No Overcharge Where Base Rent Set by HPD After Building's Exit from Mitchell-Lama

Tenant complained of rent overcharge. The DRA ruled for tenant. Landlord appealed and won. Landlord showed that the building previously was subject to the Mitchell-Lama program but exited that program in early 2016. The building then transitioned to rent stabilization in Jan. 2016. The apartment was initially registered with the DHCR at that time. Under DHCR Advisory Opinion 91-2 (AO 91-2) and Title 28 of the Rules of NYC, the rules for setting a legal rent following Mitchell-Lama status are set forth. Tenant's monthly rent was $1,444.52 when the building exited Mitchell-Lama. This represented 150 percent of the apartment rent, based on tenant's failure to file income affidavits in 2014 and 2015. The rent amount also was listed in the Regulatory Agreement between landlord and HPD that was signed after the building exited the Mitchell-Lama program. The DHCR can't overturn the rent amount set by HPD under that agreement.

Atlantic Towers Assoc LP: DHCR Adm. Rev. Docket No. GV210038RO (8/5/19) [5-pg. doc.]