Rent Overcharge Resulting from 1995 Rent Reduction Order Included Triple Damages

Rent-stabilized tenant complained to the DHCR of rent overcharge in late 2018. Specifically, tenant claimed that landlord charged improper MCI rent increases between Sept. 1 - Dec. 31, 2018. Landlord had bought the building in 2016 and claimed that all rent increases were correct. The DRA ruled against landlord and reduced the base date rent from $742 to $291 based on a pre-base date rent reduction order that was still in effect. The total overcharge, including triple damages and interest, was $143,500.

Landlord appealed and lost. Landlord argued that the scope of the overcharge complaint should have been limited to the specific grounds raised by tenant concerning the MCI increase. The DHCR stated that, in general, the DRA wasn't limited by the specific allegations of a tenant's overcharge complaint and may review the entire four-year rental history of an apartment. The 2010 Court of Appeals ruling in Cintron v. Calogero also permitted the DHCR to consider pre-base date rent reduction orders when setting the base date rent. Since the collectible rent was frozen, landlord couldn't collect any MCI rent increase while the 1995 rent reduction order was still in effect. The DHCR also upheld triple damages because the Cintron decision was issued eight years before tenant filed his overcharge complaint and landlord failed to refund overcharges although placed on notice by the DRA of the rent reduction order and of the possibility of triple damages. [Download a PDF of the decision here.]

BSF 250-252 Sherman Holding, LLC: DHCR Adm. Rev. docket No. LT4100016RO (11/21/23)[5-page document]