Landlord Must Pay Interest on Refunded Overcharge

Rent-stabilized tenant complained of a rent overcharge. The DRA ruled for tenant and ordered landlord to refund the overcharge with interest. Landlord appealed and lost. Landlord claimed that it had refunded the overcharge before tenant filed his complaint, so interest shouldn't be assessed. The overcharge had resulted from an error when landlord offered tenant a one-year renewal lease while tenant had a two-year renewal at a preferential rent in effect. When the error was discovered, landlord gave tenant a rent credit without interest. But Rent Stabilization Code Section 2526.1(a)(1) provides that interest is payable on any overcharge that isn't found to be willful. And the overcharge existed at the time landlord credited tenant's account, so interest must be paid from the date of the first overcharge on or after the base rent date.

2114 Realty LLC: DHCR Adm. Rev. Docket No. YK210009RO (1/31/11) [3-pg. doc.]