Landlord Must Refund Overcharge to All Tenants Renting Garage Space

Facts: Landlord owned high-rise apartment building subject to rent stabilization under the 421-a tax abatement program. Landlord also owned and operated an adjacent parking garage used by many tenants. In 1981, one tenant complained of a rent overcharge based on excessive garage charges. In 1985, the DHCR ruled for tenant, finding that the garage service was subject to rent stabilization, and to rent guideline increases. The DHCR found that landlord had willfully overcharged tenant, and ordered landlord to pay tenant triple damages. And, the DHCR ruled that refunds, with triple damages, must be made to all tenants in the building ''similarly situated.'' Landlord appealed, claiming that any overcharge refund should be limited to a four-year period because other tenants hadn't filed their complaints before April 1, 1984. Landlord also claimed that the overcharges weren't willful and that the calculations were incorrect. The court ruled against landlord, and landlord appealed again to the state's highest court. Court: Landlord loses. Since the original tenant who complained did so before April 1, 1984, it was proper to make the claims of all tenants the DHCR added to the complaint effective before that date as well. And, as far back as 1983, landlord also advised tenants that they should continue to pay the garage charges ''without prejudice'' to their possible right to an overcharge credit. So the four-year statute of limitations on rent overcharges effective on complaints filed on or after April 1, 1984, didn't apply. Landlord also didn't show that the overcharges weren't willful, so triple damages were appropriate. And the annual 2.2 percent rent increase applicable in 421-a buildings didn't apply to the garage charges.

Matter of Century Tower Associates v. NYS DHCR: NYLJ, p. 29, col. 3 (3/24/94) (Ct. App. NY; Kaye, CJ, Simons, Bellacosa, Smith, Levine, Ciparick, JJ)