Landlord Didn't List Higher Legal Rent and Preferential Rent in Leases

Tenant complained of rent overcharge. The DRA ruled for tenant, finding that the monthly base date rent was $1,530, which was the amount charged and paid by tenant four years before filing his complaint. Landlord waived any claimed higher legal regulated rent on that date because tenant's vacancy lease and later renewal leases stated only one rent with no mention of a preferential rent.

Landlord appealed and lost. Landlord claimed that the base date legal regulated rent was $2,725, that tenant paid a preferential rent of $1,530, and that the base date lease submitted to the DRA contained both rent amounts. While the apartment was mistakenly treated as deregulated during the receipt of J-51 benefits until 2010, landlord recalculated the legal regulated rent and established the higher rent on the base date. Landlord argued that the DRA should have reviewed rent history records from prior to the base date. But, under Rent Stabilization Code Section 2521.2, as amended effective Jan. 8,  2014, the legal regulated rent must be stated in each lease from the inception of the preferential rent to be legally established and preserved. In this case, none of tenant's leases or renewals from the inception of his tenancy in 2004 until the base date renewal lease of Oct. 1, 2010, stated a purported higher legal regulated rent. The fact that the vacancy lease and later renewals weren't rent stabilized doesn't qualify as stating or preserving a specific legal regulated rent. So the DRA reasonably set the legal regulated rent at $1,530. The DHCR also found no undue hardship or prejudice to landlord from application of the amended Rent Stabilization Code provision. [Download PDF of decision here.]

Sixth Lenox Terrace Assoc.: DHCR Adm. Rev. Docket No. EX410050RO (6/30/17) [6-pg. doc.]