Landlord and Tenant Both Responsible for Overcharge of Subtenant

Subtenant complained of rent overcharge and failure to renew a rent-stabilized lease in his name. Tenant Dennis Dziena Associates had rented the apartment from landlord in 1995. In 2003, tenant sublet the apartment to subtenant. In 2008, a DHCR attorney wrote to the apartment “occupant,” noting that the 2008 apartment registration listed Dennis Dziena Associates as tenant of many apartments in the building and asking the names of actual tenants living in the apartment and the rents they paid. Subtenant then filed his complaints. The DRA ruled for subtenant and found both tenant and landlord jointly and individually responsible for willful rent overcharge.

Landlord and tenant appealed and lost. Landlord claimed that it wasn’t responsible for the overcharge by tenant because it had no relationship with tenant. But landlord knew or should have known about the illegal subletting because it rented 23 apartments to tenant’s entity. Landlord failed to properly manage the building and its actions enabled the overcharge to take place. The DRA also correctly invalidated the lease between landlord and tenant and established the base date rent using the DHCR’s default formula. The DRA also properly imposed triple damages.

333 East 49th Partnership, LP et al.: DHCR Adm. Rev. Docket No. CS410013RO (7/1/15) [14-pg. doc.]