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Did DHCR throw your Fair Market Appeal out the Window?

NYC Rent Regulation: Rent Control/Rent Stabilized, DHCR Practice/Procedures

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Did DHCR throw your Fair Market Appeal out the Window?

Postby TenantNet » Wed Dec 10, 2003 5:56 pm

Did DHCR throw your Fair Market Appeal out the Window?

We are looking for tenants or tenant attorneys/representatives who:

1. Filed a Fair Market Rent Appeal (FMRA) with the Division of Housing and Community Renewal (DHCR) at any time on or before December 31, 1994, AND

2. Who lost that FMRA because of the change in DHCR policy regarding "comparable apartments" that was implemented by DHCR in 1998.

If you are a tenant in such a situation (or if you are a tenant association representative or tenant attorney with a such a tenant or client), please contact tenant attorney Robert Katz at 212-587-2400 ext. 13 and leave a message. Someone will contact you.

A FMRA is a complaint that the first rent stabilized tenant may file with DHCR after a rent controlled tenancy has terminated. First rent stabilized tenants may file a FMRA complaint within 90 days after being served with a copy of first rent stabilized registration.

A FMRA differs from an overcharge complaint as calculations of legal rents are not based on rent stabilization vacancy and renewal leases, but rather by a combination of a formula set by the Rent Guidelines Board and a comparison of rents in similar apartments in the building. In 1998, DHCR changed its policy regarding comparable apartments and this change resulted in a greater number of FMRA complaints being denied or in only minimal awards.

On January 1, 2002, DHCR established a new form (in the nature of a summary notice) that deprives tenants of a fair opportunity to verify information that the landlord submits to DHCR ex parte regarding comparable apartments.

But the comparable apartments that are submitted for consideration by the landlord might have had illegal or improper improvements and therefore improper rent increases. So the tenant's FMRA decision might be based on comparable rents that are themselves illegal.

Such rents ought to be scrutinized, but DHCR denies all attempts to obtain necessary information through the Freedom of Information Law (FOIL) on the grounds that the tenants in the comparable apartments have a right to privacy as to the disclosure of their rents. While the FOIL law does contemplate issues of privacy, many feel DHCR is overreaching in such instances. After all, the information is not in the nature of a personal illness or employment history which are (and should be) subject to the privacy exclusions from FOIL. For years tenant advocates have understood DHCR's concern of privacy is a way to avoid protecting tenants' rights.

And in addition, DHCR utilizes the four year rule for comparable units as well. Tenants therefore cannot challenge or scrutinize the historical rents being used as factors in determining the FMRA. Even if the tenant filed a FMRA in a timely fashion, they are not being allowed to investigate, scrutinize and challenge rents beyond four years, even if such rents are illegal.

When it comes to helping the landlords, DHCR is bending over backwards. In the pre-Pataki era, comparables were part of the equation, but only if landlords actually submitted the comparable information. Now DHCR goes out of the way to search its own records. And while comparables should be restricted to similar units within the same building, DHCR is apparently allowing owners to submit alleged comparables from units outside the immediate building.
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