Prior DHCR Finding of Vacancy Deregulation Revoked

Tenant complained in January 2017 of rent overcharge and fraudulent deregulation of his apartment. The DRA ruled against tenant in January 2018. The DRA applied the default method to the claim since landlord didn't submit proof that the apartment was high-rent deregulated in 2004. But the DRA found that the base date rent was $3,908 per month under the default method and the unit had been deregulated in 2004. Tenant requested reconsideration based on an irregularity in a vital matter. The DRA reopened the case and considered additional proof and arguments.

The DRA again ruled against tenant, finding that the last rent-stabilized tenant of the apartment moved out in June 2003. Landlord then made improvements to the unit costing more than $50,000. This brought the legal rent up above the $2,000 vacancy deregulation threshold then in effect.

Tenant appealed, and the DHCR again reopened the case. Tenant showed that there were significant contrary accounts concerning how much landlord paid for IAIs and that landlord, at best, paid less than $44,560 for IAIs. Therefore, the apartment couldn't have been deregulated. The DRA must determine which, if any, of the 2003 IAIs were legitimate, what the legal rent was as of June 2004, and what applicable rent increases applied from June 2004 to the present. Landlord had claimed that it was entitled to set a first rent in 2003 because it had created a new apartment by adding space from the cellar below. But records showed that the cellar space was combined with a different apartment, not tenant's unit. The DHCR also ruled that since the last rent-stabilized rent for the unit was $757 in 2003, landlord couldn't collect more than that amount from the first rent payment date of its PAR decision through the effective date of the DRA's order upon remand.

Kranzel: DHCR Adm. Rev. Docket No. HQ410022RT (12/3/19) [17 pgs.]