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Re: DHCR Decision...question: "first rent"

Posted by Sue on August 30, 2001 at 22:37:48:

In Reply to: Re: DHCR Decision...question: posted by Danny on August 29, 2001 at 23:08:46:

: : The 1997 regulations state if it was exempt for 4 years then the landlord can charge a first rent, and you have to file a fair market rent appeal.

:
: Exactly what section please?

: I've read the whole thing on this site and also searched through the 'revised' RSC on this site and : nothing, nada, zip. Please give section number of this so-called 'first rent' section.

It's not from the RRRA of 97, it's from the 12/20/00 revisions 'Code2000':

2526.1 Determination of legal regulated rents;
penalties; fines; assessment of costs; attorney's
fees; rent credits

(a)(3)

(iii) Where a housing accommodation is
vacant or temporarily exempt from regulation
pursuant to section 2520.11 of this Title on the
base date, the legal regulated rent shall be the
rent agreed to by the owner and the first rent
stabilized tenant taking occupancy after such
vacancy or temporary exemption, and
reserved in a lease or rental agreement; or, in
the event a lesser amount is shown in the first
registration for a year commencing after such
tenant takes occupancy, the amount shown in
such registration, as adjusted pursuant to this
Code.

It probably won't hold up. Here's what one court decision recently said about an Advisory Letter (not official opinion, but landlords used it, written after the RRRA from which the new code is derived:

LASIGNIORA ESTATES v. HOOPER

New York Law Journal
July 25, 2001

CIVIL COURT


Housing Resolution Part d

Judge Brown


The implication of the advisory opinion is that the statute of
limitations provisions preclude examination of the rental history
going back more than four years from the date of the complaint.
This subject apartment has been exempt for more than four
years. The Respondent cannot prove an overcharge by
reference to any rent registered or paid in the last four years.
According to the advisory opinion letter, the Respondent may be
without remedy to challenge the amount of rent offered. This
analysis, however, is not in harmony either with the plain
language of the statutory provisions or the intent of the
Legislature.

A rent overcharge cannot arise while the tenant is employed as a
superintendent and not paying any rent. Since neither the
Respondent nor his father had a cause of action for a rent
overcharge during the period the apartment was exempt, the
statute of limitations could not be operative during this period to
preclude a challenge to rents subsequently charged. It is a
universal axiom that a statute of limitations cannot begin to run
before the date the cause of action accrues. (Ely-Cruikshank
Co., Inc. v. Bank of Montreal, 185 AD 2d 182 [1st Dept];
Schochet v. Public National Bank of New York, 220 AD 201 [1st
Dept]; see also, Continental Insurance Co. v. Richt, 253 AD 2d
818 [2d Dept].) As a corollary, a cause of action does not accrue
until "all of the facts necessary to the cause of action have
occurred so that the party would be entitled to obtain relief in
court." (Continental Insurance Co. v. Richt, supra, at 819.)

The four-year statute of limitations on overcharge[1] complaints
begins to run from the date of the first overcharge, not four years
before the first overcharge. Stated differently, "[A] complaint
must be filed within four years of the first overcharge that needs
to be alleged in order to establish the existence of overcharges
within the four-year period." (Myers v. Frankel, N.Y.L.J., April 26,
2000, at 29, col 1 [AT 2d Dept].) The language of the applicable
provisions is clear on this point. Prior to amendment pursuant to
the RRRA, RSC 2526.1(a)(2) states that an overcharge
complaint "must be filed with the DHCR within four years of the
first overcharge alleged, and no award of the amount of an
overcharge may be based upon an overcharge having occurred
more than four years before the complaint is filed." (emphasis
added.) Also, CPLR 213a, prior to amendment, states, "An
action on a residential rent overcharge shall be commenced
within four years of such overcharge." These sections
specifically state that the four-year statute of limitations begins to
run from the time of the first overcharge. In this case, no rent
was paid; therefore, there are no facts to consider a cause of
action for overcharge to grant a relief. Since there is no
overcharge, the statue of limitation does not begin to run.

***************

translation: the new code quoted above is legally absurd and unenforcable.

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