Prior Pre-Base Date Overcharge Ruling Applied in Response to New Tenant's Complaint

Rent-stabilized tenant complained to the DHCR of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $261,960, including interest and triple damages. Landlord appealed and lost. Landlord claimed that the apartment was unregulated because the legal regulated rent reached $2,200 per month in 2009. Landlord also argued that the DRA erred in using a pre-base date overcharge order from 2006 to establish the 2013 base date rent, and that there was no willful overcharge. Landlord argued that the 2010 decision of New York's highest court in Cintron v. Calogero applied only to pre-base date DHCR rent reduction orders, and that the DHCR had no grounds to apply a pre-base date overcharge ruling to find a rent overcharge in this case.

The DHCR disagreed and affirmed the DRA's ruling that the prior, 2006 rent overcharge order placed a "continuing obligation" on landlord to base future rental increases on the legal rent determined in that order. The DHCR noted that in Renaissance Equity Holdings v. DHCR (Sup. Ct. Kings Co. 2022), a court had ruled that an earlier overcharge ruling was akin to a rent reduction ruling that the DHCR was bound to follow under the Cintron court decision. Here, the DHCR had set the apartment rent at $537 per month in its 2006 order, and landlord didn't prove that the rent legally went over the deregulation threshold in 2009 when it charged $2,200 per month for the apartment. The DRA did correctly add guideline increases to the $527 rent to bring the base rent up to $676 per month in 2014. Landlord also stepped into the shoes of prior owners when it bought the building and couldn't escape triple damages due to lack of information about the apartment's legal rent.

West 147th Street Equities LLC: DHCR Adm. Rev. Docket No. LR410039RO (8/8/23)[3-pg. document]