No Rent Overcharge Found Despite Outstanding Rent Reduction Order

Rent-stabilized tenant complained in December 2019 to the DHCR of rent overcharge. The DRA ruled for tenant and directed landlord to refund a total overcharge of $1,478, including triple damages, for the period between September 2017, and October 2023. Landlord appealed, pointing out that the DRA failed to credit the full amount of individual apartment improvements (IAIs) demonstrated by landlord.

The DHCR ruled for landlord. Under former RSC Section 2522.4(a)(1), in effect at all relevant times in this case, landlord was entitled to collect an IAI rent increase equal to 1/40th of the cost of improvements made to the apartment before tenant commenced occupancy on Sept. 1, 2017. After adding in the fully allowed IAI increase and freezing the rent to $1,600 due to an outstanding rent reduction order, there was no overcharge because tenant paid no more than $1,600 per month.

428 Stratford LLC: DHCR Adm. Rev. Docket No. MQ210005RO (11/25/24)[5-pg. doc.]