On-Time Rent Clause Reduced Claimed Preferential Rent to Legal Regulated Rent

Rent-stabilized tenant complained to the DHCR in 2018 of rent overcharge. The DRA ruled for tenant and directed landlord to refund $15,873, including triple damages. Landlord appealed and lost. The DRA had properly reduced the claimed legal rent charged by landlord. The DHCR pointed out that appellate courts in both the First and Second Department had upheld DHCR rulings that on-time rent discount clauses were invalid, that such "on-time" rents weren't preferential rents, and that these on-time rents amounts became the legal regulated rents. The DHCR pointed out that rent arrears that occurred during an overcharge period didn't rebut the presumption of willful overcharge. The DHCR also noted that a portion of the overcharge was owed to OTDA since it came from rent paid to landlord on tenant's behalf by ERAP. 

Hillside Park 168 LLC: DHCR Adm. Rev. Docket No. MQ110012RO (1/21/25)[4-pg. document]