Landlords Can Hike Rents Under New Regulation -- For Now

By Jorge Casuso

Feb. 6 -- A Superior Court judge on Tuesday lifted a temporary injunction against a new Rent Control Board regulation, paving the way for landlords to once again hike the rents to market rates if they can prove tenants are not using their apartments as a primary residence.

The ruling comes three weeks after the rent board overhauled the regulation, which Judge James Bascue ruled gave landlords too much power to set rents and enjoined the board from enforcing in November.

The change gives the rent board the authority to determine the new rental rate based on the rent of comparable units.

“The judge made the determination that we were likely to prevail ultimately,” said Doris Ganga, the board’s general counsel. “But it is not a final determination.”

On April 22, Judge Bascue will hear arguments in the case filed by prominent developer Robert Bisno, who mounted the legal challenge after his landlord used the regulation to raise the rent on his beachfront rent-controlled apartment.

Bisno’s attorney, Allan Abshez, has said the change would not "salvage" the regulation and that the regulation should be put before the voters because it amends the rent control charter.

Under the amended regulation, a hearings officer and the board will set the new rent based on the median rents of comparable units vacated on the property during the previous three years. If there are no such units on the property, the new rent will be based on the median rents of comparable units in the area.

The provision allows landlords and tenants to challenge the new rates if the amenities or condition of the unit is substantially different from that of the comparable units. Either party can set a hearing and must provide the board with reasons in writing for that adjustment.

A total of 120 cases have been filed by landlords since the regulation went into effect on March 15, said Tracy Condon, a spokesperson for the board.

The rent board has rendered 38 decisions -- 25 granting the landlord the right to raise the rent and 13 denying it. About 14 of the cases were on appeal at the time the injunction was granted.

Sixteen rent increases were automatically approved because the tenants did not challenge them.

Of the total cases, 30 were dismissed and nine withdrawn. Twenty-seven cases are pending.