Overcharge Refund Offset by Rent Nonpayment

Rent-stabilized tenant complained of rent overcharge based on landlord's continued collection of the full legal regulated rent after the DHCR issued a rent reduction order based on a reduction in services. The DRA found an overcharge but ruled that landlord owed no money to tenant based on back rent owed to landlord.

Tenant appealed and lost. Tenant claimed that the DRA should have applied triple damages to the overcharge amount determined. The DHCR disagreed. Despite collecting an overcharge during the first nine months of tenancy, landlord collected no excessive rent from Feb. 1, 2016, and no rent at all from August 2016 onward. Tenant's overcharge complaint was filed on Oct. 24, 2016. Since tenant had stopped paying rent months before the complaint was filed, the requirements of DHCR Policy Statement 89-2 were satisfied as there was no collection of an improper rent at the time of the complaint. And, due to the rent arrears, no refund was necessary. Landlord's rent ledger also showed that it issued a rent credit of $19,476 to tenant to cancel carry-over arrears in March 2017 shortly before filing the rent restoration application, which was granted in October 2017.

Daniels: DHCR Adm. Rev. Docket No. GT410019RT (1/17/20) [3-pg. doc.]