On-Time Rent Payment Discount Was Disallowed

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $2,662, with triple damages. Landlord appealed and lost. Tenant's lease that commenced on Sept. 1, 2011, provided that tenant's legal monthly rent was $2,124 but that if tenant paid rent on time, the monthly rent would be $1,189. The discount was only to be applied if tenant paid rent by the fifth day of the month. The DRA correctly ruled that the discount rent clause for on-time payment violated the Rent Stabilization Law and Code. Revised DHCR Fact Sheet #40 clarified DHCR policy concerning the allowance of no more than a 5 percent late fee for rent-stabilized apartments, and disallowance of an on-time discount. Courts also had ruled that an on-time discount provision was an improper late charge or penalty and illegal. So tenant's legal rent was $1,189.

166 Street LLC: DHCR Adm. Rev. Docket No. GP110041RO (7/2/19) [3-pg. doc.]