Time Limit Bars Use of Rent Registration on Preferential Rent Claim

(Decision submitted by Manhattan attorney Eileen O'Toole, who represented the tenants.)
Facts: Rent-stabilized tenants complained of an improper lease renewal when landlord sent renewal offer incorrectly stating that current legal rent was $2,003. Tenants claimed that their current legal rent before the next renewal increase was $1,998. Landlord argued that $1,998 was a preferential rent and that landlord properly discontinued the preferential rent with the renewal lease offer. Tenants claimed that they were never charged a preferential rent and that recent annual rent registration forms filed by landlord incorrectly listed a legal regulated rent and a preferential rent. The DHCR treated tenant's complaint as a rent overcharge complaint, and applied the four-year rule to rent history documents submitted by landlord. The DHCR found that $1,998 was the legal rent. Landlord appealed to the court, claiming that the DHCR's decision was arbitrary and unreasonable.

Court: Landlord loses. Since tenant's complaint was filed on June 11, 2007, the base date was June 11, 2003. The renewal lease in effect on that date, which commenced on Aug. 1, 2002, contained no agreement or other indication of preferential rent. Landlord claimed that the DHCR should have relied on the 2003 rent registration, which listed a preferential rent and a higher legal rent. But the April 1, 2003, rent registration was filed before the base date and couldn't be considered as part of the rent history. The DHCR's decision was reasonable. Rent Stabilization Law Section 2521.2(b)(2) states that rent history records for the period prior to the four-year period can't be considered to determine whether tenant paid a preferential rent.

63rd Street Owner, LLC v. DHCR: Index No. 113457/08 (5/27/09) (Sup. Ct. NY; Diamond, J) [3-pg. doc.]