Overcharge Refund Made Too Late to Avoid Triple Damages

Rent-stabilized tenant complained of a rent overcharge. The DRA ruled for tenant and found an overcharge of $11,000, including triple damages. Landlord appealed and lost. Landlord claimed that there was no willful overcharge because it refunded the overcharge to tenant before the DRA issued its order. DHCR Policy Statement 89-2 states that no willful overcharge will be found if landlord adjusts tenant’s rent “within the time afforded to interpose an answer to” a rent overcharge complaint and gives tenant a full refund. The DRA gave landlord notice of tenant’s complaint on Oct. 6, 2008, with 20 days to respond. Landlord didn’t refund the overcharge to tenant until June 4, 2009, after the DRA sent a Final Notice to Owner – Imposition of Treble Damages, on May 27. So landlord’s refund was made too late to avoid triple damages.

554 West 181, LLC: DHCR Adm. Rev. Docket No. XG410064RO (1/6/10) [2-pg. doc.]