Landlord Ineligible for Low Rent Surcharge

Tenant complained of a rent overcharge. The DRA ruled for tenant, and landlord appealed. The DHCR ruled against landlord. Landlord had charged tenant a $15 surcharge under Rent Guideline No. 18 because tenant's rent was less than $350 on Sept. 30, 1986. At the time, the rent surcharge was proper. But landlord had a pending MCI application and later got a retroactive rent increase for the MCI. As a result, tenant's rent on Sept. 30, 1986, with the MCI increase, was now more than $350 for 21 months when landlord had collected the surcharge. So, landlord had to refund the surcharge to tenant. Landlord argued that it couldn't collect more than a 6 percent MCI increase each year, so tenant's rent during that period didn't actually go up above $350. But the DHCR ruled that, for purposes of calculating the lawful rent on the date in question, the full amount of the MCI increase was added to tenant's rent.

2106 Bronx Park East, Apt. 3C: DHCR Adm. Rev. Dckt. No. HI 620028-RO (12/17/93) [3-page document]