HSTPA Amendments Supersede Prior Court Settlement Ending Tenant's Preferential Rent in 2020

Landlord asked the DHCR for a ruling on whether his rent-stabilized tenant's preferential rent could be discontinued by landlord when his renewal lease expired in 2020. In a 2014 housing court proceeding, landlord and tenant had stipulated that landlord would continue to offer tenant preferential rents upon lease renewals commencing between 2014 and 2020 only. Landlord now argued that no further preferential rent was required, despite amendments to the Rent Stabilization Law by HSTPA in 2019. The DRA ruled for tenant, finding that tenant retained the right to a preferential rent with lawful renewal increaes for the remainder of his tenancy.

Landlord appealed and lost. Landlord argued that the so-ordered court settlement was binding and was the governing law of the case. The DHCR disagreed. While court settlement stipulations are favored and should be given deference, the HSTPA amendments to the RSL superseded such private agreement between the parties, even if such a stipulation was ratified by a court or the DHCR. HSTPA immediately amended RSL Section 26-511(c)(14) on June 14, 2019, to require landlords to offer renewal leases based on the same amount paid by and accepted from tenant under the expiring lease. And it was well settled under appellate case law that parties to a lease for a rent-stabilized apartment, could not, by agreement, incorporate terms that compromised the integrity and enforcement of the RSL.

510 E 6th Street LLC/Williams: DHCR Adm. Rev. Docket Nos. JV410028R), KM410036RT (1/19/24)[6-pg. document]