No Triple Damages Where Landlord Inadvertently Failed to Preserve Preferential Rent

Rent-stabilized tenant complained of rent overcharge in 2018 and claimed fraud by landlord after landlord discontinued a claimed preferential rent. The DRA ruled against tenant and found no overcharge.

Tenant appealed and won, in part. Tenant showed that landlord didn't preserve a higher legal regulated rent in tenant's vacancy lease, despite giving a preferential rent rider. Both the lease and the rider stated only a rent of $1,350 per month, which landlord intended to be a preferential rent under the vacancy lease. The DHCR gave greater weight to the lease rider submitted with the original vacancy lease rather than the one submitted by landlord in response to tenant's PAR. The original was signed by tenant and didn't contain any of the inconsistencies seen in landlord's copy of that document. So, landlord's attempt to claim a higher legal regulated rent in tenant's first renewal lease, starting in 2004, was incorrect due to landlord's waiver of a preferential rent in tenant's vacancy lease by failure to differentiate between any preferential rent and a higher legal regulated rent.

Still, there was no fraudulent scheme to deregulate the apartment, and the default rent formula wasn't warranted. The base date rent was $1,993, and the total rent overcharge was $10,050, including interest. Triple damages weren't warranted based on review of a 20-year-old preferential rent rider, landlord's intent to charge a preferential rent, and the lack of proof of a scheme to deregulate. The DHCR also denied attorney's fees to tenant based on a lack of itemized legal bills submitted with tenant's request.

Jackson: DHCR Adm. Rev. Docket No. JP410034RT (2/25/22)[5-pg. document]