Four-Year Limit on Overcharge Resulting from DHCR's 1994 Rent Freeze

Tenant sued landlord for a rent overcharge and sought triple damages plus attorney's fees. In 1994, the DHCR had reduced tenant's rent based on a finding of a reduction in services. Tenant claimed that he never received a copy of the DHCR's order and that landlord never reduced his rent. Since the DHCR never restored the rent, tenant also said that his rent should have been frozen at a reduced rent of $690 since that time. Tenant claimed that he was entitled to a refund of all overcharges since 1994. Landlord argued that a refund was owed, but argued that the rent should be frozen at the amount being collected four years before tenant filed his overcharge claim. Landlord, who bought the building from prior landlord some time after 1994, also claimed that there was no willful overcharge.
The court ruled that the amount of tenant's overcharge refund was limited by the four-year rule. But the court could also look back to the DHCR's 1994 order and lease documents to determine the rent reduction set by the DHCR order. This was the base rent amount that landlord was allowed to collect four years before tenant filed his overcharge complaint. A trial was needed to determine the amount of the reduced rent, whether the overcharge was willful, and whether tenant was entitled to attorney's fees.

Rich v. East 10th St. Associates LLC: NYLJ, 3/12/09, p. 27, col. 3 (Sup. Ct. NY; Stallman, J)