Increase in Preferential Rent Wasn't Overcharge

Rent-stabilized tenant complained of rent overcharge. Under tenant's two-year vacancy lease, landlord listed the legal regulated rent as $1,322. Landlord charged tenant a preferential rent of $929 for the first year and $979 for the second year. The DRA ruled for tenant, finding that landlord couldn't collect a higher rent for the second year of a two-year lease. Landlord appealed and won. Rent Stabilization Code Section 2522.5 prohibits rent adjustments during a lease term, but, in prior decisions, the DHCR approved increases such as the one collected by landlord here. The increased second-year rent was still less than the legal regulated rent for the apartment under the two-year vacancy lease. The rent charged in the final year of a graduated lease is lawful if it is no more than could have been charged at the inception of the lease. 

Jamaica Seven LLC: DHCR Adm. Rev. Docket No. ZD110016RP (1/24/14) [3-pg. doc.]