Deregulation Clause in Renewal Lease Inadequate

In 1995, landlord filed a petition for high-rent/high-income deregulation of tenant's apartment. The DRA ruled for landlord and stated that the apartment would be deregulated when tenant's existing lease expired. Landlord appealed, claiming it should have been able to deregulate tenant's apartment 60 days after the issuance of the DRA's order rather than having to wait for the expiration of the existing lease on Oct. 30, 1997. Landlord's deregulation petition had been filed during the lease renewal window period in 1995, when it was required to offer tenant a renewal lease even though it was filing the deregulation petition. The DHCR ruled against landlord. DHCR Operational Bulletin 95-3 permits landlords to insert a rider in such renewal lease offers notifying tenants that the offered renewal lease will no longer be in effect after 60 days from the issuance of a DHCR deregulation order. Landlord's lease rider didn't contain the recommended language. It stated only that in the event of deregulation, tenant's rent would be increased by the applicable two-year renewal guideline or 10 percent, whichever was higher, and didn't adequately advise tenant of the possibility of deregulation after 60 days.

Belnord Realty Assocs.: DHCR Adm. Rev. Dckt. No. KA410110RO (10/15/97) [3-page document]