Tenant Overcharged Subtenant

Subtenant complained that she was overcharged by rent-stabilized tenant. Subtenant paid tenant $1,400 per month. Tenant claimed that the legal regulated rent was $1,500 per month, so there was no overcharge. The DRA ruled for subtenant and ordered tenant to refund $28,000, including triple damages. Tenant appealed and lost. Tenant claimed that it had an agreement to lend landlord $12,000 for apartment improvement costs. Landlord in return charged tenant a preferential rent of $1,000 per month, gave tenant a monthly rent credit of $500 against a $1,500 legal rent, and agreed to register $1,000 as a preferential rent. But the apartment was vacant on the base date, and the actual rent paid by tenant as the first tenant thereafter was $1,000 per month. The loan and repayment agreement was separate from and would not be considered a rent payment agreement. Also, landlord registered the 2009 and 2010 rent as $1,085, supporting the DRA's ruling that the legal base rent was $1,000. Tenant charged subtenant $400 more per month than the legal rent for an unfurnished apartment. This was a willful rent overcharge.

Huang: DHCR Adm. Rev. Docket No. YD410034RT (9/9/10) [4-pg. doc.]