Tenant Can Continue Deducting Overcharge Amount After 7-A Administrator Appointed

May 31, 2004

LVT Number: 17369

Landlord 7-A administrator sued to evict tenant for nonpayment of rent in 2002. Tenant claimed that no rent was due. In 1999, before the 7-A administrator was appointed, the DHCR had ruled for tenant in an overcharge case and found there was a $16,000 overcharge. The court ruled for tenant and dismissed the case. Landlord appealed and lost. The DHCR order permitted tenant to credit the legal rent each month until the overcharge was fully credited. There was no limit to this in the event of a change in ownership.

Landlord 7-A administrator sued to evict tenant for nonpayment of rent in 2002. Tenant claimed that no rent was due. In 1999, before the 7-A administrator was appointed, the DHCR had ruled for tenant in an overcharge case and found there was a $16,000 overcharge. The court ruled for tenant and dismissed the case. Landlord appealed and lost. The DHCR order permitted tenant to credit the legal rent each month until the overcharge was fully credited. There was no limit to this in the event of a change in ownership. And since tenant had chosen to credit his $400-per-month rent against the overcharge, he no longer legally had the option to get a judgment for the overcharge amount against prior landlord.

Olton v. Hunter: NYLJ, 5/14/04, p. 29, col. 3 (App. T. 1 Dept.; Suarez, PJ, Davis, Schoenfeld, JJ)

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