DHCR Properly Limited Attorney Fees Awarded to Tenants in Regina Case Rent Recalculation

In November 2009, tenants complained to the DHCR of rent overcharge and improper deregulation. In 2014, the DRA ruled for tenants and ordered landlord to refund $285,390, with interest. The DHCR denied PARs filed by both sides, and found that the DRA properly pierced the four-year base date to reach the last stabilized rent prior to improper deregulation, correctly applied legal increases to that rent, there was no fraudulent scheme to deregulate, and no willful overcharge. The DHCR denied tenants' request for attorney's fees. Landlord and tenants both filed an Article 78 court appeal of the DHCR's decision, which was denied. Both sides then appealed, and the First Dept. annulled the DHCR's overcharge calculation and sent the case back to the DHCR to recalculate the overcharge and proper base date rent.

The DHCR then appealed, resulting in the Court of Appeals' April 2, 2020, decision in Regina Metro. Co. LLC v. DHCR. The Regina court found that the First Dept. had properly annulled the DHCR's overcharge calculation on the basis that it violated the four-year rule. The case was sent back to the DHCR for recalculation. The DHCR recalculated the overcharge using a base date rent from four years before the overcharge complaint filing date in November 2009. The DHCR also applied the Regina case rulings that a willfulness finding generally didn't apply to cases involving Roberts-type J-51 scenarios. And rent freezing due to registration irregularities didn't apply to an overcharge case resulting from the Roberts decision. Tenants' initial $5,195 rent was the legal base date rent, and the total overcharge from subsequent rent increases was $20,487. The DHCR did award tenants attorney's fees based on a rate of $425 per hour. HSTPA required assessment of reasonable costs and attorney's fees in a proceeding, and the Regina court found no retroactivity issue with an attorney's fee award. The DHCR awarded tenants $2,670 in attorney's fees (see LVT #31305). 

In response, tenants filed a second Article 78 petition, seeking more attorney's fees, which the court denied in 2022. Tenants then appealed further. The First Dept. ruled against tenants. The rent calculation complied with the rulings of New York's highest court concerning the HSTPA that prevented retroactive overcharge calculations. So the DHCR properly limited the recovery of attorney's fees to the amount tenants spent while their overcharge proceeding was pending before the DRA.