7-A Administrator Didn't Cause Rent Overcharge

Rent-stabilized tenants complained of rent overcharge. The DRA ruled for tenants and ordered landlord to refund $11,800, including interest. Tenants appealed and won, in part. The DRA had omitted a six-month period of overcharge in its calculation, which was added to the total overcharge refund due. But the DRA correctly found that the overcharge wasn’t willful. The building was operated by a 7-A administrator. Under Rent Stabilization Code Section 2526.1(f)(2)(ii), court-appointed receivers aren’t responsible for treble damages on overcharges collected by owners where records sufficient to establish the legal regulated rent weren’t provided to the receiver. Also, DHCR Policy Statement 93-3 states that triple damages won’t be assessed against a 7-A administrator for overcharges collected by an owner.

Honda & Muradi: DHCR Adm. Rev. Docket No. DW410036RT (4/22/16) [5-pg. doc.]