DHCR Must Adjust Rent-Controlled Rent Not Increased Since 1961

(Decision submitted by David B. Cabrera of the Manhattan law firm of Borah, Goldstein, Altschuler, Nahins & Goidel, P.C., attorneys for the landlord.)

Landlord asked the DHCR in 2010 to determine the rent regulatory status of one of his tenants and to set a rent-controlled rent for tenant’s apartment. Landlord had bought the four-unit building in 2000. Prior landlord and various family members had lived in the building up until then. Prior landlord’s niece moved into apartment 4 in 1961. She died in 2008, and her son and his wife now lived there at a rent of $125 per month. New landlord had asked the DHCR for any rent control records relating to the apartment, but the DHCR told him there were none. Landlord claimed that there were unique and peculiar circumstances that warranted setting a higher rent even if current tenant was a rent-controlled successor tenant. The DRA ruled that tenant was rent controlled, that his current Maximum Collectible rent (MCR) was $125 and that landlord should file to establish a Maximum Base Rent (MBR). Landlord appealed, but the DHCR denied his PAR. Landlord then filed an Article 78 appeal, claiming that the DHCR’s decision was arbitrary and unreasonable.

The court ruled for landlord. Rent Control Regulations Section 2202.7 permits the DHCR to adjust the MCR based on “unique and peculiar circumstances” that have resulted in a rent that's substantially lower than rents generally prevailing in the same area for substantially similar apartments. Regulation Section 2202.2 also allows the DHCR to set a rent-controlled rent where the rent hasn't been previously established. Tenants’ parents paid $125 per month as rent-controlled tenants in 1961. After that, the apartment was operated outside the rent-control system. The case was sent back to the DHCR to set an appropriate current-day rent.

Migliaccio v. DHCR: Index No. 22110/13 (Sup. Ct. Kings; 6/4/25; Toussaint, J)