Landlord Can Discontinue Preferential Rent Despite Prior Agreement

Tenant complained of a rent overcharge. Landlord gave tenant a preferential rent under the prior lease. But when tenant renewed his lease, landlord charged him the legal regulated rent. The DRA ruled against tenant, and tenant appealed. Tenant said that he originally moved into the apartment in 1999 as prior tenant's subtenant. In late 1999, he began paying rent directly to landlord, and when he got his own lease in 2001, it was a renewal lease, not a vacancy lease. Landlord then sued to evict tenant. Tenant claimed that when landlord realized that he couldn't win the eviction case, landlord agreed to settle the case by giving tenant a lease in tenant's own name with a preferential rent. So tenant argued that landlord couldn't now change the terms of that agreement by discontinuing the preferential rent. The DHCR ruled against tenant. The ETPA was amended in 2003 to permit landlord to discontinue a preferential rent upon lease renewal. When it agreed to charge a preferential rent, landlord couldn't have intended to give up a right it didn't have under the law in 2001. Landlord was entitled by law to discontinue the preferential rent.

Chibel: DHCR Adm. Rev. Dckt. No. TD410040RT (6/29/05) [2-pg. doc.]