Tenants Paid Lawful Preferential Rent Since Initial 2009 Lease

Rent-stabilized tenants complained of rent overcharge and lease violation. The DRA ruled against tenants, who appealed and lost.

Tenants claimed that the $1,375 monthly rent charged by landlord was an illegal preferential rent. They also complained that landlord refused to sign a Section 8 contract for their apartment.

The DRA found no overcharge because tenants paid a preferential rent at all times since the March 2013 base date and that there was no overcharge. As of August 2018, their legal regulated rent was $2,259 and their preferential rent was $1,714. The DRA noted that landlord could increase the preferential rent up to any amount less than the legal rent upon lease renewal. Tenants' July 2009 initial lease contained a Rent Stabilization Rider indicating that the legal regulated rent at that time was $1,808. The lease also contained a preferential rent rider for $1,000 per month. Both the initial lease and the preferential rent rider were signed contemporaneously by landlord and tenants. All annual apartment registrations and subsequent renewal leases also listed both the legal and preferential rents, and the numbers matched.

Tenants' Section 8 claim had no bearing on the overcharge or lease issues. Tenants must raise any Section 8 issues with the agency providing Section 8 rent assistance.

The Housing Stability and Tenant Protection Act of 2019 (HSTPA) didn't change the result of the DRA's decision because the DRA had already reviewed apartment registrations and rent records dating back to 2009. This was four years before the original four-year base date and eight years prior to the filing of tenants' complaint. Those records proved the existence of tenants' preferential rent.

Sanjiao/Diaz: DHCR Adm. Rev. Docket No. HO610034RT (1/15/20) [3-pg. doc.]