Prior Rent Exempt Despite Zoning Law Violation

(Decision submitted by Garden City attorney Martin A. Shlufman, who represented the landlord.) Tenant complained of a rent overcharge. The DRA ruled for tenant and ordered landlord to refund over $7,000 for a willful rent overcharge. Landlord appealed. The DHCR reversed and ruled for landlord. Tenant's apartment had been used as a professional unit from 1969 through 1988. The apartment was then vacant until tenant moved in. Therefore the initial legal regulated rent was tenant's first rent and there was no rent overcharge. Tenant appealed, claiming that the prior use of the apartment as a doctor's office violated local zoning laws and so prior rent shouldn't be exempt from rent stabilization and used in calculation of legal rent. The court ruled for tenant, and then landlord appealed and won. The DHCR was entitled to its own interpretation of the ETPA as long as it wasn't irrational. And there was a rational basis for DHCR's finding that there was no rent overcharge.

Reiss v. DHCR: NYLJ, p. 27, col. 1 (4/11/97) (App. Div. 2 Dept.; Sullivan, JP, Pizzuto, Santucci, Joy, JJ)