Landlord Couldn't Collect 2.2% Rent Increase from Tenant Without 421-a Lease Rider

Rent-stabilized tenant complained of rent overcharge in 2017. The DRA ruled for tenant and ordered landlord to refund $4,950, including triple damages for willful overcharge.

Landlord appealed and lost. Landlord argued that, since the building received Real Property Tax Law Section 421-a tax benefits, it was entitled to increase tenant's rent annually by 2.2 percent, in addition to other lawful rent increases. Therefore, the $50 per month overcharge found by the DRA should be reduced to $25 per month, and the total overcharge without triple damages was $825. The DHCR found that, since there was no renewal lease in effect after the base rent date and for the period covered by the DRA's order, landlord wasn't entitled to collect any rent increase. The collectible legal rent remained at $1,250 per month. Any 2.2 percent rent increase permitted under 421-a must be contained in a valid lease executed by the parties which contains a rider signed by tenant acknowledging landlord's right to collect this increase for the tax benefit period. The overcharge also was presumed willful, and landlord presented nothing that could waive the triple damages assessed.

289 Lenox Road LLC: DHCR Adm. Rev. Docket No. IS210012RK (1/26/21) [3-pg. doc.]