Rent Reduced from $1,200 to $300 Based on Landlord's Default

Two rent-stabilized tenants complained of a rent overcharge in 2005. Landlord answered that it had bought the building in 2003 and renovated both apartments before renting them to tenants. Landlord submitted proof of the cost of the apartment improvements, but didn't submit any leases or rent ledgers for any period before 2003. The DHCR ruled for tenants based on landlord's default and reduced each rent from $1,200 per month to $300 per month. Landlord appealed, claiming that the DHCR's decision was unreasonable. The court ruled against landlord. Landlord failed to submit rent history records going back to the 2001 base date, four years before tenants filed their complaints. So the DHCR properly applied its default formula in setting tenants' rents. The formula calculated the base rent by taking the lowest stabilized rent from a same-size apartment in the same building.

Newport Partners, LLC v. DHCR: NYLJ, 4/4/07, p. 23, col. 1 (Sup. Ct. NY; Cahn, J)