Legal Regulated Rent Was Less Than "Preferential" Rent Charged

Rent-stabilized tenant complained to the DHCR of rent overcharge in 2018. The DRA ruled for tenant and directed landlord to refund $25,174, including triple damages. Landlord appealed and lost. Tenant's 2015 vacancy lease had a monthly legal regulated rent of $1,717 and preferential rent of $1,650. But the DRA found that the legal regulated rent when tenant moved in was $1,599, which was less than the "preferential" rent charged. The DRA's calculation of tenant's initial legal rent in 2015 was based on disallowance of some of landlord's claimed individual apartment improvements (IAIs). It didn't matter that landlord thought it was charging a valid preferential rent since that rent was higher than the actual legal regulated rent.

1145 Clay Avenue Realty, LLC: DHCR Adm. Rev. Docket No. MT610022RO (3/4/25)[2-pg. document]