Switching from Commercial to Residential Lease

One of landlord's tenants had a commercial lease for an apartment for 24 years. The building was rent stabilized. The commercial tenant asked landlord if she could convert to a residential lease. Landlord asked the DHCR how this could be done and how the rent should be calculated. In an opinion letter, the DHCR said that no agency filings were required. To switch to a residential tenancy in a rent-stabilized building, landlord should just give tenant a rent-stabilized vacancy lease and register the apartment. Landlord also could set a first rent. The apartment was temporarily exempt from rent regulation while it was commercial, and since the exemption period was for more than four years, any prior rent-stabilized or rent-controlled rent history was irrelevant to setting the legal rent.

DHCR Opin. Ltr. by Charles Goldstein (10/22/01) [2-pg. doc.]