Landlord Must Divide Overcharge Refund Among Co-Tenants

Deregulated tenant complained to the DHCR of rent overcharge and improper deregulation. Tenant moved in on Jan. 1, 2013, at a monthly rent of $2,550. Prior tenant's last rent was $849. Landlord claimed that it made individual apartment improvements (IAIs) costing $40,000 before tenant moved in. The DRA ruled for tenant and found that the monthly base date rent was $518. The DRA directed landlord to refund $70,598, including triple damages.

Tenant and landlord both appealed and lost. Tenant claimed that landlord didn't prove its claimed IAI costs. But landlord submitted sufficient documentation of the IAIs, including a signed contract and cancelled checks. Given the extent of the apartment renovations, an itemization of each work item wasn't required. Landlord also submitted a copy of a DOB permit for the work performed. DHCR inspection also supported the IAI claim. Landlord claimed that tenant hadn't paid rent for extended periods and therefore no rent overcharge should be found for those periods. But full rent payment had been made for the periods in question.

Several co-tenants occupied the apartment. There was no agreement concerning the monthly rent contribution from each tenant. It was reasonable for the DRA to direct landlord to divide the overcharge proportionally among the tenants. The DRA also reasonably ordered that, with respect to any rent arrears, the order was without prejudice to landlord deducting rent arrears owed by tenant from the total overcharge refund due. 

Pelczar/Sun Wei Chung, Inc.: DHCR Adm. Rev. Docket Nos. GM410043RT, GM410032RO (3/7/19) [7-pg. doc.]