Preferential Rent Continues Under Lease Agreement

Landlord asked the DHCR to determine if it had to renew rent-stabilized tenant's lease at the preferential rent. Landlord claimed that, under the 2003 amendment to the Rent Stabilization Law, it had the option to discontinue tenant's preferential rent. The DRA ruled for landlord. Tenant appealed, pointing out that his initial 1991 lease stated that the preferential rent would continue for as long as he remained a tenant. Landlord argued that the DHCR couldn't consider the 1991 lease, because it was a rent history document in effect more than four years before landlord filed its application with the DHCR. The DHCR ruled for tenant. Appeals courts in New York have ruled that, if a lease agreement gave tenant a preferential rent for the entire term of his tenancy, the 2003 Rent Stabilization Law change didn't apply. This was because landlord and tenant made a contract to give tenant the preferential rent for the duration of the tenancy. Tenant's 1991 lease was in effect before the 2003 change to the law, and clearly gave tenant the right to renewal rent increases over the preferential rent.

Wallis: DHCR Adm. Rev. Docket No. UD420038RT (2/14/08) [4-pg. doc.]