Rent Overcharge Over $66K Due to Outstanding 2000 Rent Reduction Order

Rent-stabilized tenant complained in 2017 of rent overcharge based on an outstanding DHCR rent reduction order based on a reduction in services that had been issued in 2000 without any subsequent rent restoration order. The DRA ruled for tenant, finding that the base date rent was $646 while the collectible rent was $430. The total overcharge, with triple damages and interest, was $66,896.

Landlord appealed and lost. Landlord claimed that upon receiving notice of tenant's complaint it requested review of the rent reduction case file from the DHCR but that the DHCR responded stating that the case file contents had been disposed of in accordance with an approved retention and disposal schedule. Landlord also claimed that no one at the building had complained about a reduction in services for 20 years and therefore it was an error to base an overcharge finding on an "ancient" rent reduction order. Landlord also objected to the assessment of triple damages.

The DHCR noted that the building-wide rent reduction order froze tenant's rent at $430 and imposed a continuing obligation on landlord to restore the rent. Pursuant to the 2010 Court of Appeals decision in Cintron v. Calogero, the rent reduction order remained part of the rental history considered in the overcharge proceeding. Since the DHCR had issued the rent reduction order in 2000, it was irrelevant whether anyone complained about any condition in the past four years and the condition underlying the rent reduction order didn't become de minimis.

Landlord's claim that the DHCR's disposal of the rent reduction case file prevented it from responding to that matter was incorrect because the DRA's rent reduction order itself was still available. Landlord was put on notice of the rent reduction order and its effect in the notice of triple damages issued in the overcharge case before the DRA issued its ruling. Landlord didn't rebut the presumption of willful rent overcharge in this case.

138 Realty (2013) LLC: DHCR Adm. Rev. Docket No. JV410030RO (12/21/21)[6-pg. document]