Landlord Can Discontinue Preferential Rent After Renewal Lease Expires

Tenant complained of a rent overcharge because landlord renewed his lease and charged a guidelines increase based on the legal regulated rent, not the preferential rent stated in tenant's vacancy lease. The DRA ruled for tenant and ordered landlord to base rent increases on the preferential rent. Landlord appealed, arguing that the lease stated that the renewal rent didn't have to be based on the preferential rent. The DHCR ruled against landlord because the statement in tenant's vacancy lease limiting the preferential rent to the vacancy lease term wasn't repeated in each renewal lease, and the vacancy lease didn't give the reason for the preferential rent. Landlord appealed in court, claiming that the DHCR's decision was unreasonable. The court sent the case back to the DHCR for further processing. The DHCR ruled for landlord. While the case was pending after it was sent back, the Rent Stabilization Law was amended to give landlords the option of renewing a rent-stabilized lease based on either the legal rent or the preferential rent, if there was one. So landlord was no longer required to show the reason for the preferential rent or restate its limit in each renewal lease.

2765 Kingsbridge Terr. LLC: DHCR Adm. Rev. Dckt. No. RH610011RP (10/1/03) [3-pg. doc.]