Tenant's Legal Rent Reduced to Preferential Rent

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant and directed landlord to set tenant's preferential rent as the legal rent. Landlord appealed and lost. Rent Stabilization Code Section 2521.2, as amended and in effect when the DRA decided the case, provides that, to preserve a higher legal rent when a preferential rent is offered, the higher legal rent must be set forth in every lease from the inception of the preferential rent. This was reasonable and fair because it insured that tenant was on notice when he signed any lease with a preferential rent that, upon renewal, he could be responsible for the higher legal rent as preserved and set forth in the signed lease. Landlord's filing of rent registrations listing both a higher legal rent and preferential rent didn't necessarily notify tenant of potential responsibility for a higher legal rent in a future renewal. In this case, landlord didn't preserve a higher legal rent in every lease since the inception of the claimed preferential rent. [Download PDF of decision here.]

5530-5572 Netherland Avenue, LLC: DHCR Adm. Rev. Docket No. EW610061RO (2/6/18) [4-pg. doc.]