Apartment Became Rent Stabilized After 10-Year Temporary Exemption

Tenant complained to the DHCR in 2018 of rent overcharge and improper deregulation of her apartment. The DRA ruled against tenant, finding that the unit was deregulated in 2009, which was prior to the 2014 base rent date. Tenant appealed and won, in part. The DHCR found that the apartment was rent stabilized, that there had been a small overcharge of $13,632, including interest, but that there had been no fraudulent scheme to deregulate the apartment. 

Before tenant's occupancy, the apartment was temporarily exempt from rent stabilization due to owner occupancy. When landlord subsequently resumed renting the apartment, the unit returned to rent-stabilized status under RSC Section 2526.1. The code provided at that time that, while a first rent after a temporary exemption may be the rent agreed to by the landlord and the first tenant after such exemption, such rent must be a rent-stabilized rent. RSL Section 26-504.2 further stated that, for there to be high-rent vacancy deregulation, the "legal regulated rent" must exceed the deregulation threshold. Because the first tenants after temporary exemption weren't treated in this case by landlord as rent-stabilized tenants, either by lease or registration, there was no "legal regulated rent" that could be the basis for deregulation of the apartment. So, there could not have been a legitimate high-rent vacancy deregulation in this case even though the actual rent exceeded the deregulation threshold. So the apartment remained, and remains, rent stabilized. Applying a four-year base date, the $2,550 rent charged in 2014 became the legal regulated base date rent. The DHCR found a subsequent, non-willful rent overcharge.

Mccarron: DHCR Adm. Rev. Docket No. LR210010RT (1/25/24)[4-pg. document]