Subdivided Units Don't Qualify for High-Rent Deregulation

Landlord combined three apartments to create one new rent-stabilized apartment with a first rent of $2,700. The new apartment was vacated by July 7, 1993, and was deregulated under state law. Landlord then subdivided the apartment into two apartments renting for $1,100 and $1,600, respectively, as of Jan. 1, 1994. Landlord asked the DHCR whether creating and renting two separate units with an aggregate total monthly rent of $2,700 would continue the destabilization status of the space, which now consisted of two separate apartments created after the destabilization date. In an opinion letter, the DHCR stated that the two new apartments didn't continue the high-rent deregulation granted to the apartment before subdivision. The two new apartments existed as separate rent-stabilized units before April 1, 1994, the effective date for high-rent deregulation under New York City law. The DHCR noted that there were, so far, no court decisions, formal opinions, or policy statements concerning this question.

DHCR Opin. Ltr. by Nathaniel Geller (11/22/94) [3-page document]