Setting Rent for Unit Previously Rented to Commercial Tenant

An apartment was exempt from rent regulation because it had been rented to a commercial tenant since 1986. Landlord wanted to rent the apartment to a residential rent-stabilized tenant, and asked the DHCR how to calculate the rent. Landlord claimed that the last rent-stabilized tenant was paying $900 per month when he moved out of the apartment in 1986. The DHCR told landlord to compute the rent as follows: (1) use $900 as the starting point; (2) add the guideline and vacancy increases applicable for a two-year lease beginning in 1986; (3) add the guideline increase for two 2-year renewal leases (1988 and 1990); (4) if the new tenant's move-in date is less than seven years after the last residential tenant moved out, add the guideline increase for a one-year renewal; (5) if the move-in date is after seven years, use the increase for a two-year renewal for 1992.

DHCR Opin. Ltr. by Nathaniel Geller (9/21/93) [2-page document]