No Overcharge to First Tenant After Base Date Vacancy

Tenant complained that his deregulated apartment was in fact rent stabilized and that he had been overcharged. The DRA ruled for tenant in part and found that: (1) the apartment was rent stabilized; (2) it was vacant on the base rent date; (3) the legal regulated rent was $1,700, which was the first rent charged after the vacancy; and (4) there was no rent overcharge. Tenant appealed and lost. Tenant claimed that landlord committed fraud and that the DRA should have used the default method to set the rent. The DHCR disagreed, finding that the circumstances didn't warrant application of the factors that lead to a fraud investigation. First, landlord's registration of the apartment as exempt indicated a mistake, not fraud. Also, in the past, landlord could set a first rent where, as here, the apartment was vacant on the base rent date. Landlord also showed that tenant's apartment was vacant on the base rent date. Landlord's mistaken reference to the tenant of apartment 2L in the registration statements for apartment 1L between 2004 and 2006 also was a mistake, not an indicator of fraud. Landlord lawfully set tenant's first rent as $1,700, and there was no overcharge.

Cipolla: DHCR Adm. Rev. Docket No. BM210016RT (10/20/14) [4-pg. doc.]