Triple Damages Applied to Overcharge Based on Disallowed IAI Costs

Rent-stabilized tenant complained of rent overcharge. The DRA ruled for tenant and ordered landlord to refund $24,000, including triple damages and after deducting refunds already made. Landlord appealed, claiming that the overcharge wasn't willful and that a rent increase should have been granted for individual apartment improvements (IAIs). The DHCR ruled for landlord in part and revoked the triple damages. Tenant then filed an Article 78 court appeal. The case was sent back to the DHCR for reconsideration. The DHCR then restored the triple damages. DHCR inspection had shown that most of the claimed IAIs weren't installed. And landlord couldn't prove cash payments it claimed were made to its contractor. And while landlord had issued two refunds to tenant in response to tenant's complaint and a prior TPU audit, it failed to adjust the rent in compliance with TPU's directives, failed to submit an affidavit of compliance or to amend registrations, and failed to offer tenant leases at the lowered rent amount.

Kay Management: DHCR Adm. Rev. Docket No. HO210002RP (4/15/19) [3-pg. doc.]