Rent Reduction Order Froze Rent at Preferential Rent

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant, finding a total overcharge of $357, which had already been refunded through a rent credit. Landlord appealed and lost. The DRA found that the base date legal regulated rent and collectible rent were both $1,523 but that when the legal rent later rose to $1,539, the collectible rent equaled the $1,400 rent paid under a preferential rent agreement. A prior rent freeze order reduced the collectible rent to $1,430. Landlord objected to the rent freeze. But the DHCR stated that, in rent freeze cases where the rent has been preferential, the DHCR's policy is to read the freeze order as referring to that rent rather than the "legal" rent. In other words, the DHCR reads the rent freeze order literally to eliminate the aversive effect of the rent reduction. Otherwise the rent freeze would be merely theoretical and neither compensating the service-deprived tenant nor motivating the landlord to restore the service.

2474 Valentine Realty, LLC: DHCR Adm. Rev. Docket No. GT610030RO (8/7/19) [2-pg. doc.]