Successor Tenant Not Entitled to Prior Rent-Stabilized Tenant's Preferential Rent

Landlord asked the DHCR in 2017 to determine if it could give the former rent-stabilized tenant's successor tenant a renewal lease based on the prior tenant's legal regulated rent. After the prior tenant moved out, the successor tenant claimed that he was entitled to a renewal lease based on the prior tenant's preferential rent.

The DRA ruled against the successor tenant, who appealed and lost. Landlord and the prior tenant had signed a settlement agreement in 2007 in connection with that tenant's rent overcharge complaint. The settlement agreement stated that tenant would pay a preferential rent from the beginning of his tenancy in January 2006 and that his future renewal leases would be based on the preferential rent and increased by allowable rent guideline increases. The agreement also directed landlord to register the apartment with listings of both the legal regulated rent and preferential rent. The agreement did not provide for tenant's successors and didn't contemplate or explicitly provide for the successor tenant, who didn't begin living with tenant in the apartment until 2009 and became tenant's domestic partner in 2013. Since the successor wasn't a party to the settlement agreement, landlord wasn't required to base the successor's rent on a preferential rent. Nothing in HSTPA applied to this case since the preferential rent was based on the settlement agreement between landlord and prior tenant. 

IM: DHCR Adm. Rev. Docket No. HV210004RT (9/10/21)[4-pg. document]