Rent Overcharge Based on Miscalculation of MCI Rent Hike Included Triple Damages

Rent-stabilized tenant complained of rent overcharge based on a disputed MCI rent increase. The DRA ruled for tenant and found an overcharge of $544, including triple damages.

Landlord appealed and lost. Landlord was entitled to collect a permanent MCI rent increase of $29.10 per month under a 2018 MCI order made collectible as of Sept. 1, 2018. Landlord also was permitted to collect temporary retroactive MCI rent increases of $174.60 under that order. But RSC Section 2522.4(a)(8) limits the collection of monthly rent increase for an MCI in a 12-month period to 6 percent of the legal regulated rent on June 1, 2017, which was $88.72. This amount was 6 percent of the $1,478.62 legal rent. Landlord therefore was entitled to collect $59.62 in retroactive MCI rent increase plus the permanent increase of $29.10, over the tenant's preferential rent. After passage of HSTPA on June 14, 2019, tenants paying preferential rents could not have their rent increases calculated based on any rents above such preferential rents for the duration of their tenancies. So, landlord was obligated to calculate all guideline rent increase after HSTPA went into effect based on the tenant's preferential rent. The DRA correctly found that landlord collected the overcharge for two years and nine months.

Clarendon Gardens, LLC: DHCR Adm. Rev. Docket No. LN210027RO (7/13/23)[4-pg. document]