Commercial Loft Units Converted to Apartments at High Rent Weren't Rent Stabilized

Two loft tenants complained separately to the DHCR of rent overcharge and improper deregulation of their apartments. The DRA ruled against tenants, finding that the units had been vacancy deregulated in 2002 or 2003 and therefore weren't subject to the DHCR's jurisdiction.

Tenants appealed and lost. The DHCR noted that tenants were the first residential tenants of the apartments with initial leases commencing respectively on June 1, 2002, and July 1, 2003, at monthly rent of $2,500. This was above the vacancy deregulation threshold in effect at that time. The lofts had been commercial units before tenants moved in. Tenants pointed out that the lofts were illegally used as residential units when they moved in, in violation of the building's C of O. Tenants argued that landlord therefore engaged in a scheme to fraudulently deregulate the apartments. But whether the apartments were illegal or how the Multiple Dwelling Law affected the units wasn't relevant to their rent regulatory status. 

Raheja: DHCR Adm. Rev. Docket No. MR410026RT (3/31/25); Casarino: DHCR Adm. Rev. Docket No. MR410030RT (3/31/25)[6-pg. document]