Tenant's Fair Market Rent Appeal Was Untimely

Tenant moved into an apartment in 2010 and later filed a fair market rent appeal, claiming that the apartment was improperly deregulated. The DHCR ruled against tenant, finding her claim untimely. The rent-controlled tenant had died in 2004. Landlord had mistakenly given the first rent-stabilized tenant an unregulated lease in 2005, because the building was then receiving J-51 tax benefits. But the first rent charged to that tenant was legally over $2,000 per month and there was no fraud in setting that rent. When complaining tenant moved into the apartment in 2010, the J-51 benefits had expired and the rent was legally over $2,000.

Tenant filed an Article 78 appeal of the DHCR’s decision and lost. The court and appeals court found that landlord was permitted to deregulate the apartment in 2010 and charge a free market rent. The fact that landlord had previously improperly removed the apartment from rent regulation in 2005 didn’t prevent landlord from later rightfully charging a market rent when the apartment was eligible for deregulation. Landlord’s J-51 tax benefits were in effect in 2005 but expired before complaining tenant moved in, and the first rent set after the rent-controlled tenant vacated in 2005 was legally over $2,000 per month. The four-year period for tenant to challenge the initial rent-stabilized rent also began to run on the date that the apartment was removed from rent control, and landlord didn’t engage in any fraud when it removed the apartment from rent control. Tenant’s fair market rent appeal therefore was untimely and properly denied.

Park v. DHCR: 2017 N.Y. Slip Op. 02745, 2017 WL 1261821 (App. Div. 1 Dept.; 4/6/17; Andrias, JP, Feinman, Gische, Kahn, JJ)