Landlord Waived Rent Increase for Two-Year Renewal Lease Period

Rent-stabilized tenant complained to the DHCR in 2017 of rent overcharge. The DRA ruled for tenant, finding a total overcharge of $5,120 with triple damages. But, since tenant owed landlord $14,975 in back rent, no refund was due to tenant.

Landlord appealed and lost. Landlord questioned why it couldn't charge the legal rent of $951 on Oct. 1, 2014, and argued that the legal rent should have been $970 starting Oct. 1, 2017.

The DHCR disagreed and explained that, since tenant was in occupancy as a month-to-month tenant without a valid lease from the Sept. 30, 2014, base rent date, the legal and collectible rent didn't increase from the base date rent of $885. Starting Oct. 1, 2014, the rent could have been increased by the 2.75 percent applicable guideline increase. But, even though a two-year renewal lease was signed to commence on Oct. 1, 2014, landlord's rent ledger showed that it waived that rent increase by billing tenant $885 from Oct. 1, 2014, through Nov. 30, 2015, which was the first year of that renewal period. Landlord improperly began collecting the guideline increase retroactively on Dec. 1, 2015, which resulted in the initial overcharge. The legal rent remained $885 until Oct. 1, 2017. And even though the DHCR had issued a separate order giving landlord the right to amend a 2015 DHCR apartment registration by adding the lease period Oct. 1, 2014-Sept. 30, 2016, and changing the rent amount from $885 to $951, that order specifically stated that it was "not a determination of the legal rent for the apartment." The DRA's rent calculation chart also clarified that the legal and collectible rent was the same beginning Oct. 1, 2016,, based on the applicable 0 percent guideline increase, and then increased from $885 to $903 as of Oct. 1, 2017.

1781 Riverside LLC: DHCR Adm. Rev. Docket No. KV410012RO (1/30/23)[2-pg. document]