Overcharge Resulted from Collection of Owner-Affiliated Broker's Fee

Rent-stabilized tenant complained of rent overcharge, claiming that she was charged an illegal broker's fee, application fee, key charge, and excessive late fees. The DRA ruled for tenant based on a prior DHCR decision finding that, since there was an affiliation between the broker and landlord, all fees that were charged and collected by the broker were illegal. Landlord was directed to refund the broker fee, key charge, and credit check fee. Landlord could collect late fees not more than 5 percent of tenant's collectable rent.

Landlord appealed and lost. Landlord pointed out that in another case the DRA found that there was no affiliation between the broker and landlord. But landlord had appealed the first other decision and the court upheld the DHCR's ruling that an improper broker's fee was charged. The second DRA decision, cited by landlord, didn't make a determination as to the relationship between landlord and the broker but merely stated that the tenant in that case paid a broker's fee to the same broker. So, the second DRA decision didn't overturn the prior court decision. 

Jamaica Seven LLC: DHCR Adm. Rev. Docket No. GM110023RO (11/19/18) [3-pg. doc.]