Tenant Who Occupied Apartment Before Substantial Rehab Is Rent Stabilized

Landlord asked the DHCR to rule on whether a substantially rehabilitated building was rentstabilized. The DRA ruled for landlord in part. The building was substantially rehabilitated in 2012 and would remain rent stabilized until a J-51 tax abatement granted in 2014 expired. For all new tenants who moved in after the substantial rehab, rents charged in their 2014 leases were the legal regulated rents. The DRA also ruled that Apartment 2D, which was formerly Apartment 4, would remain rent stabilized until current tenant moved out.

Landlord appealed that portion of the DRA’s order and lost. The DHCR found that the DRA properly relied on a 2013 housing court decision that that, although reconfigured, Apt. 2D was the same as former Apt. 4. Landlord claimed that Apt. 2D was completely new, with new perimeters, and that the court decision didn’t directly rule on the status of the apartment. But the DRA was legally bound to follow the housing court decision that the new apartment was the same as the old apartment, that tenant was living there at the time of a 2011 DOB vacate order, and that tenant maintained a constructive tenancy during the substantial rehab. 

Reno Capital LLC: DHCR Adm. Rev. Docket No. EO210022RO (2/27/17) [7-pg. doc.]