Landlord Can't Discontinue Preferential Rent

Rent-stabilized tenant complained of a rent overcharge. The DHCR ruled against tenant and found that tenant had been charged preferential rents that landlord could discontinue. Tenant appealed and won after the appeals court sent the case back for reconsideration of the intent of the parties. The DHCR held a hearing. Tenant testified that landlord gave him a preferential rent when he moved in in 1991 in exchange for renovating the apartment at his own expense. Landlord’s employee testified that in 1991 the apartment was in “deplorable” condition, that she was present when landlord and tenant signed the vacancy lease, that tenant said he wanted the preferential rent to last for his entire tenancy, and that landlord orally agreed to this. Landlord testified that the preferential rent was not conditioned on tenant’s renovation of the apartment and that the apartment was rented “as is.” The ALJ found that although the lease rider didn’t contain specific language defining or limiting the duration of the preferential rent, the hearing testimony indicated that there was an intent and agreement for continuation of the preferential rent. Landlord also had renewed tenant’s lease with a preferential rent at least five times before the dispute arose. The case was sent back to the DRA to calculate the amount of any rent overcharge.

Pastreich: DHCR Adm. Rev. Docket No. XD410001RP (4/1/10) [2-pg. doc.]