Landlord Didn't Prove There Was a Preferential Rent

Rent-stabilized tenant complained of rent overcharge. The DHCR ruled for tenant, and landlord filed an Article 78 appeal of the DHCR's final decision. The court ruled against landlord, who appealed and lost. The DHCR's interpretation of Rent Stabilization Code Section 2521.2, requiring that the legal regulated rent be stated in each lease from the inception of a claimed preferential rent in order to be legally established and preserved, wasn't irrational or unreasonable. The DHCR also rationally concluded that it was permitted to review leases and rental history records prior to the four-year lookback period in order to establish whether the rent charged was in fact a preferential rent. In this case, the DHCR rationally found that landlord didn't preserve the higher claimed legal regulated rent because it didn't include it in tenant's vacancy lease or two subsequent renewal leases. The DHCR's additional interpretation of RSC Section 2527.7, to find that the setting of the unit's legal regulated rent didn't result in undue hardship to the landlord, also was rational.

West 147 & 150, LLC v. DHCR: 137 N.Y.S.3d 686, 2021 NY Slip Op 00537 (App. Div. 1 Dept.; 2/2/21; Renwick JP, Webber, Gonzalez, Scarpulla, JJ)