No Vacancy Deregulation Applied Where Tenant Wasn't Given Lease

Tenant asked the DHCR for a ruling on the rent-regulated status of her apartment. Landlord claimed that the unit had been vacancy-deregulated in 2009 when prior tenant moved out with a legal rent of $1,738.51. Landlord applied a 16 percent vacancy increase under RGBO #40 and argued that the legal rent then exceeded the $2,000 high-rent vacancy deregulation threshold. At that point, in January 2009, landlord charged the next tenant $1,025 per month without giving that tenant a lease. When the complaining tenant moved into the unit in July 2011, landlord charged tenant $1,095 per month, again without a lease. The DRA ruled that the apartment didn't become deregulated in 2009 because landlord didn't give the prior tenants a lease in January 2009. The DRA directed landlord to offer complaining tenant a rent-stabilized lease at a legal regulated rent of $1,738.51 with a preferential rent of $1,095 per month.

Landlord appealed and lost. Rent Stabilization Code Sections 2522.8(a)(1) and (2) provide for a vacancy rent increase to be applied when a tenant is offered a vacancy lease. Since landlord offered no vacancy lease to tenants starting in January 2009, no rent increase could be applied that would put the legal rent over the vacancy deregulation threshold. The DHCR also modified the DRA's order, finding that the legal rent under the lease to be offered to tenant was $1,095, not $1,738.51. 

Fresh Pond Realty Corp.: DHCR Adm. Rev. Docket No. GX110002RO (3/12/21) [3-pg. doc.]