DHCR Can't Order Security Deposit Refund After Tenant Moves Out

Tenant complained to the DHCR in 2013 of rent overcharge. He lived in a building that received a RPTL 421-g tax abatement. But landlord claimed that the unit was unregulated and had refused to give tenant a renewal lease in 2011. Tenant lived in the apartment between 2005 and 2012.

The DRA ruled for tenant and ordered landlord to refund $5,665, including interest. The DRA found that the base rent date was in 2009 and that the apartment wasn't deregulated because in 2019, New York's highest court ruled in Kuzmich v. 50 Murray Street LLC that an apartment can't be deregulated while receiving 421-g tax benefits. Landlord and tenant both appealed.

The DHCR ruled for landlord in part. The DRA erred by waiving the legal regulated rent to $3,060 as of June 1, 2011. Landlord had submitted a renewal lease showing that the rent increased to $3,315 on June 1, 2011. Although landlord had attached a preferential rent rider, neither side acknowledged that a preferential rent was charged. So the legal rent collected was correct and there was no rent overcharge. The DHCR noted that landlord did waive the 2.25 percent rent guideline increase for RGB Order #42 for the June 1, 2011, renewal lease term by charging tenant the prior rent of $3,315 per month.

The DHCR ruled against tenant, who argued that the DRA failed to address landlord's refusal to renew his lease, find the overcharge was willful, order refund of tenant's security deposit, or award attorney's fees. But the DHCR couldn't order a landlord to restore a tenant to possession after tenant moved out. Since the DHCR had eliminated any overcharges, the issues of triple damages and attorneys's fees were moot. And the DHCR has no jurisdiction to award the full return of a security deposit after a tenant moves out. The DRA properly found that tenant could start a proceeding in court or with other agencies to address a security deposit refund issue. 

JDM Washington Street LLC/Ramondetta: DHCR Adm. Rev. Docket Nos. JQ410008RO, JQ410030RT (12/10/21)[5-pg. document]