Older Rent Records May Determine Overcharge Wasn't Willful

Tenant complained of a rent overcharge. The DRA ruled for tenant and determined the overcharge using the DHCR's default method because landlord didn't submit a lease or rent ledger in effect on the base rent date four years prior to the filing of the complaint. Landlord appealed. Landlord bought the building complex containing 1,500 apartments just four months before tenant filed his complaint, and claimed that it was overburdened when trying to locate documents. Landlord had also submitted to the DRA a pre-base date lease, and argued that the DHCR could look to annual rent registration statements and MCI applications listing apartment rents to determine the base date rent. Landlord also argued that the overcharge wasn't willful.
The DHCR ruled for landlord in part. The DHCR can't look at rent records that predate the base rent date to determine the base date rent. Rent registration statements and MCI application data are merely report statements made by landlord and can't be considered as rent history records. But landlord did submit to the DRA a copy of the lease in effect before the base rent date. This could be reviewed for purposes of determining whether the overcharge was willful. That lease listed a rent that, if updated by standard allowable guidelines increases, would result in a rent at least equal to the rent charged tenant. Within one week after receiving a final default notice from the DRA stating the amount of the legal rent plus interest under the default formula, landlord sent tenant a check for the full amount. So landlord overcame the presumption that the overcharge was willful, and the triple damages were revoked. The total refund due and paid to tenant was $6,124.

Eastchester Heights: DHCR Adm. Rev. Docket No. WD610042RO (9/25/08) [3-pg. doc.]