On-Time Rent Concession Resulted in Reduction of Legal Regulated Rent

Rent-stabilized tenant complained of rent overcharge. The DHCR ruled for tenant, imposed triple damages, and reduced the legal rent. Landlord filed an Article 78 court appeal, claiming that the DHCR's decision was arbitrary and unreasonable. The court ruled against landlord, who appealed and lost. The DHCR's finding of overcharge was based on an "on-time" provision in tenant's lease and was rational. The higher rent set forth in the lease, which tenant would have to pay if he didn't pay monthly rent by the fifth day of the month, didn't make the lower rent a preferential rent. Tenant's lease in fact specified that the lower, on-time payment amount wasn't a preferential rent. The conditional temporary concession in tenant's lease was unenforceable, and the DHCR properly exercised its authority to rule that the discounted rent was the legal regulated rent.

Bandil Farms Inc. v. DHCR: 2021 NY Slip Op 00002, NYLJ, 1/7/21, p. 18, col. 1 (App. Div. 1 Dept.; 1/5/21; Acosta, PJ, Gische, Oing, Gonzalez, Kennedy, JJ)