Landlord Could Charge First Rent After Renovation

Facts: Tenant complained of a rent overcharge. After living in his four-bedroom apartment for 20 years, he was forced to move out for two years because of a fire in the building. His monthly rent at the time was $430. Landlord completely renovated the building and allowed tenant to move back into a smaller, reconfigured apartment. Landlord charged tenant a preferential rent of $750 per month. The DHCR ruled against tenant. Tenant challenged the DHCR's ruling in court and won. The DHCR appealed. Court: The DHCR wins. Since landlord altered tenant's apartment to the extent that it no longer existed, landlord was permitted to charge a first rent for the newly created apartment that tenant moved back into. The DHCR's finding that there was no overcharge was rational.

Fernandez v. DHCR: NYLJ, 1/20/04, p. 24, col. 2 (App. Div. 1 Dept.; Buckley, PJ, Mazzarelli, Andrias, Sullivan, Marlow, JJ)