Rent Hike Limited to Costs Stated by Tenant's Consultant

Rent-stabilized tenant complained of a rent overcharge. Tenant claimed that he paid a $1,775 broker fee to Beekman Street Realty, although Beekman had the same address as Stellar Management, the building’s managing agent and although Beekman informed tenant that they were affiliated with Stellar. Landlord claimed that Stellar no longer managed the building and that it spent $45,000 on individual apartment improvements before tenant moved in. Tenant claimed that landlord didn’t make many of the claimed improvements, and his consultant reported that what was done should have cost only $15,000. The DRA ruled against tenant, crediting landlord’s documentation. Since the legal regulated rent after improvements was over $2,000 per month, the apartment was deregulated and there was no overcharge. And since the apartment was deregulated, the DHCR couldn’t rule on the broker fee question.

Tenant appealed and won. Landlord’s documentation didn’t accurately represent the work done in the apartment. Landlord’s contractor proposal wasn’t reliable, and tenant’s consultant provided the only credible proof as to the work performed and the value. Landlord was ordered to refund $16,000, including triple damages. As to the broker fee, tenant failed to prove a connection between the broker and the prior managing agent, so there was no additional overcharge finding.

Littman: DHCR Adm. Rev. Docket No. XB410031RT (10/1/09) [6-pg. doc.]