Tenant complained of rent overcharge, claiming that an “on-time discount” provision in his leases was improper. The DRA ruled for tenant and ordered landlord to refund $338. The DRA also reduced the legal rent to $1,425, finding that an on-time discount set forth in tenant’s leases established a preferential rent. Landlord appealed and lost. Landlord argued that the on-time discount wasn’t a preferential rent. But DHCR Fact Sheets #40 and #44, issued in 2015, prohibit on-time discount provisions in leases.
Tenant complained of rent overcharge, claiming that an “on-time discount” provision in his leases was improper. The DRA ruled for tenant and ordered landlord to refund $338. The DRA also reduced the legal rent to $1,425, finding that an on-time discount set forth in tenant’s leases established a preferential rent. Landlord appealed and lost. Landlord argued that the on-time discount wasn’t a preferential rent. But DHCR Fact Sheets #40 and #44, issued in 2015, prohibit on-time discount provisions in leases. When a lease includes such a provision, the lower on-time rent becomes the legal regulated rent. The DHCR Fact Sheets also limit late fees to 5 percent based on prior DHCR rulings. Here, landlord’s on-time provisions improperly called for late fees of more than 5 percent.
Zara Realty Holding Corp.: DHCR Adm. Rev. Docket No. EU110062RO (3/24/17) [3-pg. doc.]
