New Landlord Must Refund Overcharge Collected by Prior Landlord

The DHCR's Tenant Protection Unit (TPU) filed a rent overcharge complaint on tenant's behalf in 2017, and claimed that the $2,700 rent charged by landlord in December 2014 constituted an overcharge. For the first year of the four-year lookback period, tenant's collectible rent was frozen at $168 per month due to an outstanding rent reduction order. With triple damages and interest, the total overcharge to be refunded was $10,635.

New landlord appealed and lost. Landlord argued that it shouldn't be responsible for overcharges that occurred before it bought the building. But Rent Stabilization Code Section 2526.1(f)(2)(i) provides that current owners are responsible for overcharge penalties, including those collected by a prior owner, in cases decided after new owners buy a building. It was no defense that current landlord wasn't able to obtain rent history records from the prior owner when purchasing the building. [Download PDF of decision here].

197 Madison Holdings LLC: DHCR Adm. Rev. Docket No. JX410019RO (4/6/22)[4-pg. document]