Landlord's Preferential Rent Rider Was Invalid
LVT Number: #31554
Landlord sued to evict rent-stabilized tenant for failure to renew his lease. In answer to the holdover petition, tenant claimed that landlord induced him to sign a lease rider several months after he signed his vacancy lease. The lease rider set a higher legal regulated rent than the amount listed in the vacancy lease. The rider set forth both a higher legal regulated rent and a preferential rent, but tenant's vacancy lease made no mention of a preferential rent. So tenant claimed that the rent offered in the renewal lease, which was based on the lease rider, constituted an illegal rent overcharge.
Before landlord started the eviction proceeding, tenant had filed a rent overcharge complaint with the DHCR. The DRA denied the complaint in 2017, and the DHCR denied tenant's PAR in 2018. Tenant then filed an Article 78 court appeal of the DHCR's decision, and the court ordered the case sent back to the DHCR for further action after the DHCR admitted that the DRA failed to address the question of whether the lease rider was proper.
Landlord appealed that decision, and the appeals court upheld the remand of the overcharge proceeding to the DHCR. But while tenant's PAR was pending, the trial court in the eviction case rejected landlord's claim that the DHCR order precluded the housing court from ruling on whether the lease rider was proper. The trial court ruled that the lease rider wasn't incorporated into the vacancy lease, so landlord couldn't rely on it for the legal regulated rent. The eviction proceeding was dismissed.
Landlord appealed and lost. The appeals court pointed out that, since the DHCR had admitted that it didn't properly address tenant's overcharge claim and that case had been sent back to the agency, it didn't need to address that issue. And, since landlord didn't set forth both a preferential rent and legal regulated rent in tenant's vacancy lease, the later lease rider wasn't valid.
Hillside Park 168 v. Khan: Index No. 2018-2399QC, 2021 NY Slip Op 50635(U)(App. T. 2 Dept.; 7/2/21; Weston, JP, Elliot, Toussaint, JJ)