Landlord Overcharged Tenant While Building Received RPTL Section 421-g Tax Benefits

Tenant who lived in a building that received RPTL Section 421-g tax benefits complained in 2016 of rent overcharge. The DRA ruled for tenant and directed landlord to refund $14,483, including interest.

Landlord appealed and lost. Landlord argued that the apartment became permanently exempt from rent stabilization on June 30, 2020, when the last rent-stabilized tenant moved out. But the regulatory status of the apartment after the complaining tenant moved out in March 2016 was beyond the scope of tenant's rent overcharge complaint and need not be decided by the DHCR. The DRA properly found that the base date rent was $3,295, which was the actual rent charged and paid four years before the overcharge complaint was filed. It didn't matter if landlord could have collected a higher rent on the base date. The 2020 U.S. Supreme Court decision in 50 Murray Street Acquisition v. Kuzmich didn't create new law but found that landlords were always required to treat 421-g apartments as rent stabilized under Rent Stabilization Law Section 26-504.1. And, unlike J-51 cases, the DHCR wasn't involved in any confusion regarding deregulation of 421-g apartments. 

50 Murray Street Acquisition LLC: DHCR Adm. Rev. Docket No. JV410009RO (12/13/21)[3-pg. document]