Landlord Can End Preferential Rent

Tenant complained that landlord didn't offer her a renewal lease on the same terms and conditions as in the prior lease. Specifically, landlord had removed the preferential rent from the renewal lease. Tenant's initial 1991 lease included a rider stating that ''all lease extensions after the first year'' would be based on the preferential rent. Landlord argued that it was entitled to discontinue the preferential rent based on the 2003 amendment to Rent Stabilization Law Section 26-511(c). The DRA ruled against tenant. Tenant appealed, pointing out that an appeals court ruled that the 2003 amendment to the law didn't bar landlord and tenant from agreeing to continue a preferential rent as a matter of contract. The DHCR ruled against tenant, stating that it wasn't bound by the court ruling. Since tenant's 1991 lease agreement was signed more than four years before tenant's complaint was filed, the DHCR couldn't consider that agreement. And since renewal leases during the past four years set forth both the preferential rent and the legal regulated rent, landlord was entitled to end the preferential rent under the law.

Sugihara: DHCR Adm. Rev. Dckt. No. TI410015RT (12/1/05) [3-pg. doc.]