Tenant's Preferential Rent Rider Didn't Apply to Renewal Lease

Rent-stabilized tenant, who moved into her apartment in 2010, complained to the DHCR of rent overcharge. She also claimed that landlord offered no renewal lease in 2017 and also failed at that point to continue offering her a preferential rent.

The DRA ruled against tenant and found that she had no contractual right to a preferential rent for the entire term of her tenancy. The DRA said that tenant's preferential rent rider applied only to her vacancy lease. Tenant appealed, and the DHCR denied her petition for administrative review (PAR). Tenant then filed an Article 78 court appeal, claiming that the DHCR's decision was arbitrary and unreasonable.

The court ruled against tenant. Tenant's vacancy lease rider gave tenant a preferential rent for that term but stated that, upon renewal, the legal regulated rent plus all applicable lawful increases would be used to set the renewal rent. After that, "each successive renewal rent shall be established based upon lawful increases to the preceding rent for as long as Renter remains in occupancy."

In her reply to the DHCR and landlord's opposition to the Article 78 petition, tenant raised for the first time an argument that HSTPA, effective June 14, 2019, applied to the disputed rent increase. HSTPA amended the rent stabilization law to require preferential rents to continue with guideline increases throughout a tenancy. The court noted that it need not address a claim raised for the first time in an Article 78 proceeding.

Yao v. DHCR: Index No. 153594/2019, 2020 NY Slip Op 32316(U)(Sup. Ct. NY; 7/16/20; Freed, J)