Default Method Used to Determine Rent Overcharge

The DHCR commenced an administrative proceeding against landlord for rent overcharge. The DRA ruled for tenant and ordered landlord to refund the overcharge with triple damages. Landlord appealed, and the DHCR denied landlord's PAR. Landlord then filed an Article 78 petition, claiming that the DHCR's decision was arbitrary and unreasonable. Landlord claimed that the DHCR unreasonably applied a default formula and triple damages in determining tenant's legal rent. The court and appeals court ruled against landlord. Landlord failed to submit rent records necessary to establish the legal rent-stabilized rent for tenant's apartment. So, the DHCR had a rational basis for applying the default formula to determine tenant's rent. And the imposition of triple damages had a rational basis since landlord failed to show that the overcharge wasn't willful.

South Lexington Associates, LLC v. DHCR: 93 N.Y.S.3d 582, 2019 NY Slip Op 01605 (App. Div. 2 Dept.; 3/6/19; Dillon, JP, Cohen, Duffy, Christopher, JJ)