Tenant's Vacancy Lease Didn't Contain Notice of Preferential Rent

Tenant complained to the DHCR in 2017 of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $40,051, including triple damages and interest, and after deducting $20,116 in unpaid rent that remained due. Landlord appealed and lost. The DRA correctly set the base date rent as Feb. 27, 2013, four years prior to the pre-HSTPA complaint filing date in 2017. Tenant's vacancy lease was in effect on the base date. Landlord claimed that the legal regulated rent (LRR) was higher than a preferential rent charged on the base rent date. But only one rent was set forth on the 2012 vacancy lease, so this became the legal rent upon which tenant's renewal lease rents must be based. Landlord claimed that there was no willful rent overcharge because any overcharge resulted from actions by the prior owner. But RSC Section 2526.1(f)(2) provides that a current owner is responsible for all overcharge penalties, including penalties based on overcharges collected by any prior owner absent special circumstances that don't apply in this case. 

East River Group, LLC: DHCR Adm. Rev. Docket No. KU110008RO (3/10/23)[5-pg. document]