Prior Mortgage Agreement Didn't Prevent Rent Stabilization Coverage After Rent-Controlled Tenant Vacated

In 2016, tenant asked the DHCR for an administrative determination (AD) that his apartment was subject to rent stabilization. Tenant complained that landlord claimed the apartment was rent controlled. The DRA ruled for tenant, finding that the apartment was subject to rent stabilization.

Landlord appealed and lost. Landlord argued that there was a June 30, 1969, mortgage agreement between prior landlord and the City of New York which stated that "rent control regulations remained in effect regardless of the change in occupancy" and that the agreement required all new renters to be subject to rent control. The DHCR noted that rent stabilization coverage is a statutory right and cannot be created by waiver or estoppel. The language in the mortgage agreement covered what was required for an apartment to remain rent controlled. But to be rent controlled, a tenant or tenant's lawful successor must have been living in the unit continuously since before July 1, 1971. Landlord's building was built in 1951 and contained 21 apartments. RSC Section 2520.11(c) outlines exemptions from rent stabilization and states as an exemption, "housing accommodations for which rentals are fixed by the DHCR or HPD, unless, after the establishment of initial rents, the housing accommodations are made subject to the RSL pursuant to applicable law[.]" DHCR records show that a rent-controlled tenant lived in the apartment in 1972 but that he later moved out and the complaining tenant moved into the unit in 1980 following a vacancy. Tenant therefore was rent stabilized.

Crown Heights Assoc.: DHCR Adm. Rev. Docket No. HR210001RO (11/7/22)[3-pg. document]