Landlord Didn't Prove Building Was 85 Percent Occupied by Rent-Regulated Tenants

Rent-stabilized SRO tenant complained of a rent overcharge after landlord increased her monthly rent from $571 to $596. The DHCR ruled for tenant and ordered landlord to refund $2,350, including triple damages. Landlord filed an Article 78 court appeal and lost. The court found that the DHCR reasonably determined that landlord overcharged tenant and that the agency's triple damages award didn't shock the conscience. NYC Rent Guidelines Board Hotel Order No. 38 authorized a 4.5 percent rent increase as long as rent-stabilized or rent-controlled tenants made up less than 85 percent of all tenants in the building. Landlord didn't submit proof on this question to the DHCR. Landlord couldn't claim that the overcharge wasn't willful, since the 2008 rent roll it submitted to the DHCR didn't address the number of vacant units at the building and therefore failed to prove that the building was 85 percent occupied by rent-regulated tenants.

Broadway, LLC v. DHCR: 2013 NY Slip Op 23289, 2013 WL 4712730 (Sup. Ct. NY; 8/22/13; Hunter, J)