Tenant Remained Rent Stabilized After Transfer to Deregulated Apartment

Tenant complained to the DHCR in 2021 of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $13,950, including triple damages and minus a partial refund. The DRA also directed landlord to offer tenant a proper and legal rent-stabilized renewal lease. Landlord appealed and won in part. Landlord claimed that the apartment had been vacancy-deregulated before tenant moved in. Landlord said that it permitted tenant to transfer from her prior rent-stabilized unit to another, larger deregulated apartment at tenant's request.

The DHCR affirmed that tenant remained rent stabilized in the new apartment. There was no written agreement specifying that the move was at tenant's request or that the new apartment was non-regulated. Although landlord submitted a former managing agent's sworn statement recalling that tenant asked to move to the larger apartment and was "notified" that the new unit wasn't rent-regulated, this was insufficient proof of landlord's claims. The non-regulated lease for the new apartment also was insufficient proof of notice to the tenant. In addition, nothing in emails or other correspondence between landlord and tenant showed that tenant requested the move or that she was notified of the new apartment's deregulation. 

However, since the apartment was legally deregulated before tenant moved in, landlord could reasonably have believed that the unit was deregulated after tenant moved in. As a matter of equity, it was error to have frozen tenant's rent for failure to register the apartment or to have assessed triple damages. The DHCR recalculated the rent overcharge. The total refund due to tenant was now $1,637, reflecting overcharges of $5,074 plus interest and minus a prior underpayment by tenant.

Alscot Realty: DHCR Adm. Rev. Docket No. LP910030RO (10/20/23)[5-pg. document]