Landlord Properly Set Rent-Stabilized Rent

Rent-stabilized tenant complained of rent overcharge in 2015. She moved into the apartment in 2011 at a monthly rent of $1,800, following a long period where the apartment had been registered as owner occupied. Tenant claimed that landlord hadn't filed DHCR rent registrations between 1992 and 2012. The DRA ruled against tenant and found that the apartment had been properly registered since the 2011 base rent date.

Tenant appealed, and the DHCR sent the case back for further consideration. Tenant claimed that, under Rent Stabilization Code (RSC) Section 2526.1(g), the default formula should be used to set the rent because the base date rent was unreliable. The DRA again ruled against tenant, finding that RSC Section 2526.1(g) didn't govern the setting of the base date rent because landlord didn't deregulate the apartment when tenant moved in. All rent adjustments following the base date were lawful and there was no overcharge.

Tenant again appealed and lost. Whether landlord's niece was an "immediate" family member had no bearing on the issue of temporary exemption of the apartment from rent stabilization during her occupancy. Here, the important fact was that when landlord's niece occupied the apartment, she didn't pay rent. This qualified the apartment for a temporary exemption (TE) from rent stabilization. Since the apartment was temporarily exempt for at least four years before tenant moved in, landlord could charge tenant an agreed-upon rent under RSC Section 2526.1(a)(3)(iii), which was applicable in July 2011 when tenant moved in. A later code section cited by tenant, requiring the initial rent to be calculated based on the last registered before the TE status, wasn't applicable in this case. The fact that tenant didn't have a vacancy lease also didn't invalidate the first rent charged. 

Fitzgerald: DHCR Adm. Rev. Docket No. HP210028RT (8/26/20) [3-pg. doc.]