No Triple Damages Where Overcharge Due to Improper Vacancy Deregulation

Tenant complained of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $11,415, including interest. Tenant appealed and lost. Tenant claimed that the overcharge was willful and that triple damages should have been applied. Landlord continued to collect a market rent and didn’t register tenant’s apartment for four years after New York’s highest court ruled in Roberts v. Tishman Speyers that landlords couldn’t apply vacancy deregulation while a building received J-51 tax benefits. But the DHCR found that landlord legitimately thought it could properly deregulate the apartment when tenant moved in in 2002 based on the DHCR’s policy. So the overcharge wasn’t willful. The DRA also correctly calculated the initial legal rent for the apartment and allowed guideline increases for the leases signed by landlord and tenant. Landlord also filed all apartment rent registrations since the base date prior to issuance of the DRA’s order. In the absence of a clearly defined “grace period” for not requiring landlord to self-apply the Roberts decision, the DHCR also found it would be “impractical” for the DHCR to determine on a case-by-case basis when a particular landlord should have self-applied Roberts. 

Messina: DHCR Adm. Rev. Docket No. ER410066RT (12/22/16) [4-pg. doc.]