DHCR Properly Rejected Comparability Data

Facts: Tenant complained that the initial rent-stabilized rent charged for her apartment was greater than the fair market rent. Landlord claimed that tenant's first rent was proper and submitted proof of comparable rents in the form of an appraisal report covering other neighborhood rents. The DHCR permits landlords to present proof showing rents for comparable units that were rented up to four years before or one year after the start of the complaining tenant's initial lease. The DHCR ruled for tenant, and landlord appealed, arguing that the DHCR violated the Rent Stabilization Law by not considering landlord's appraisal report as proof of prevailing rents for substantially similar housing in the neighborhood in which tenant's apartment was located. Court: Landlord loses. The DHCR didn't reject landlord's entire appraisal, but only those portions of the report that were general overviews. This decision was reasonable since the rejected sections discussed fluctuations in market and vacancy rates of commercial property and didn't shed any light on the value of tenant's apartment. In addition, the DHCR considered those portions of the appraisal report that discussed specific apartments in the neighborhood. The DHCR reasonably found that the apartments surveyed were much larger than tenant's apartment and differed in layout to such an extent that they weren't proper comparables.

IG Second Generation Partners LP v. DHCR: NYLJ, p. 27, col. 5 (11/10/99) (Sup. Ct. NY; Weissberg, J)