Landlord Must Refund Overcharge to Rent-Controlled Tenant

Facts: Tenant complained to the DHCR in 1986 of a rent overcharge. A year later tenant sued landlord, seeking a declaration that his apartment was rent-controlled. The court delayed the DHCR case, and later ruled that tenant had been rent-controlled since 1969, and that his legal monthly rent was $125. In 1991, tenant asked the DHCR to reopen the rent overcharge case. The DRA ruled for tenant, set his monthly rent at $125, and ordered a refund of any overcharge collected from 1984 forward, since that was two years before tenant's complaint was filed. Landlord appealed. The DHCR ruled for landlord, finding that there could be no overcharge refund ordered under the rent control regulations because the amount of the legal rent was no longer ''in dispute.'' Tenant appealed, claiming the DHCR's decision was unreasonable. The court ruled against tenant, and tenant appealed again. Court: Tenant wins. The amount of the legal rent was in dispute when tenant filed his rent overcharge complaint. The court simply delayed any ruling on the overcharge until it was determined whether tenant was subject to rent control. So the DHCR's decision against tenant was irrational, arbitrary, and unreasonable.

Christy v. Lynch: NYLJ, p. 27, col. 6 (3/15/99) (App. Div. 1 Dept.; Rosenberger, JP, Lerner, Rubin, Mazzarelli, JJ)