Landlord Must Base Renewal Increase on Preferential Rent

Rent-stabilized tenant complained that landlord offered him an improper renewal lease. The DRA ruled for tenant. Since landlord failed to include a higher legal regulated rent in tenant's vacancy lease, the new rents offered in tenant's renewal lease had to be based on the lower rent contained in the vacancy lease. Landlord appealed and lost. Landlord argued that the DHCR didn't apply the law in effect at the time tenant's vacancy lease was signed. But Rent Stabilization Code Section 2521.2(b) was amended in January 2014 to provide that the legal regulated rent as well as the preferential rent must be set forth in the vacancy or renewal lease to which a preferential rent is charged. Rent Stabilization Code provisions also stated that the code could be amended at any time in accordance with law and that such amendments or revocations would be effected at the time of filing with the state. A DHCR ruling would be made in accordance with the amended code provision unless it caused undue hardship or prejudice. Landlord's inability to collect in the future a rent that it never charged tenant didn't create an undue hardship. The 2014 code amendment was properly applied retroactively.

Yakel Corp.: DHCR Adm. Rev. Docket No. FT210049RO (4/25/18) [5-pg. doc.]