Review of Entire Rent History Shows No Preferential Rent Agreement

(Decision submitted by David Hershey-Webb of the Manhattan law firm of Himmelstein, McConnell, Gribben, Donoghue & Joseph, attorneys for the tenant.)

Landlord asked the DHCR to determine the legal rent for tenant's rent-stabilized apartment. Landlord submitted (a) a signed one-year renewal lease commencing May 1, 2003, at a monthly rent of $1,551.41; (b) an unsigned renewal lease for a one- or two-year term starting May 1, 2004, at either $2,732.51 or $2,810.95, along with a preferential rent rider setting forth proposed preferential rents of $1,620.94 (for one year) and $1,667.48 (for two years); (c) an unsigned renewal lease for a one- or two-year term commencing on May 1, 2005, with the form specifying both legal regulated and preferential rents; and (d) an unsigned renewal lease for a one- or two-year term commencing on May 1, 2006, listing proposed legal regulated rents only for each term. Landlord had "deemed" leases and preferential rent increases for 2004 and 2005. Tenant disputed landlord's intent in 2006 to end what landlord claimed was a preferential rent agreement.

The DRA ruled in 2011 that neither tenant's vacancy lease, nor any renewal leases between 1997 through 2003 set forth separate legal and preferential rents. The 2004 renewal lease therefore offered rents that were in excess of the legal rent. The DRA set the legal rent at $1,551.41 as of May 2003, since that was the last lawful renewal lease increase.

Landlord appealed and lost. The DRA correctly reviewed tenant's entire rent history back to 1995 in order to examine the preferential rent question. Tenant's 1995 vacancy lease as well as each of tenant's next six lease renewal agreements made reference to a single rent without any reference to either a preferential rent or the existence of a higher legal rent. Landlord's 2005 lease renewal offer therefore introduced new terms and conditions, in breach of tenant's vacancy lease. It also didn't matter that landlord had registered both higher "legal" rents and preferential rents for the apartment.

Harlington Realty Co. LLC: DHCR Adm. Rev. Docket No. ZD420049RO (3/22/13) [9-pg. doc.]