Landlord Who Refunded Overcharge Almost Four Years After Complaint Filed Avoids Triple Damages

Rent-stabilized tenant complained to the DHCR of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $38,315, including triple damages. Landlord appealed and won. Landlord pointed out that it issued a refund check for $36,305, along with two months of rent credits in January and February 2022. It did this before the DRA sent landlord a Notice of Treble Damages in connection with the rent overcharge proceeding. So landlord argued that it had rebutted the presumption of willful overcharge.

The DHCR agreed. At the time of the rent overcharge, DHCR Policy Statement 89-2 permitted landlords to avoid triple damages by refunding the overcharge in response to a tenant complaint. Although the refund was made 42 months after the complaint was filed, it was issued before May 2022 when the DRA sent landlord a Final Notice to Owner - Imposition of Treble Damages on Overcharge. The DHCR recognized that there was some continuing overcharges after landlord made the refund but the remaining minimal overcharge was $5.61 per month for seven months. This didn't warrant a finding of willful overcharge. The total remaining overcharge with interest only was $1,863.72.

Castle Apts. 45th St. Owners, LLC: DHCR Adm. Rev. Docket No. LO110009RO (6/6/23)[3-pg. document]