Pending Rent Overcharge Appeal Now Subject to Six-Year Base Date

Tenant complained of rent overcharge. After some prior determination and PAR remand order, the DRA ruled against tenant in January 2019. The DRA found that landlord proved the installation of individual apartment improvements (IAIs) costing $29,255. And, since the apartment had been owner-occupied for an extended period, the monthly base date rent was set at $1,687. This was the average rent of comparable apartments in the building on the base date (four years before the complaint was filed). The DRA also found landlord was entitled to a vacancy increase. The legal regulated rent therefore exceeded the $2,500 high-rent vacancy deregulation threshold in effect on April 1, 2012, when tenant moved in. Therefore, the apartment was deregulated and the overcharge complaint was denied.

Tenant appealed, and the case was reopened. The DRA used the rent registered for tenant's apartment as one of the "comparable" rents in its calculation of the legal regulated rent. This was an error since the rent registered at a time the subject apartment was temporarily exempt isn't a comparable rent that can be used in the calculation of the unit's legal regulation rent. In addition, tenant's PAR was pending on June 14, 2019, when the Housing Stability and Tenant Protection Act (HSTPA) went into effect. The amended Rent Stabilization Law applies to pending cases, so the case must be sent back to the DRA for recalculation using a six-year rather than a four-year base date. Further fact-finding must also determine whether, under the six-year rule, the apartment is subject to rent stabilization.

Kane: DHCR Adm. Rev. Docket No. HN210006RT (11/7/19) [3-pg. doc.]