No Willful Overcharge Where Landlord Followed pre-Roberts DHCR Policy

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $1,924, with interest. Landlord had refunded more than this amount to tenant in response to the complaint.

Tenant appealed and lost. Tenant claimed that landlord had fraudulently deregulated the apartment. The 2012 base date rent set by the DRA was $900 per month, the amount that tenant paid at that time. A landlord won't be found to have engaged in a fraudulent scheme to deregulate an apartment when the landlord failed to treat an apartment as rent stabilized prior to, and in the time after, issuance of 2009 Roberts court decision when such failure was based on landlord's misunderstanding of the law regarding buildings receiving J-51 tax benefits. Prior to Roberts, the DHCR and real estate industry understanding was that some apartments in buildings receiving J-51 tax benefits could in fact be deregulated. So, failure to treat an apartment as rent regulated in such cases, alone, wasn't proof of any fraud on landlord's part. And, in this case, landlord made a full refund of any overcharge, thus avoiding application of triple damages. 

Finney: DHCR Adm. Rev. Docket No. IS210018RK (7/12/21)[4-pg. document]