Tenant Can Deduct Overcharge from Monthly Rent

Rent-stabilized tenant complained of a rent overcharge. The DRA ruled for tenant and ordered landlord, which was a receiver, to refund the overcharge. Landlord appealed, claiming that under Rent Stabilization Code Section 2526.1(f)(2)(ii), a receiver isn't required to pay back the portion of an overcharge collected by another landlord. The DHCR ruled against landlord. Rent Stabilization Code Section 2526.1(e) allows tenant to recover an overcharge from "the present owner" by deducting it from the monthly rent due at a rate of 20 percent of the overcharges. So tenant could deduct the full amount of the overcharge in installments from the landlord-receiver.

Greene: DHCR Adm. Rev. Docket No. YK410022RO (5/5/11) [4-pg. doc.]