Tenant Willfully Overcharged Subtenant But Without Illusory Tenancy

Subtenant claimed that she was overcharged by rent-stabilized tenant and that she was entitled to a lease in her own name based on illusory tenancy. The DRO ruled for subtenant in part and ordered tenant to refund $25,000. But the DRO found that landlord had no obligation to issue a lease to subtenant. Subtenant appealed and lost. Tenant also appealed and lost. The DRO properly found no illusory tenancy. The landlord claimed that it didn’t know about the sublet. But, more importantly, tenant sublet the apartment for a temporary period while leaving to take care of her ailing mother. Tenant’s intention was to return to the apartment following the sublet. Tenant left furniture and belongings in the apartment, stayed at the apartment several times during the two year sublet, and continued to control repair issues and communications with landlord. So, even though tenant illegally profited during the sublet, it wasn’t an illusory tenancy. The DRO also properly determined there was a willful rent overcharge. Subtenant wasn’t tenant’s roommate, and tenant had no right to pass along the cost of utility bills or other expenses to subtenant.

DiCarlo/Keithline: DHCR Adm. Rev. Docket Nos. DU410062RT, DU410044RO (3/14/16) [10-pg. doc.]