Legal Rent After Temporary Exemption Based on Regs at Time Tenant Moved In

Former tenant complained of rent overcharge for the period between June 15, 2012, and Oct. 31, 2013. The DRA ruled for tenant, based on a DHCR rent reduction order that was in effect during tenant's occupancy. The DRA ruled that tenant's legal regulated rent was $629 and the collectible rent was $425 under the rent reduction order. The DHCR denied landlord's PAR. Landlord then filed an Article 78 court appeal and argued that the DHCR's decision was arbitrary and unreasonable.

The court sent the case back to the DHCR for reconsideration. Landlord claimed that it never received the DHCR's rent reduction order, but the DHCR rejected this claim, finding it not credible. But the DHCR agreed with landlord's claim that the DRA improperly set the apartment's legal regulated rent. The DHCR should have applied Rent Stabilization Code (RSC) Section 2526.1(a)(3)(iii) as it existed in June 2012 when tenant moved in following a period of apartment vacancy. Instead, the DRA had applied the version of that RSC section as amended in 2014. In 2018, a court had ruled that in such a case the legal regulated rent should be based on the amount agreed to by landlord and tenant. So the apartment's legal regulated rent was $2,500 per month while tenant lived there. Still, the collectible rent for tenant's apartment while she lived there was $425, based on the rent reduction order and prior registered rent.

Cabrini Blockfront, LLC: DHCR Adm. Rev. Docket No. GV410008RP (1/6/20) [4-pg. doc.]