Fraud Finding Wouldn't Result in Extended Period of Triple Damages

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $13,727, including triple damages and interest. Tenant appealed, claiming fraud. She said that triple damages should be calculated for more than two years, going back to Dec. 1, 2006, when she moved in, due to the owner's fraud. The DHCR ruled against tenant, who filed an Article 78 court appeal. The case was sent back to the DHCR for further consideration.

The DHCR ruled for tenant in part. Tenant had a HUD Section 8 lease and voucher signed in December 2006, which set the legal rent at $1,100 per month. HUD also issued a certification confirming the contract rent of $1,100. The DRA should have relied on this proof to establish the legal rent on Dec. 1, 2006, and for the next 18 months until HUD issued another certification increasing the contract rent to $1,127.50. This was the legal rent from June 1, 2008, through March 1, 2010. The total overcharge with triple damages and interest was $25,017. The DRA also incorrectly ordered the overcharge refund to be paid to HUD when tenant paid the overcharge. But there was no proof of fraud. And, even if there was fraud, that would be no reason to extend triple damages to a period of four years instead of the two years permitted by the Rent Stabilization Code. 

Williams: DHCR Adm. Rev. Docket No. CT910002RP (10/28/14) [4-pg. doc.]