Landlord Must Refund Small Overcharge Resulting from DRIE Calculation Error

Tenant complained to the DHCR of rent overcharge. Tenant received a Disability Rent Increase Exemption (DRIE). This froze her collectible rent at $923.38 per month, but landlord changed the amount on a lease commencing Dec. 1, 2013. Landlord pointed out that tenant's legal regulated rent and preferential rent increased with her Dec. 1, 2013, renewal lease but that the collectible rent under the DRIE program remained frozen at $923.38. The DRA found that the rent was improperly calculated and found an overcharge.

Landlord appealed and won, in part. Tenant's original one-year renewal lease commencing Dec. 1,2014, had a preferential rent of $979.52 and was incorrectly processed by DRIE as being a two-year renewal at a preferential rent of $1,014.22. The DRA properly corrected this error in its calculation chart and adjusted subsequent preferential rents through 2023. The DHCR agreed with landlord that tenant never paid more than the preferential rent amount of $923.38 and therefore wasn't overcharged. However, due to the DRA error, the overcharges represent an incorrect tax benefit adjusted to the landlord. So the overcharges calculated in the RA's chart totaling $824.40 should be refunded to DRIE. The DHCR found that the overcharge wasn't willful and assessed only interest, with a total due DRIE of $824.40 and a total due to tenant of $469.19.

Adee & Lester LP: DHCR Adm. Rev. Docket No. LN610022RO (4/13/23) [3-pg. doc.]