Landlord Can Deduct Retroactive Portion of Increase from Departing Tenant's Security Deposit

Tenant complained of a rent overcharge. In July 1986 tenant had moved out of the rent-stabilized apartment. In October 1986 the DHCR granted landlord's application for an MCI rent increase. Landlord withheld that portion of the rent increase that was to be applied retroactively ($215) from the departing tenant's security deposit. Tenant claimed that this was illegal. The DRA ruled for tenant and ordered landlord to refund the money withheld. Landlord appealed, arguing that the DHCR had no authority to rule on security deposit issues. And the DRA's own order stated that the rent increase was effective March 1, 1985, and that ''if a stabilized tenant moves from the building on or after the effective date of this order, the owner may immediately charge that tenant the full increase for the period during which the tenant was in possession.'' The DHCR ruled for landlord. Landlord properly interpreted the MCI order; the DRA was in error.

Koeppel & Koeppel: DHCR Adm. Rev. Dckt. No. CD 410049-RO (9/21/95) [3-page document]