Overcharge Resulting from Improper Deregulation Results in Triple Damages

Tenant complained of rent overcharge. The DRA ruled for tenant and found a total overcharge of $8,500, including triple damages and interest. But no refund was due because tenant owed landlord back rent of $14,550. Landlord had improperly deregulated tenant's apartment while the building received J-51 tax benefits. Landlord appealed and lost. Landlord argued that triple damages shouldn't apply because it acted in good faith in deregulating the apartment prior to the Court of Appeals' 2009 decision in Roberts v. Tishman Speyers. Landlord also disputed the DRA's invalidation of a discount clause in tenant's lease. But the DRA properly ignored the rents charged prior to the May 30, 2011, base date. The rent charged on the base date was $1,450. This and other low rents in subsequent years paid by tenant were later incorrectly registered as preferential rents. The discount clause was in fact an impermissible late fee provision. The higher rent figure provided in tenant's first lease and all subsequent leases wasn't part of the legal regulated rent. Landlord also didn't rebut the presumption of willfulness.

ST Equities, LLC: DHCR Adm. Rev. Docket No. ET210050RO (4/24/17) [4-pg. doc.]