DHCR Applies Default Method for $68,000 Overcharge

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $68,000, including triple damages. The DRA set the base date rent by using the DHCR’s default formula #1. Landlord appealed and lost. Landlord bought the building in 2010 and claimed that the apartment was vacant on the 2009 base rent date, and then rented to prior tenant for $1,360 per month. Therefore, tenant’s initial rent of $1,490 wasn’t an overcharge. Landlord also had submitted proof of individual apartment improvements (IAIs) costing $35,000. But landlord didn’t submit proof of the base date rent despite several requests from the DRA. And landlord never previously claimed that the apartment was vacant on the base date. The DRA correctly used the default formula, which froze the rent from the base date and didn’t permit the addition of rent increases, including rent guideline increases and IAI increases. The DRA also correctly imposed triple damages as landlord’s failure to justify the legality of tenant’s rent supported a finding of willfulness.

MK Realty Group LLC: DHCR Adm. Rev. Docket No. DX610006RO (7/28/16) [5-pg. doc.]