Landlord Can't Prove Building Exempt Due to Substantial Rehab

Landlord requested a ruling from the DHCR in 2015 concerning a building's rent regulation status, and claimed that the building had been substantially rehabilitated in 2000. The DRA ruled against landlord, finding that the building was constructed prior to Jan. 1, 1974, contained six dwelling units, and that the legal rent for each unit effective April 1, 2004, was $783 per month based on comparable rents for four-room apartments in the 11233 ZIP code for the year 2004 when the apartments were last registered. The DRA also ruled that the rents were frozen since the units were improperly deregulated and no rent registrations had been filed.

Landlord appealed and lost. While landlord had submitted various documents to the DRA, they were insufficient to indicate whether the building was substantially rehabbed in accordance with DHCR guidelines. Also, there was no record of landlord filing a request for an Owner Exemption Determination (UC). The DRA also properly applied Rent Stabilization Code Section 2522.6(b)(2) to set the rents using comparability data. The building appeared to have been improperly deregulated. Landlord registered the building as exempt in 2001, 2003, and 2004. And it failed to register the building from 2005 to 2017, without DHCR approval. Landlord also claimed that the last legal regulated rent for the building was $975 in 2004 but failed to submit any leases to substantiate this claim. The DRA correctly used an averaging of rents by way of its sampling method.

Maraj Management LLC: DHCR Adm. Rev. Docket No. FP210033RO (9/10/21)[3-pg. document]