No Overcharge When MCI Increases Included in Calculation of Rent History

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $1,790, including interest. The overcharge finding was determined by calculating lawful rent increases above the base date rent in effect four years before tenant filed his complaint.

Landlord appealed and won, in part. Landlord believed that the apartment was deregulated in 2005 due to high-rent vacancy. The legal rent was over $2,000 per month, but landlord then charged tenant less than that amount. Landlord didn’t preserve any preferential rent in tenant’s lease because, at the time, landlord believed that the apartment was deregulated. But the building received J-51 benefits, and it became clear only after the 2009 Court of Appeals decision in Roberts v. Tishman Speyer that tenant was rent stabilized. Landlord argued that, in fairness, the DHCR should look at the rent history pre-dating the base rent date to calculate the legal rent. But, since the amount of the base date rent wasn't in question, the DHCR found that it couldn’t look at the prior rent history.

However, the DRA failed to include approved MCI rent increases in the calculation of lawful rent increases to tenant’s rent after the base rent date. When these were added in, there was no rent overcharge.

Majestic Properties LLC: DHCR Adm. Rev. Docket No. DR110015RO (8/19/15) [5-pg. doc.]