Month-to-Month Tenant Didn't Pay Preferential Rent

Rent-stabilized tenant complained of a rent overcharge. Landlord claimed that tenant had paid a preferential rent and that landlord wasn't required to renew tenant's rent on this basis. The DRA ruled for tenant. On the base date in June 2003, tenant had no written lease and paid $550 per month. Landlord properly charged tenant $572 under a two-year renewal lease in 2004. From June to December 2006, tenant had no lease and was charged $572. But landlord improperly offered tenant a renewal lease in January 2007 at a rent based on a higher rent than tenant paid. Landlord appealed, claiming that tenant owed thousands of dollars in back rent. Landlord claimed that a preferential rent was established by the 2004 renewal lease.
The DHCR ruled against landlord. Whether tenant owed back rent was irrelevant to whether there was a preferential rent. Tenant had no written lease on the January 2003 base date. Since there was no lease on that date, landlord can't prove a higher legal rent was previously established by a written lease. The base rent of $550 was the legal regulated rent, and the legal regulated rent under tenant's subsequent renewal lease was $572. Tenant's new rent must be based on $572, not any higher amount.

Fairweather: DHCR Adm. Rev. Docket No. VK210042RO (7/10/08) [2-pg. doc.]