Landlord Must File DHCR Form RS-3 for Sub Rehab Exemption Ruling

Tenant applied to the DHCR for a ruling on the regulatory status of her apartment by filing a letter on Nov. 5, 2020. Tenant claimed that there was a pending eviction proceeding against her where landlord claimed that the building was exempt from rent stabilization due to a substantial rehabilitation and the parties had agreed to have the DHCR determine the issue of her apartment status. In March 2021, the DRA sent landlord and tenant a Notice of Commencement of Administrative Proceeding and asked landlord to submit any and all proof of the tenant's regulatory status and the rental history for the apartment. Landlord answered that the building had been "gut renovated" in 1983 and submitted a copy of a 1983 Certificate of Occupancy. The DRA also sent an inspector to the building.

In March 2022, the DRA terminated the proceeding and stated that landlord could file DHCR Form RS-3 for a determination of whether the building was exempt based on substantial rehabilitation. The DRA's order also advised tenant that she could file a rent overcharge complaint and renewal lease complaint with the DHCR if the facts so warranted. Landlord appealed and argued that the DRA should have ruled on the sub rehab issue in the proceeding that it terminated.

The DHCR ruled against landlord. Landlord raised the sub rehab claim in response to tenant's application for an administrative determination, and the landlord's exemption claim had the potential to affect other tenants in the building. So all tenants should be a part of any proceeding concerning the building's regulatory status, and the DRA correctly advised landlord to file a Form RS-3 for a ruling on whether the building was exempt from rent stabilization based on substantial rehabilitation. 

Beck Street LLC: DHCR Adm. Rev. Docket No. KP610018RO (11/3/23)[4-pg. document]