Default Formula Applied to Rent Overcharge Proceeding

The DHCR’s Tenant Protection Unit (TPU) conducted an Individual Apartment Improvement (IAI) audit for tenant’s apartment in 2013 based on review of the registered rents. TPU asked landlord to submit proof of the IAI costs that substantially increased the apartment’s rent between 2010 and 2011. Landlord’s new managing agent responded but didn’t submit the documents requested by TPU. TPU referred the case to the DRA in 2014. The DRA commenced a rent overcharge proceeding and set the base rent date as June 25, 2010. The DRA found there was a rent overcharge after landlord failed to submit any rent history records and ordered landlord to refund $28,556, including triple damages.

Landlord appealed and lost. Landlord claimed that it didn’t receive notice of the DRA’s overcharge proceeding, that the default formula shouldn’t be applied because landlord now submitted rent history records, and that there was no overcharge because no rent had been paid during the claimed overcharge period. The DRA mailed several notices to landlord and delivery was presumed absent any proof of irregularities. The DHCR wouldn't consider new evidence submitted for the first time with landlord’s PAR. And the fact that tenant moved out in August 2012 and the apartment remained vacant since then had no bearing on the DRA’s order. But the DHCR acknowledged that it couldn’t compel payment to a tenant who never paid any rent, was no longer in occupancy, and had left no forwarding address.

145 Avenue C, LLC: DHCR Adm. Rev. Docket No. CV410052RO (4/8/15) [6-pg. doc.]