. Tenant asked the court to dismiss the case, claiming that landlord was barred from collecting any rent increase based on apartment improvements while the DHCR's rent reduction order was in effect. Court: Tenant wins in part. Landlord was barred by Rent Stabilization Code provisions from collecting any 1/40th increase for improvements made after the rent reduction order was issued and as long as it remained in effect. But landlord was permitted under the code to collect a vacancy increase when tenant moved into the apartment, since it is a statutory rent increase, rather than a guidelines increase.

IG Second Generation Partners LP v. Young: NYLJ, 5/1/02, p. 22, col. 6 (Civ. Ct. NY; Elsner, J)