Landlord Didn't Prove Substantial Rehabilitation

Tenant complained of a rent overcharge. Landlord claimed that tenant's building wasn't rent stabilized. Landlord said that the building was substantially rehabilitated in 1994. The DRA ruled against landlord and found there was a willful rent overcharge. Landlord was ordered to refund $85,000 to tenant. Landlord appealed. The DHCR ruled for landlord in part. Landlord claimed that the building, at 236-240 West 64th Street was substantially rehabilitated with an adjoining building at 244-248 West 64th Street. The DRA had ruled previously that 244-248 West 64th Street was exempt from regulation due to substantial rehabilitation. But landlord didn't submit any proof of the rehabilitation of 236-240 with its prior application. And landlord's explanation for why it submitted a contract addendum for 236-240 only in response to tenant's complaint wasn't convincing. The contract addendum also wasn't signed and didn't specify the work done. And the prior ruling was only by the DRA. So it had no value as precedent. However, the DHCR found that landlord could reasonably have believed that tenant's apartment was deregulated and so the overcharge wasn't willful. The overcharge finding was reduced to $35,000.

63rd West Realty LLC: DHCR Adm. Rev. Dckt. No. SL410015RP (1/7/05) [4-pg. doc.]