Change in Rent Stabilization Code Didn't Create Hardship for Landlord

Tenant complained of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $35,000, including interest. Landlord appealed and lost. Tenant's apartment was temporarily exempt from rent stabilization due to owner occupancy on the base rent date. Landlord claimed that it was therefore entitled to charge a free market rent when tenant moved in after that. But Rent Stabilization Code (RSC) Section 2526.1(a)(3)(iii) was amended on Jan. 8, 2014, to no longer permit setting a free market rent after temporary exemption from rent stabilization. Landlord argued that RSC Section 2527.7 barred applying an amended RSC provision that caused undue hardship or prejudice to landlord. But, although the DRA substantially lowered tenant's rent and found a substantial rent overcharge, this didn't cause undue hardship or prejudice to landlord. The DRA did consider landlord's reliance on the former RSC provision by not assessing triple damages on the overcharge.

Tsui: DHCR Adm. Rev. Docket No. FM210058RO (11/10/17) [3-pg. doc.]