Landlord's Application of Overcharge Refund to Security Deposit Tenant Owed Didn't Void Triple Damages

Rent-stabilized tenant complained of rent overcharge in 2018. The DRA ruled for tenant and ordered landlord to refund a total of $386, including triple damages. In 2017, landlord had increased tenant's monthly rent from $1,542 to $1,555 without providing a renewal lease. The DRA also found that tenant owed landlord $748 for his security deposit and that this amount was reflected as a refund in the DRA's calculations.

Landlord appealed and lost. Landlord claimed triple damages shouldn't apply. It had refunded any overcharge to tenant by applying overpayments to tenant's outstanding security deposit. But, under DHCR Policy Statement 89-2 and Rent Stabilization Code Section 2526.1, to avoid the imposition of triple damages, the refund must be the excess rent collected plus interest and given to the tenant. A refund won't be found sufficient to avoid imposition of triple damages when a landlord credits overpayments against a security deposit owned by tenant.

Hillside Park 168 LLC: DHCR Adm. Rev. Docket No. JO110040RO (7/15/21)[4-pg. document]