Prior Landlord Collected Brokerage Fee

Tenant complained of a rent overcharge. She claimed that prior landlord collected an illegal brokerage fee from her when she rented the apartment. The DRA ruled for tenant and ordered new landlord to refund $1,000. Landlord appealed, arguing that this wasn't a normal rent overcharge claim, and that it shouldn't be responsible for refunding the brokerage fee collected by prior landlord. There was no way to determine this overcharge from rent records when it bought the building. Landlord said that this was more like collection of excess rent in a fair market rent appeal proceeding. Under the Rent Stabilization Code, current landlords aren't liable for excess rent collected by prior landlords. The DHCR ruled against landlord. Stabilized rents outside New York City aren't subject to fair market rent appeals. And under the Tenant Protection Regulations, collection of a brokerage fee by landlord is a rent overcharge, and new landlords generally are responsible for any overcharge collected by prior landlords.

Lexington Hills LLC/Bronstein Properties LLC: DHCR Adm. Rev. Dckt. No. SH910045RO (9/29/04) [2-pg. doc.]