Landlord Reduced Tenant's Rent Prior to Rent Overcharge Finding

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant in part, finding there had been an overcharge that had been refunded, so no money was owed to tenant.

Tenant appealed and lost. Landlord proved that it had made individual apartment improvements (IAIs) to the apartment before tenant moved in. Landlord's documentation was supported by DHCR inspection. And the DHCR's inspection results outweighed tenant's impressions and the opinion of tenant's expert. Landlord submitted a signed contractor agreement, a sworn statement from the contractor and invoices, along with cancelled checks. And the DRA found no evidence of a scheme to fraudulently deregulate the apartment. And no triple damages were warranted since landlord had reduced tenant's rent two years before the DRA issued its decision. Landlord in fact had reduced tenant's rent to below the legal rent, resulting in an underpayment of rent that acted as a "refund" of any overcharge. This gave landlord a safe harbor against pre-HSTPA triple damages. 

Hernandez: DHCR Adm. Rev. Docket No. JP410039RT (12/2/21)[6-pg. document]