Triple Damages and Interest Properly Assessed Before Deducting Overcharge Refund

LVT Number: #33507

Rent-stabilized tenant complained to the DHCR of rent overcharge in September 2019. Landlord claimed that the overcharge was an inadvertent clerical oversight and wasn't willful. Landlord also issued a $4,087 refund with interest to tenant while the complaint was pending, but tenant refused to accept it. The DRA applied HSTPA amendments to the Rent Stabilization Law and ruled for tenant. The overcharge was based on a 2015 rent reduction order that remained in effect without reducing tenant's rent.

Rent-stabilized tenant complained to the DHCR of rent overcharge in September 2019. Landlord claimed that the overcharge was an inadvertent clerical oversight and wasn't willful. Landlord also issued a $4,087 refund with interest to tenant while the complaint was pending, but tenant refused to accept it. The DRA applied HSTPA amendments to the Rent Stabilization Law and ruled for tenant. The overcharge was based on a 2015 rent reduction order that remained in effect without reducing tenant's rent. After deducting the $4,087 already issued to tenant, the DRA directed landlord to refund $4,141.

Landlord appealed and lost, claiming that its refund should have been deducted from the total overcharge prior to assessing triple damages and interest. The DHCR pointed out that the agency had always calculated overcharges and related penalties first and then applied any refund. Since tenant actually paid the rent that was illegally charged at the time, tenant was entitled to the triple damages and interest penalties.

The DHCR also found that the prior DHCR PAR decision in the Matter of 45 North Ocean Avenue, LLC, which landlord relied on, had mistakenly applied pre-HSTPA law to a post-HSTPA case and wouldn't be followed in this. The DRA's decision here also didn't violate the Regina decision. Overcharges incurred two years prior to passage of HSTPA were assessed interest, and overcharges occurring from July 1, 2017, to the present were subject to triple damages as they would've been under pre-HSTPA law.

Manchester I LLC: DHCR Adm. Rev. Docket No. MQ710016RO (11/20/24)[3-pg. document]

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