Landlord Waived Flat Rate Renewal Increase Under RGBO 41

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $605, including triple damages. Landlord appealed and won, in part. Landlord had charged tenant a 6 percent renewal increase for the lease term between May 1, 2010, and April 30, 2012. At the time, in the case of Casado v. Markus, a lower court had disallowed a $60 flat-rate increase for low rents that had been approved under Rent Guidelines Board Order (RGBO) No. 41. Later, New York's highest court upheld the $60 increase. So landlord used the higher rent it could have charged under tenant's 2010 renewal lease as the base rent for calculating tenant's rent under his 2012 renewal lease. Landlord argued that the DHCR renewal lease forms didn't allow him to modify the lease to preserve the higher rent on the form. But landlord had included both the higher rent and the rent collected in its annual rent registration.

The DHCR ruled that because landlord didn't notify tenant in the 2010 renewal lease that there was a possibility that the rent might be increased based on a final ruling in the Casado case, landlord had waived the right to collect the higher rent or modify the rent increase contained in the 2010 renewal lease. But landlord had acted in a good faith belief and attempted to notify tenant of the Casado case by including information in the annual apartment registration. So the overcharge wasn't willful, and the triple damages were revoked.

Rosenblum: DHCR Adm. Rev. Docket No. BP210049RO (7/18/14) [3-pg. doc.]