Tenant Included No Overcharge Claim with His Lease Violation Complaint

In 2013, tenant complained to the DHCR that landlord failed to offer him a rent-stabilized renewal lease. Tenant didn't complain at that time of rent overcharge but asked for a ruling that the unit was subject to rent stabilization. The DRA ruled against tenant in 2014, and the DHCR denied tenant's PAR. Tenant then filed an Article 78 court appeal. The court sent the case back to the DHCR for further consideration of the rent stabilization status of the building. The case was sent back to the DRA in February 2019. In 2022, after both sides submitted additional documentation, the DRA ruled for tenant, finding that tenant's apartment was rent stabilized and that landlord incorrectly claimed that the building had been exempt for a period only while J-51 tax benefits were received. Tenant and landlord both appealed.

In 2023, the DHCR ruled against both sides. Tenant argued that the DRA failed to make any overcharge finding. But the DHCR pointed out that tenant's lease violation complaint didn't include any overcharge claim. Landlord argued in its PAR that the building had been substantially rehabilitated in 1979 and therefore was exempt from rent stabilization after J-51 benefits expired. The DHCR disagreed, finding that the building was rent-regulated before J-51 benefits were obtained, and wasn't rehabilitated in a way that would warrant deregulation. The DHCR also found that, even if the apartment was temporarily exempt as owner-occupied for some time, the first rent after such exemption had to be rent stabilized. 

Tenant and landlord then filed new Article 78 petitions, each claiming that the DHCR's decision was arbitrary and unreasonable. The court agreed with the DHCR that, since the tenant never filed a rent overcharge complaint, he never formally demanded that the DHCR fix the legal rent, calculate any rent overcharge, or direct the reimbursement of that overcharge. Tenant demanded only that the DHCR deem the apartment to be rent stabilized and compel landlord to offer him a rent-stabilized renewal lease. The DHCR isn't authorized to grant relief that wasn't requested in the administrative complaint. The DHCR's decision concerning rent overcharge in this case was rational, and not arbitrary or capricious. The DHCR's decision that the apartment was rent stabilized also had a rational basis.

Helm v. DHCR: Index No. 152368/2023, 2023 NY Slip Op 34388(U)(Sup. Ct. NY; 12/13/23; Kelley, J)