Case Sent Back Twice for DRA Calculation of SRO Unit Rent

Rent-stabilized SRO tenant complained of rent overcharge. Landlord claimed that the unit was vacant between 2007 and 2012 when tenant moved in. So landlord argued it was entitled to charge a "first rent" of $750 per month even though the last registered legal rent in 2010 was $60 per week. Using the "SRO default formula" that averaged comparable rents for the building, the DRA found that the base date rent was $768. Since this was more than landlord charged tenant, there was no overcharge. But tenant's rent was frozen at $750 per month based on landlord's failure to file a 2013 annual rent registration. Tenant appealed, claiming that the 2010 registered rent remained the legal rent.

The DHCR ruled for tenant, finding that the average of the comparable apartments didn't yield the lowest rent amount that could be determined under RSC Section 2522.6(b)(3). The DHCR sent the case back to the DRA to recalculate. The DRA affirmed its original ruling because the RSC was amended and no longer applied to this case.

Tenant appealed again and won. The DHCR again sent the case back to the DRA for recalculation. Landlord failed to prove that the unit was vacant on the December 2009 base date. And there was no contemporaneous rent registration on file on that date. So, the DRA was required to set the rent based on the default formula. Previously, the DRA erred by failing to include the prior tenant's 2010 rent in setting a comparable rent under the default formula. 

Salvo: DHCR Adm. Rev. Docket No. HO410031RT (9/24/20) [3-pg. doc.]