Rent Reduction Order Still in Effect Resulted in $59,000 Overcharge

The DHCR's Tenant Protection Unit (TPU) conducted an audit of an apartment's registered rent-stabilized rent. After finding that landlord hadn't fully substantiated the registered rent, TPU filed a rent overcharge complaint on tenant's behalf in 2017. The DRA ruled for tenant and ordered landlord to refund $59,060, including interest.

Landlord appealed and lost. A DHCR service reduction order had been issued that froze the apartment rent at $160 per month and prevented future apartment deregulation while the rent reduction order remained in effect. Since 2014, landlord collected monthly rent from new tenant of $3,200. It was undisputed that the service reduction order remained in effect at the time current landlord bought the building. And, as ruled by New York's highest court in Cintron v. Calogero (2010), rent reduction orders place a continuing obligation on landlords to reduce and freeze the legal rent, and are part of the rental history that the DHCR must consider if such orders are still in effect within the overcharge lookback period. Here, the DHCR rent reduction order issued prior to the base date imposed a duty on landlord not to increase the rent until a DHCR rent restoration order was issued. 

197 Madison Holdings LLC: DHCR Adm. Rev. Docket No. JX410021RO (3/23/22)[3-pg. document]