DHCR Can't Look Back More Than Four Years to Examine Rent Stabilization Status

Tenant filed an application with the DHCR, seeking a declaration that he was rent stabilized. The DRA ruled for tenant, and landlord appealed. The DHCR denied landlord's PAR. Landlord then filed an Article 78 court appeal, claiming that the DHCR's decision was arbitrary and unreasonable.

The DHCR agreed to take the case back for further consideration, then ruled for landlord and determined that the apartment was vacancy deregulated. Landlord showed that the last registered rent-stabilized tenant signed a vacancy lease at $1,712 in August 2007 and paid a preferential rent of $1,550 per month. When that tenant moved out in 2008, landlord added permissible vacancy increases, resulting in a new rent above the vacancy deregulation threshold of $2,000 per month. The DRA had asked landlord to document how the rent got to $1,712 in 2007, since the prior rent-stabilized rent was $976 per month. Landlord had argued that the four-year rule barred the DHCR from considering rent history evidence prior to the four-year base date. The mere fact that the rent had substantially increased didn't give the DRA authority to demand older rent history records. On remand, the DHCR agreed. Absent an indication of fraud, the DHCR couldn't look back more than four years. There was no proof in this case that the 2008 registered rent was challenged within the four-year limitations period. 

43-23 40th Street, LLC: DHCR Adm. Rev. Docket No. GU110001RP (2/7/19) [4-pg. doc.]