Landlord Entitled to First Rent for Newly Created Rent-Stabilized Apartment

Tenant complained to the DHCR of rent overcharge and improper deregulation of his apartment. The DRA ruled for tenant in part, finding that the apartment was subject to rent stabilization but that there was no overcharge. When tenant moved into the newly created unit on June 1, 2011, landlord was entitled to collect a first rent of $1,250 per month based on the alteration of the apartment's outer dimensions before tenant moved in.

Tenant appealed and lost. Landlord demonstrated that it had altered the unit's outer dimensions and was entitled to collect a first rent. No fair market rent appeal was warranted under the law. There also was no proof that tenants had occupied the altered apartment before the complaining tenant moved in. 

Landlord filed an Article 78 court appeal of DHCR's decision. The DHCR agreed to reconsider the PAR decision, took the case back, reaffirmed its prior ruling, and noted that in a separate proceeding, the agency had denied landlord's application for rent stabilization exemption based on claimed substantial rehabilitation of the building. 

Dawson: DHCR Adm. Rev. Docket No. MU410002RP (1/2/25)[2-pg. document]