Initial $2,800 Rent Was Fair Market Rent Subject to Stabilization in J-51 Building

LVT Number: #26242

Tenant complained of rent overcharge. Landlord claimed that tenant was the first tenant to move in after rent control, that tenant’s first rent was $2,800 per month, and that tenant therefore was deregulated. The DRA treated tenant’s complaint as a fair market rent appeal and ruled for tenant.

Tenant complained of rent overcharge. Landlord claimed that tenant was the first tenant to move in after rent control, that tenant’s first rent was $2,800 per month, and that tenant therefore was deregulated. The DRA treated tenant’s complaint as a fair market rent appeal and ruled for tenant. Although tenant’s initial rent was a fair market rent, the building was receiving J-51 benefits at the time, and therefore the rent remained subject to rent stabilization. The DRA ordered landlord to refund $7,020. 

 

Tenant appealed and lost. Tenant claimed that landlord had committed fraud and that the DRA should have applied its default formula to calculate the legal rent. Landlord didn't file an initial RR-1 registration form and didn’t give tenant the chance to challenge the initial rent.  But tenant’s complaint was properly treated as a fair market rent appeal, and the initial rent was supported by comparables. There was no fraud. The base rent date was April 9, 2009, four years before tenant filed his complaint. Landlord reasonably believed at the time based on prior DHCR advice that the apartment wasn’t subject to rent stabilization when tenant moved in. 

 

 

 

Olsen: DHCR Adm. Rev. Docket No. CP410049RT (4/7/15) [5-pg. doc.]

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