No Triple Damages for Tenant Who Wouldn't Accept Overcharge Refund

Tenant complained to the DHCR in 2013 of rent overcharge and improper deregulation of his apartment. The DRA ruled for tenant in part. The apartment was rent stabilized, the legal base date rent was the $1,300 paid by tenant, and there was no indication of fraud warranting lease file review predating the base rent date. But there was an overcharge between January 2011 and November 2014. The DRA found no willful overcharge because landlord had refunded $29,227 to tenant to cover the rent overcharge, and tenant refused to accept the check.

Tenant appealed, again claiming rent fraud, and lost. Tenant then filed an Article 78 court appeal. The court found that tenant had set forth a colorable claim of fraud and sent the case back to the DHCR to investigate whether there had been a fraudulent scheme to deregulate the apartment. The DRA then ruled that there was no proof of a fraudulent scheme to deregulate the unit.

Tenant filed a PAR and argued that any overcharge was willful. The DHCR again ruled against tenant. The fact that prior landlord gave tenant a nonstabilized lease in 2006 was insufficient to prove fraud. Tenant's uncle gave tenant the lease a month before selling the building and paid new landlord to accept the nephew's tenancy. It also didn't matter that tenant's initial lease contained a preferential rent rider. While there appeared to be errors in some of the apartment's rent registrations, these also didn't indicate fraud. The base date rent was reliable. And the new landlord always treated tenant as rent-stabilized and registered the apartment without increasing tenant's rent for four years. Tenant wasn't entitled to triple damages because landlord made the refund in accordance with Amended Policy Statement 89-2, in effect at the time. Tenant also wasn't entitled to attorney's fees because he claimed them for the first time on appeal. 

Aidekman: DHCR Adm. Rev. Docket No. IT410009RT (3/12/21) [10-pg. doc.]