Landlord Overcharged Hotel-Stabilized Tenant

Hotel-stabilized tenant complained of a rent overcharge. The DRA ruled for tenant and ordered landlord to refund $2,478, including triple damages. Landlord appealed to the DHCR and lost. The rent roll submitted by landlord didn't show how many vacant units were in the building. It listed only the number of rooms that landlord claimed were rented and, of that number, only those claimed to be rented to rent-stabilized tenants. Since landlord didn't provide information on the total number of rooms in the building, which should have included all dwelling rooms, whether occupied or vacant, it hadn't proven that 85 percent of the total rooms in the hotel were occupied by rent-stabilized tenants who paid no more than the legal regulated rent on Oct. 1, 2008. Landlord then filed an Article 78 court appeal, claiming that the DHCR's decision was arbitrary and unreasonable.  

The court ruled against landlord. The DHCR's interpretation of Hotel Rent Guidelines Order No. 28 was rational, as well as its imposition of triple damages. The plain language of the Order required that the denominator include all residential units, and the numerator include the number of units occupied by permanent rent-stabilized or rent-controlled tenants. Landlord failed to submit evidence that 85 percent of the total units of the building were occupied by rent-stabilized tenants.

1234 Broadway v. DHCR: Index No. 100238/13, NYLJ No. 1202619557506 (Sup. Ct. NY; 9/18/13; Hunter Jr., J)