Default Formula Properly Applied to Overcharge Claim

Rent-stabilized tenant complained to the DHCR of rent overcharge in 2020. Despite a number of granted extensions, landlord didn't submit any rent history records. The DRA then ruled for tenant and set the base date rent using the statutory default formula that set the legal rent using the lowest stabilized rent in the building for a same-sized apartment. The DRA found an overcharge for an eight-month period totalling $25,341, including triple damages.

Landlord appealed and lost. Landlord claimed that it bought the building in 2016 pursuant to a mortgage foreclosure action, and had received no rent history records at the closing. Landlord also claimed that the apartment was renovated before the complaining tenant moved in, and that the default formula shouldn't have been applied. But the DHCR wouldn't consider landlord's arguments concerning the default formula, post base-date rent increases, or evidence of a judicial sale/bankruptcy acquisition since these claims weren't made before the DRA. The DRA gave landlord a number of extensions, including a "final" extension,"  to submit an answer to the complaint, and landlord failed to do so. Landlord offered no reasonable excuse for failing to submit proof to the DRA, even after obtaining requested copies of the DRA file through a FOIL request. The default formula was properly applied in this case. 

204 East 112 LLC: DHCR Adm. Rev. Docket No. MT410021RO (1/14/25)[4-pg. document]