On-Time Rent Discount Is Preferential Rent

Rent-stabilized tenant complained of a rent overcharge, claiming that landlord discontinued a preferential rent during his lease term. The DRA ruled for tenant and ordered landlord to refund $920. Landlord appealed and lost. Landlord claimed that a discount given to tenant for paying rent on time wasn’t a preferential rent. But a preferential rent is a rent that landlord agrees to charge that is lower than the legal regulated rent landlord could otherwise lawfully collect. A lease can’t legally provide for an escalation in a preferential rent before the expiration of the lease term.

Hudson House LLC: DHCR Adm. Rev. Docket No. YA110026RO (3/1/10) [2-pg. doc.]